IHTM14712 - GWRs: calculations

Make two separate calculations of the total tax payable as a result of the death

Firstly

• charging the GWR as part of the death estate (or as a deemed PET on the date the reservation came to an end if it was before the death)
• but ignoring the value transferred by the original lifetime transfer

and secondly

• charging the lifetime transfer in the usual way as a failed PET or immediately chargeable transfer,
• but ignoring the value of that property at the date of death or cessation of reservation.

Retain the charge on the calculation which produces the higher amount of inheritance tax payable.

The credit for any tax previously paid on the lifetime transfer is limited to the amount of tax payable on the death in respect of the GWR property. (see example 2 ( IHTM14713))

Chose the appropriate calculation before taking into account these credit provisions, even if they operate to turn what was the higher amount of tax into the lower amount.