Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Inheritance tax definition

What does Inheritance tax mean? Inheritance tax describes the taxation of wealth transfers on death and, in defined cases, on lifetime gifts and trust transfers. In the UK (England & Wales, Scotland and Northern Ireland), Inheritance Tax is a statutory regime under the Inheritance Tax Act 1984, charged at rates up to 40% on transfers of value. It is usually payable from the deceased’s estate by personal representatives. Lifetime charges arise on chargeable lifetime transfers (typically gifts into most trusts) and where a donor dies within seven years of a potentially exempt transfer. Key features include the nil-rate band and, where conditions are met,...

UK inheritance tax: historic family home schemes, countermeasures and case law (GWR/GROB, POAT, Ingram, Eversden, reversionary leases, home loan/double trust) and DOTAS

Published by a LexisNexis Private Client expert

Practice notes

Introduction

The principal legislation in the Inheritance tax ACT 1984 (IHTA 1984) and the earlier Capital transfer tax system left a gap. Nothing stopped a person aiming to limit inheritance tax (IHT) on death from making a lifetime transfer (hoping to live at least seven years thereafter) yet keeping the Use or enjoyment of what was given. As a result, under those rules, someone could, in effect, divest their home for IHT purposes while still living in it. Section 102 and Schedule 20 to the Finance Act 1986 (FA 1986) introduced the gift with reservation of benefit (GWR or GROB) rules to shut this loophole. When the GROB rules bite, the gifted asset (or, in some circumstances, a replacement) is generally treated as remaining within the donor’s estate for IHT while the donor continues to benefit. The rules can apply where, among other conditions, a person makes a gift of property on or after 18 March 1986 which is not then enjoyed to their entire, or virtually entire, exclusion. A GROB can be avoided if the donor pays a full market rent, in appropriate cases and on that basis, thereby satisfying the requirement for their entire exclusion from enjoyment of it...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Stephen Parnham

Stephen has over 30 years experience helping individuals, owner managed businesses and trustees improve their tax positions. As well as advising his own clients, he provides professional technical support to firms of Chartered Accountants and Solicitors from Hampshire in the south to the West Midlands and Shropshire in the north.He brings clarity and direction to complex tax issues. He is a Chartered Tax Adviser ( CTA ), a Trust and Estate Practitioner ( TEP ) and a member of the Association of Taxation Technicians ( ATT ). He is a member of the Society of Expert Witnesses and regularly contributes to the professional press....

Web page updated on 22/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...