Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Transfer of value definition

What does Transfer of value mean? In practice, a transfer of value is any act or omission by which a person reduces the value of their estate for inheritance tax (IHT) purposes, for example by making a gift, settling assets on trust, releasing or waiving rights, forgiving a debt, or entering a transaction at an undervalue. The term is defined in legislation as a disposition that makes the value of the transferor’s estate immediately after the disposition less than it would have been but for the disposition (Inheritance Tax Act 1984, s 3). Key features include the “loss to the estate” test (measured by...

UK IHT estate valuation: identifying assets and liabilities, open market valuation across asset classes, joint/related property and key reliefs, with forthcoming reforms to pensions and APR/BPR

Published by a LexisNexis Private Client expert

Practice notes

FORTHCOMING CHANGE relating to IHT on pension death benefits :

In the Autumn Budget 2024 on 30 October 2024, the government confirmed that, from 6 April 2027, unused pension pots and pension death benefits will be treated as part of a person’s estate for Inheritance tax (IHT) purposes. New section 150A of the Inheritance Tax Act 1984 will be introduced by section 66 of the Finance Act 2026, taking effect on 6 April 2027 (IHTA 1984, s 71). The measure will cover both defined contribution and defined benefit arrangements, and will extend to UK registered schemes as well as qualifying non-UK pension schemes. For further details, see News Analyses: Autumn Budget 2024—Private Client analysis — Inheritance tax and HMRC confirms new IHT rules on unused pension funds to apply from 6 April 2027.

The need to value the estate

On death, an individual is deemed to make a ‘Transfer of value’ equal to the worth of their estate immediately before death. This transfer is subject to IHT. Consequently, the estate may face an IHT charge depending on its overall value and the application of any available exemptions and/or reliefs...

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Ailsa Moorhouse

Penningtons Manches Cooper

Ailsa joined Penningtons from Dawsons LLP in 2011, having qualified as a solicitor in 2009. She works on a variety of private client matters including wills, trusts, probates and the administration of estates....

Web page updated on 22/05/2026

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