IHTM14132 - Lifetime transfers: specific lifetime exemptions: order in which exemptions apply

Where several of the exemptions that apply solely to lifetime transfers (IHTM14131) are available, and where the transfers in that year exceed the annual exemption limit:

• apply IHTA84/S21, normal expenditure out of income (IHTM14231) exemption, first on a purely factual basis, without regard to any other exemption, limited or unlimited
• apply IHTA84/S19, the annual exemption (IHTM14141), last after all the other available exemptions have been applied to the transfer.

If the taxpayer asks you to adopt a different order of application of the exemptions, refer the case to your manager.