IHTM26103 - Step 3 - interaction: summary of the interaction provisions

In outline, the interaction provisions of IHTA84/S39A state the value of any specific gifts (IHTM26011) of relievable property is their value after relief (IHTA84/S39A (2)), while the value of any other specific gifts is the ‘appropriate fraction’ (IHTM26108) of their value (IHTA84/S39A (3)). 

Under IHTA84/S39A (4) the appropriate fraction is: 

• The value transferred after business or agricultural relief less any specific gifts of relievable property at their reduced value 

divided by 

• the unreduced value transferred less any specific gifts of relievable property at their value before reduction 

Where grossing up (IHTM26003) is necessary, IHTA84/S39A(5) provides that the values to be grossed up are the values as reduced under IHTA84/S39A (2) to (4). 

A specific gift of relievable property does not include the value of any other gift payable out of that property and that other gift is not treated as a gift of relievable property (IHTA84/S39A (6)).