IHTM31440 - Assessing: calculations: lifetime events: chargeable PETs and additional charges
Once you have worked out the chargeable value of a failed PET (IHTM14512) or AdditionalCharge (IHTM14571),
- add the previous lifetime cumulative transfers (IHTM14502) (PLCT).
Then
- deduct the IHT nil-rate band, and multiply the remainder by the appropriate rate of tax (40% unless the transfer is before 18 March 1988 (IHTM30171)).
Apportion and deduct any tax attributable to previous lifetime transfers, leaving the tax due on the transfer itself.
Taper relief
Deduct any taper relief (IHTM14611) due. COMPASS (IHTM31101) will calculate this automatically, but you must amend a manual calculation template (IHTM31301) yourself.
Adjusting additional charges
If you are calculating additional charges on an immediately chargeable transfer, deduct the tax paid (IHTM14576) on the transfer at the time it was made. Show this as a ‘relief against tax’ in the appropriate box on your COMPASS (IHTM31189) or manual template calculation.
Next action
You will now have the total tax charge for this lifetime transfer. You can follow the death estate instructions for the further aspects to consider.