IHTM42111 - Proportionate charges: chargeable transfer

The property comprising the chargeable transfer (value now chargeable) is the value of the ‘loss to the settlement’. That is the amount by which the value of the relevant property in the settlement is less immediately after the event than it was before. (IHTM42119)

The chargeable transfer is calculated after deducting any business or agricultural relief, if available. 

If the tax is to be paid out of the remaining settlement funds, the value must be grossed-up. (IHTM42118)

The rate to apply to the transfer depends on whether the transfer is before or after the first ten year anniversary (TYA).   

Once you have found the initial rate, the calculation is then reduced by a number of fortieths, to take into account the length of time in quarter years that the property has been in the trust since set-up or the last TYA.