Inheritance Tax Act 1984 Schedule 1A paragraph 1

Application of this Schedule

Schedule 1A paragraph 1 establishes when the reduced rate of inheritance tax (36%) applies, which is triggered when a chargeable transfer arises on death and some or all of the value transferred is taxable at a rate above 0%.

• The Schedule applies where a chargeable transfer occurs on a person's death under section 4, and at least part of the transferred value is chargeable at a rate above nil per cent.
• The portion of the transferred value that is chargeable at a rate other than nil per cent is referred to throughout the Schedule as "TP".
• The reduced rate of 36% can apply to qualifying components of the estate where the charitable giving condition is met — meaning the donated amount is at least 10% of the baseline amount for one or more components.
• The estate is divided into three components for these purposes: the survivorship component, the settled property component, and the general component.