Inheritance Tax Act 1984 Schedule 4 paragraphs 11–15

Rates of charge

Schedule 4 paragraphs 11 to 15 set out how the rate of inheritance tax is calculated when property leaves a heritage maintenance fund and a charge arises under paragraph 8.

• Where the property was previously relevant property in a discretionary trust before entering the maintenance fund, tax is charged at a sliding scale based on the number of complete quarters in the relevant period (paragraph 11).
• In all other cases, tax is charged at the higher of two rates: a similar quarter-based sliding scale (the "first rate") or an effective rate derived from the settlor's cumulative chargeable transfers or death estate (the "second rate") (paragraphs 12–14).
• Where the same settlor has triggered another paragraph 8 charge in the previous seven years at the second rate, the amounts on which tax was charged on those earlier occasions are brought into the calculation to increase the rate for the current charge.
• Property treated as being within a maintenance fund direction by virtue of paragraph 1(3) is deemed to have entered the fund at the date of the original transfer of value.