Inheritance Tax Act 1984 section 1A

Death within seven years of potentially exempt transfer

Section 1A deals with how inheritance tax is calculated when a potentially exempt transfer becomes chargeable due to the transferor's death within seven years, and one or more reductions in tax rates have occurred between the date of the transfer and the date of death.

• A potentially exempt transfer becomes chargeable if the transferor dies within seven years of making it.
• If IHT rates have been reduced between the date of the transfer and the date of death, the reduced rates apply when calculating the tax due.
• Where more than one rate reduction has occurred, the most recent reduced rate table is used.
• Tax is only chargeable to the extent it would have been chargeable under the more favourable (reduced) rate table.