Inheritance Tax Act 1984 Schedule 2 paragraph 2

Death within seven years of chargeable transfer

Schedule 2 paragraph 2 deals with how additional inheritance tax on death is calculated when tax rate reductions have occurred between the date of a chargeable transfer and the date of death within seven years.

• Applies to chargeable transfers (not potentially exempt transfers) made before a statutory reduction in IHT rates
• The transferor must die within seven years of the transfer but after the rate reduction has taken effect
• Additional tax on death is only charged to the extent it would be due using the reduced rate table, not the original higher rates
• Where multiple rate reductions have occurred between the transfer and death, the most recent reduced rate table is used