Inheritance Tax Act 1984 Schedule 1A paragraph 8

Opting out

Paragraph 8 allows the relevant parties to elect to opt out of the reduced inheritance tax rate for a particular component of the estate, even where the charitable giving threshold has been met.

• An election can be made to opt out of the reduced 36% inheritance tax rate for any component of the estate.
• Where an election is made, the schedule treats the charitable donations for that component as falling below the 10% threshold, regardless of the actual amount donated.
• The effect is that the standard 40% inheritance tax rate applies to that component instead of the reduced 36% rate.
• All appropriate persons (those with the authority to deal with that component, such as personal representatives or trustees) must jointly make the election — it cannot be made by only some of them.