Inheritance Tax Act 1984 section 113A

Transfers within seven years before death of transferor

Section 113A sets out the additional conditions that must be met for business property relief to be retained on lifetime transfers made within seven years of the transferor's death.

• Where a potentially exempt transfer becomes chargeable on the transferor's death within seven years, any business property relief that would have applied is withdrawn unless the transferee still owns the original business property and it still qualifies as relevant business property immediately before the death.
• Where a lifetime transfer was immediately chargeable and the transferor dies within seven years, the additional inheritance tax triggered by the death is calculated without business property relief unless the same two conditions are satisfied.
• Special rules apply to quoted and unquoted shares: quoted shares at the time of the original transfer, and certain unquoted controlling or majority holdings that remained unquoted throughout the relevant period, are subject to modified tests under the section.
• If the transferee dies before the transferor, the conditions are tested by reference to the transferee's date of death rather than the transferor's, and where only part of the original property meets the conditions, relief is restricted proportionately.

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