Inheritance Tax Act 1984 section 126

Charge to tax on disposal of trees or underwood

Section 126 sets out when inheritance tax becomes chargeable on the disposal of trees or underwood whose value was previously excluded from the estate on death under the woodlands relief.

• Where woodlands relief was claimed under section 125, and the trees or underwood are later disposed of, inheritance tax is triggered on that disposal, calculated under sections 127 and 128.
• The charge applies only if the disposal takes place before the woodland has formed part of the value transferred on a subsequent death.
• A disposal to a spouse or civil partner does not trigger the charge.
• Once tax has been charged on a disposal of particular trees or underwood in relation to a death, no further charge arises on any later disposal of the same trees or underwood in relation to that same death.