Inheritance Tax Act 1984 section 127

Amount subject to charge

Section 127 determines how to calculate the amount on which inheritance tax is charged when trees or underwood are disposed of following a death where woodlands relief was claimed.

• Where the disposal is a sale for full consideration, the taxable amount is the net proceeds of that sale.
• For any other type of disposal, the taxable amount is the net value of the trees or underwood at the time of the disposal.
• A 50% reduction in the taxable amount applies where the woodland value would have qualified as relevant business property for business relief purposes had it not been excluded from the death estate.
• The 50% reduction also applies where the death occurred before the current Act was in force, provided the woodland would have qualified for business relief had the Act been in force at the time.