Inheritance Tax Act 1984 section 129

Credit for tax charged

Section 129 deals with avoiding double taxation when a disposal of trees or underwood triggers both the deferred woodland tax charge and a separate chargeable transfer.

• Where a disposal of trees or underwood is both subject to the deferred woodland tax charge under section 126 and is also a chargeable transfer, a credit mechanism applies to prevent double counting.
• The value transferred by the chargeable transfer is reduced by the amount of tax already chargeable under the section 126 woodland provisions.
• In effect, the inheritance tax due on the chargeable transfer is calculated on the net value of the trees or underwood after deducting the section 126 tax liability.
• This ensures that the same value is not taxed twice — once under the deferred woodland charge and again as part of the chargeable transfer.