Inheritance Tax Act 1984 section 265

Chargeable transfers affecting more than one property

Section 265 deals with how inheritance tax is allocated across multiple properties when a single chargeable transfer involves more than one property.

• Where a chargeable transfer is determined by reference to the values of more than one property, the tax must be split proportionally across those properties.
• The proportion of tax attributed to each property is based on the ratio of that property's value to the aggregate value of all the properties involved.
• This proportional allocation is subject to the rules in section 54B(3), which deal with special rate property within settled property arrangements.
• Any other provision that reduces the amount of tax attributable to a particular property will also override the standard proportional allocation.