Inheritance Tax Act 1984 section 268

Associated operations

Section 268 defines the concept of "associated operations" and sets out how transfers of value made through a series of linked operations are treated for inheritance tax purposes.

• Two or more operations are "associated" if they affect the same property, or if one is carried out with reference to, or to facilitate, another — regardless of whether they are performed by the same person or at the same time.
• A lease granted at full market value cannot be treated as associated with any operation taking place more than three years after the grant, and no operation on or after 27 March 1974 can be associated with one before that date.
• Where associated operations occur at different times, the transfer of value is treated as made at the date of the last operation, and the value transferred is measured at that point.
• If any earlier operation within the series itself constitutes a transfer of value by the same transferor, its value is deducted from the overall total — except where that earlier transfer (but not the combined transfer) qualifies for spouse or civil partner exemption.