Inheritance Tax Act 1984 section 270

Connected persons

Section 270 defines who counts as a "connected person" for inheritance tax purposes, by reference to the capital gains tax rules but with an extended definition of relatives.

• The definition of connected persons for inheritance tax follows the capital gains tax rules in section 286 of the Taxation of Chargeable Gains Act 1992.
• However, for inheritance tax the definition of "relative" is wider and includes uncles, aunts, nephews and nieces, in addition to the relatives already covered by the capital gains tax rules.
• The terms "settlement", "settlor" and "trustee" take their inheritance tax meanings rather than any capital gains tax meanings when applying the connected persons test.
• Being connected with another person can affect the inheritance tax treatment of transactions between those persons, for example by preventing certain reliefs or by altering the way a transfer of value is assessed.