Inheritance Tax Act 1984 section 3

Transfers of value

Section 3 defines what constitutes a "transfer of value" for inheritance tax purposes and explains how the amount transferred is calculated, including situations where a person's failure to act can be treated as a transfer.

• A transfer of value occurs when a person makes a disposition that reduces the value of their estate, and the reduction in value is the amount transferred
• Excluded property that leaves a person's estate as a result of a disposition is ignored when calculating the reduction in value
• A deliberate failure to exercise a right can be treated as a transfer of value if it diminishes the person's estate while increasing another person's estate or the value of settled property
• References in the Act to transfers of value also cover other chargeable events that are treated as if a transfer of value had been made