Inheritance Tax Act 1984 section 34

Reinstatement of transferor's cumulative total

Section 34 deals with how a chargeable event on conditionally exempt heritage property affects the cumulative total of the person who originally made the conditionally exempt transfer, and how this in turn affects the tax rates on their subsequent transfers.

• When a chargeable event occurs on conditionally exempt heritage property, the tax charge is treated as if it were a chargeable transfer made by the original transferor, thereby reinstating their cumulative total for inheritance tax rate purposes.
• If the original transferor has already died and is the relevant person for a subsequent chargeable event, the value transferred on their death is increased by the amount on which tax became chargeable at the time of the earlier chargeable event.
• Where the property is or has been held in a settlement created within thirty years before the chargeable event, any settlor who made a conditionally exempt transfer of the property within that thirty-year period may be treated as the original transferor for these purposes.
• Conditionally exempt transfers made before any previous chargeable event in respect of the same property are disregarded when identifying the relevant settlor under the settlement rule.