Inheritance Tax Act 1984 section 62B

Same day additions: exceptions

Section 62B sets out the circumstances in which a same-day addition (as defined in section 62A) will not apply, providing exceptions for charitable settlements, protected settlements, life insurance premium payments, and small additions of £5,000 or less made during the settlor's lifetime.

• No same-day addition arises where all the property in either settlement A or settlement B is held for charitable purposes only without limit of time, immediately after the relevant transfer of value.
• No same-day addition arises where either or both of settlement A and settlement B qualify as a protected settlement (as defined in section 62C), or where the transfer of value relates to regular life insurance premium payments due at intervals of one year or less.
• Where the transfer of value is made during the settlor's lifetime (rather than on death), a same-day addition only arises if the increase in value of the property in each of settlement A and settlement B exceeds £5,000.
• An anti-fragmentation rule applies: where multiple transfers are made to the same settlement on the same day, the £5,000 threshold is tested by comparing the value of the settlement property immediately before the first transfer with its value immediately after the last transfer on that day.