Inheritance Tax Act 1984 section 69

Rate between ten-year anniversaries

Section 69 explains how to calculate the inheritance tax rate on relevant property leaving a discretionary trust (or otherwise becoming chargeable) between ten-year anniversaries, including adjustments required when property has been added to or has changed status within the settlement since the last ten-year anniversary.

• The exit charge rate is a proportion of the effective rate that applied (or would have applied) at the most recent ten-year anniversary, scaled by the number of complete quarters since that anniversary expressed as fortieths.
• If no property has been added to, or changed status within, the settlement since the last ten-year anniversary, the rate from that anniversary is simply used as the basis for the proportionate calculation.
• If property has been added as relevant property, or existing property has become relevant property, since the last ten-year anniversary, the ten-year anniversary rate must be recalculated as though that property (at its value when it entered or became relevant property) had been part of the settlement immediately before the anniversary.
• The appropriate fraction used to reduce the rate is the number of complete successive quarters from the most recent ten-year anniversary to the day before the exit charge, divided by forty.