Inheritance Tax Act 1984 section 74B

Section 74A: supplementary provision

Section 74B provides supplementary rules for transfers of value arising under section 74A (which deals with arrangements involving the acquisition of interests in settled property), including how such transfers are taxed, how their value is calculated, and when they may be reduced or disapplied.

• A transfer of value arising under section 74A is always an immediately chargeable transfer — it cannot be a potentially exempt transfer, and the usual exemptions for arm's length transactions and the gifts with reservation rules do not apply.
• When calculating the value transferred under section 74A, any related transfers of value that occurred before or at the same time (other than those also arising under section 74A) reduce the section 74A charge, preventing double taxation — but each related transfer can only be used once as a reduction.
• The associated operations rule in section 268(3), which can extend the scope of IHT by linking related transactions, does not apply to transfers arising under section 74A.
• If the individual acquires an interest in possession in the settled property as part of the arrangements, and that interest forms part of the individual's estate for IHT purposes under section 5(1B), the section 74A transfer is treated as if it had never occurred.