Paragraph 4 100% relief allowance

United Kingdom

“Chapter 2A
100% Relief allowance and 100% trust relief allowance
100% relief allowance
124D
(1)
This section applies for the purpose of determining the amount of the 100% relief allowance available in relation to a chargeable transfer that is not an occasion on which tax is chargeable under Chapter 3 of Part 3 for the purposes of—
(a)
section 104(1A) (business property relief), and
(b)
section 116(1A) (agricultural property relief).
(2)
The 100% relief allowance available in relation to a chargeable transfer (“the relevant transfer”) is equal to—
(a)
£2.5 million, less
(b)
the total amount by which the values transferred by chargeable transfers made by the transferor in the allowance period were treated as reduced as a result of section 104(1A) or 116(1A).
(3)
The allowance period means the period—
(a)
beginning with the commencement of the period of seven years ending with the day on which the relevant transfer was made, and
(b)
ending—
(i)
where the relevant transfer is the transfer made under section 4, immediately before that transfer is deemed to have occurred, or
(ii)
otherwise, with the day before the relevant transfer was made.
(4)
But where—
(a)
more than one conditionally relievable transfer in relation to the transferor occurs on the same day, and
(b)
the sum of the potentially relievable values of those transfers exceeds the amount of the 100% relief allowance that would have been available in relation to a transfer made on that same day, if no other transfer had occurred on that day,
the 100% relief allowance available in relation to those transfers is to be determined under subsection (5) (instead of under subsection (2)).
(5)
The 100% relief allowance available in relation to each of those transfers is the amount given by multiplying—
(a)
the amount given by dividing the potentially relievable value of that transfer by the sum of the potentially relievable values of all of those transfers, by
(b)
the amount of the 100% relief allowance that would have been available in relation to a transfer made on that same day, if no other transfer had occurred on that day.
(6)
Subsection (7) applies where—
(a)
the relevant transfer is the transfer made under section 4 (so far as it is a chargeable transfer), and
(b)
the potentially relievable value of that transfer exceeds the amount of the 100% relief allowance available in relation to it.
(7)
The 100% relief allowance available in relation to the relevant transfer is to be attributed between the properties transferred in proportion to the amount of the value of each property as is attributable to—
(a)
the value of relevant business property that falls within section 105(1)(a), (b) or (bb),
(b)
the agricultural value of agricultural property in relation to which the transferor’s interest condition in section 116(2) is met, or
(c)
so much of the agricultural value of agricultural property in relation to which the transferor’s interest condition in section 116(2) is treated as met as a result of section 116(4) as does not exceed the amount which would have attracted relief under Schedule 8 to the Finance Act 1975.
(8)
Subsection (9) applies where section 131(2) (relief where value of transferred property subsequently decreases) applies in relation to a chargeable transfer—
(a)
made by the transferor in the allowance period, and
(b)
the value of which is treated as reduced as a result of section 104(1A) or 116(1A).
(9)
Subsection (2)(b) applies as if the amount by which that value is treated as reduced under section 104(1A) or 116(1A) is the amount by which it would have been treated as reduced if section 131(2) did not apply.
(10)
For the purposes of this section—
(a)
a chargeable transfer is a “conditionally relievable transfer” in relation to a transferor if—
(i)
it was made by the transferor,
(ii)
it is not the transfer made under section 4, and
(iii)
section 104(1A) or 116(1A) would apply to reduce the value transferred if there were an amount of the 100% relief allowance available in relation to it, and
(b)
the potentially relievable value of a chargeable transfer is so much of the value transferred as would be treated as reduced as a result of section 104(1A) or 116(1A) if the 100% relief allowance available in relation to it were unlimited.
Transfer of unused 100% relief allowance
124E
(1)
This section applies where—
(a)
immediately before the death of a person (a “deceased person”), the deceased person had a spouse or civil partner (“the survivor”), and
(b)
an amount of the 100% relief allowance of the deceased person is unused on death.
(2)
A person has an amount of unused 100% relief allowance on death if the total 100% relieved amount is less than the deceased person’s final allowance amount.
(3)
Accordingly, the “unused 100% relief allowance” in relation to the person is the difference between those amounts.
(4)
In this section—
(a)
the “total 100% relieved amount” is the total amount by which values transferred by chargeable transfers made by the deceased person in the period of seven years ending with the day on which the deceased person died were treated as reduced as a result of section 104(1A) or 116(1A), and
(b)
the “final allowance amount” in relation to a person means the amount specified in section 124D (2)(a) that has effect on the day on which the person dies.
(5)
Where a claim is made under this section, the survivor’s final allowance amount, for the purposes of the charge to tax on the death of the survivor, is increased by the lesser of the amount of the survivor’s final allowance amount and—
(a)
the amount given by multiplying the survivor’s final allowance amount by the unused percentage of the deceased person, or
(b)
where the survivor is the survivor in relation to more than one deceased person, the amount given by multiplying the survivor’s final allowance amount by the sum of the unused percentages of those deceased persons.
(6)
The unused percentage of the deceased person means the percentage given by dividing—
(a)
the unused 100% relief allowance in relation to the deceased person, by
(b)
the deceased person’s final allowance amount.
Claims under section 124E
124F
(1)
A claim under section 124E may be made—
(a)
by the personal representatives of the survivor within the permitted period, or
(b)
(if no claim is so made) by any other person liable to the tax chargeable on the survivor's death within such later period as an officer of Revenue and Customs may in the particular case allow.
(2)
If no claim under section 124E above has been made in relation to a person (P) by reference to whose death that section applies in relation to the survivor, the claim under that section in relation to the survivor may include a claim under that section in relation to P if that does not affect the tax chargeable on the value transferred by the chargeable transfer of value made on P's death.
(3)
In subsection (1)(a) “the permitted period” means—
(a)
the period of four years from the end of the month in which the survivor dies or (if it ends later) the period of six months beginning with the date on which the personal representatives first act as such, or
(b)
such longer period as an officer of Revenue and Customs may in the particular case allow.
(4)
A claim made within either of the periods mentioned in subsection (3)(a) may be withdrawn no later than one month after the end of the period concerned.”