Example 1—hypothetical value
On 26 July 2005 Eliza settled £600,000 on trust — half as a QIIP for her son Ian and half on discretionary trusts. On the same date she settled quoted shares worth £100,000 on trust for her daughter, Sheila, for life.
Because this is before 18 November 2015, the non-relevant property (the QIIP half) is included in the calculation.
The value of the hypothetical value transferred is £700,000.
Example 2—tax at half rates
Eliza made chargeable lifetime transfers (CLTs) before July 2005 totalling £85,000.
The notional charge is therefore:
| £ | £ |
| Hypothetical value transferred | | 700,000 |
| Deduct: nil rate band | 325,000 | |
| Less CLTs | 85,000 | (240,000) |
| Taxable amount | | 460,000 |
| Notional |
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Web page updated on 17 Mar 2025 15:15