Calculation of exit charge before 18 November 2015

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note describes the method of calculating an exit charge when the occasion of charge (that is the date of the beneficiary’s entitlement) was before 18 November 2015. The calculation of the exit charge on occasions of charge after that date is provided in the Exit charge guidance note, which also illustrates the most recent amendments. This guidance note provides:

•
a summary of the changes
•
a description of the old style calculation

The exit charge

When trust property ceases to be relevant property, it becomes subject to a charge to inheritance tax. This charge is known as either:

•
the exit charge
•
the proportionate charge

IHTA 1984, s 65

See the Relevant property guidance note for an explanation of what relevant property is.

The comments on obtaining valuations in the Principal (10-year) charge guidance note apply equally here.

Summary of the changes

In summary, the changes to the exit charge calculation relate to the notional transfer, which is explained below. All other

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