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Chargeable lifetime transfers

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Chargeable lifetime transfers

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
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This guidance note explains how to calculate the amount of tax that arises in lifetime on a chargeable transfer (a ‘chargeable lifetime transfer’ or CLT). In general terms the lifetime charge will apply to individuals who gift property into a trust that is subject to the relevant property regime or to a company. See the An introduction to inheritance tax (IHT) and Occasions of charge guidance notes. Outright gifts to individuals and transfers into a disabled person’s trust are potentially exempt transfers (PET) and will not incur a lifetime charge. See the Potentially exempt transfers guidance note. A chargeable transfer is a transfer made by a person and so a company can made a chargeable transfer. How this is attributed to participators in a close companies can be found in the Close companies guidance note.

The calculation of additional tax that arises on death is considered separately in IHT charge on death guidance note.

Principles of calculation

The rates of IHT

The rates of IHT are different for lifetime transfers and transfers made on death.

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  • 24 Feb 2025 10:20

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