Section 8G — Inheritance Tax Act 1984: Meaning of “brought-forward allowance”

Meaning of “brought-forward allowance” 8G 1 This section is about the amount of the brought-forward allowance (see section 8D(5)(f)) for a person (“P”) who dies on or after 6 April 2017.

2 In this section “ related person ” means a person other than P where—

a the other person dies before P, and b immediately before the other person dies, P is the other person's spouse or civil partner.

3 P's brought-forward allowance is calculated as follows—

a identify each amount available for carry-forward from the death of a related person (see sections 8E , 8F and 8FD , and subsections (4) and (5)),

b express each such amount as a percentage of the residential enhancement at the death of the related person concerned, c calculate the percentage that is the total of those percentages, and d the amount that is that total percentage of the residential enhancement at P's death is P's brought-forward allowance or, if that total percentage is greater than 100%, P's brought-forward allowance is the amount of the residential enhancement at P's death, but P's brought-forward allowance is nil if no claim for it is made under section 8L.

4 Where the death of a related person occurs before 6 April 2017—

a an amount equal to £100,000 is treated for the purposes of subsection (3) as being the amount available for carry-forward from the related person's death, but this is subject to subsection (5),

and b the residential enhancement at the related person's death is treated for those purposes as being £100,000.

5 If the value (“RPE”) of the related person's estate immediately before the related person's death is greater than £2,000,000, the amount treated under subsection (4)(a) as available for carry-forward is reduced (but not below nil) by— R P E − £2,000,000 2