Chargeable lifetime transfer (UK inheritance tax)
An immediately chargeable lifetime transfer is a transfer of value made during a person’s lifetime that is chargeable rather than a potentially exempt transfer or an exempt transfer. The amount of immediate tax depends on exemptions, prior chargeable transfers, the available nil rate band and who pays the tax. Death within seven years can produce further tax on the transfer, subject to applicable reliefs and credit for lifetime tax. A chargeable transfer can have no immediate tax payable where sufficient nil rate band is available.
Worked example
An individual makes a non-exempt lifetime transfer that the question states is immediately chargeable. The adviser checks earlier chargeable transfers and the available nil rate band to determine whether lifetime tax is payable, then considers any additional tax if the individual dies within seven years.
Common mistake
Assuming every chargeable lifetime transfer generates immediate tax, or treating it as an outright potentially exempt gift.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |