Inheritance Tax Act 1984 Schedule 1A paragraph 6

Rules for determining whether charitable giving condition is met

Schedule 1A paragraph 6 sets out the rules for calculating the donated amount and the baseline amount when determining whether the charitable giving condition is met for the reduced 36% rate of inheritance tax.

• When attributing values to specific gifts, calculations must assume the lower 36% rate of tax applies.
• Business property relief and agricultural property relief reductions do not apply to charitable gifts when calculating the donated amount, but they do apply when calculating the baseline amount.
• Apart from these specific adjustments, all other provisions of the Inheritance Tax Act apply to calculating both the donated and baseline amounts in the same way as they apply to calculating the tax on the chargeable transfer.
• These rules ensure a consistent and fair basis for testing whether the 10% charitable giving threshold has been met to qualify for the reduced rate.