IHTM25537 - AR/BR 100% relief allowance: transfer of unused allowance - how the amount to鈥痓e transferred鈥痠s calculated
The transferred allowance鈥痠s鈥痚xpressed鈥痑s a percentage of the deceased鈥檚 unused relief allowance.鈥��
The first step is to calculate the鈥痷nused鈥�100% relief allowance on the death of the first spouse or civil partner.鈥�疶his is the difference between the total 100% relieved amount and the final allowance amount at the date of death.鈥��
The total 100% relieved amount鈥�is the amount by which the chargeable transfers made by the deceased鈥痑re reduced鈥痓y 100% business property or agricultural property relief. This applies to all chargeable transfers made by the deceased in the seven-year period ending on the date of death.鈥��
The final allowance amount鈥�is the amount of the 100% relief allowance in effect at the date of death.鈥��
If the deceased used 拢800,000 of their鈥�100% relief allowance鈥痑nd at the date of their death the final allowance amount was 拢2.5 million, the unused鈥�portion鈥痠蝉:鈥赌�
拢2.5 million -鈥�800,000 = 拢1.7 million鈥�
This unused鈥�portion鈥痮f the 100% relief allowance must then鈥痓e converted鈥痶o鈥痑鈥痯ercentage.鈥��
Percentage = (unused鈥�portion鈥封�痬aximum allowance) 脳 100鈥��
拢1.7 million鈥� 拢2,500,000) 脳 100 =鈥�68%鈥��
This percentage鈥痠s then applied to the鈥痵urvivor鈥檚鈥�100% relief鈥痑llowance as at the date of their death鈥痶o calculate the survivor鈥檚鈥�additional鈥痑濒濒辞飞补苍肠别.鈥赌�
厂耻谤惫颈惫辞谤鈥檚鈥�additional鈥痑llowance = 68% 脳 拢2,500,000鈥�= 拢1.7million鈥��
Total allowance available鈥��
Survivor鈥檚 own allowance (拢2.5 million) + transferred allowance (拢1.7 million) = 拢4,200,000 total 100% agricultural or business relief allowance鈥��