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Inheritance Tax - Quick Succession Relief

June 2006

Consider the case of Alan who is left a property by his late uncle on the 1 January 2006, Alan finds a tenant and sets out to enjoy the fruits of his inheritance. Unfortunately he dies from a road accident on the 30 December 2006.

The inherited property will now be added to his estate and may possibly create a 40% IHT liability, depending on the value of his estate.

Is this fair? Less than one year has passed since the executors of his Uncle's estate paid inheritance tax on the same property.

Fortunately the Revenue are sympathetic. Alan's executors can claim Quick Succession relief. The relief is claimed as a partial reduction in any IHT due. In the year following the transfer from his Uncle, this relief will be significant - the benefit reduces on a sliding scale such that after 5 years from the original transfer no further benefit can be claimed.