ACCA ATX ^UK Syllabus A3. Inheritance Tax - Quick succession relief - Notes ^{5 / 7}

This is a relief that is only available on the death estate.

Quick succession relief applies where an individual dies and within the previous 5 years

• - they had inherited an asset on someone else’s death and IHT was charged on the inheritance. 

  For example, two members of a family dying within 5 years of each other, and one having given a gift to the other

• - they received a lifetime gift and IHT was charged on the gift

How to calculate Quick Succession Relief?

IHT paid on first death * appropriate %

Appropriate Percentages

IHT paid on the first death

This is normally given in the question, but if it is not, it can be calculated as follows:

Total IHT paid on first death estate/Gross chargeable estate value of first death * Value of the asset gifted out of the first estate

Note

QSR is given before DTR, but after the deduction of taper relief and life tax, and it is not necessary for the second person to still own the asset on death. 

It is deducted after the IHT liability has been calculated.

Illustration

Denny died on 31/07/2024 leaving an estate of £340,000. 

He had made no lifetime gifts. 

In June 2020, Denny had been left £28,000 from his brother’s estate. 

Inheritance of £75,000 was paid on a total chargeable estate of £450,000 because of his
brother’s death. 

How much IHT will be due as a result of Denny’s death?

Solution

Chargeable estate £340,000
Nil band         £(325,000)
Taxable estate £15,000
IHT at 40% £6,000

Less QSR: June  2020 to July 2024 4-5 years
(£75,000/£450,000) * £28,000 * 20% = £(933)
IHT due on Denny’s death £5,067