Principal (10-year) charge

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

For a relevant property trust, a charge to inheritance tax will arise every ten years. This guidance note explains how to work out the amount of tax payable when the ten year anniversary fell on or after 18 November 2015 and the trust was created after 27 March 1974. Changes to elements of the calculation were introduced in F(No 2)A 2015 and for occasions of charge arising before 18 November 2015 the calculation is described in the Calculation of principal (10-year) charge before 18 November 2015 guidance note.

This guidance note sets out the calculation after 18 November 2015 and discusses each element in detail.

See the Relevant property guidance note for an explanation of what relevant property is and how the date of the anniversary is determined.

Changes from 18 November 2015

See the Calculation of principal (10-year) charge before 18 November 2015 guidance note for how the 10-year charge is calculated before 18 November 2015.

The key changes from the previous position are:

•
non relevant property is removed from all elements

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