Inheritance Tax Act 1984 section 3

Transfers of value

Section 3 defines what constitutes a "transfer of value" for inheritance tax purposes, including how the transferred amount is calculated, the treatment of excluded property, and when a failure to act can itself be treated as a transfer.

• A transfer of value occurs when a person makes a disposition that reduces the value of their estate — the amount by which the estate's value falls is the value transferred and potentially subject to inheritance tax.
• Excluded property that leaves a person's estate as a result of a disposition is ignored when measuring the reduction in value.
• If a person deliberately fails to exercise a right, and that omission diminishes their own estate while increasing another person's estate or the value of settled property, the omission is treated as a disposition made at the last point the right could have been exercised.
• References in the Act to a "transfer of value" extend to any event on which tax is chargeable as though a transfer of value had been made, and the term "transferor" is read accordingly.