Quick Succession Relief

Trusts Discussion
1

I am dealing with an estate and I am trying to ascertain if QSR is available.

The background is that the deceased’s wife died in October 2013.

Her estate passed to the deceased absolutely and, hence, was covered by spouse exemption.

She had made some substantial PETS (£580,000) which became chargeable, by virtue of her death.

This resulted in IHT being due on the failed PETs.

As her free estate is exempt for IHT, can I still claim QSR on her husband’s estate?

Any guidance would be greatly appreciated.

Martyn Dixon
Harold Bell Infields & Co

2

My understanding is that the deceased beneficiary’s estate must have been increased by the chargeable transfer in question for QSR to apply.

Normally, the IHT on a failed PET is payable by the recipient of that gift, unless provided otherwise either at the time of the gift or specified in the will (in which case it is a general legacy to the recipient).

As the surviving spouse, the benefit they received was not a chargeable transfer and, even if their entitlement was reduced by IHT on the failed PETs being paid out of the estate, it would be the estates of the recipients of the failed PETs that would be entitled to the benefit of QSR.

So, simple answer is, I believe, “No”.

Paul Saunders

3

Thank you for your comments. HMRC have reverted to me on this today and they inform me that QSR is available on the failed PET under s.141 of the IHTA 1984.

I have not yet looked at this, but will let you know the outcome of my investigation.

Martyn Dixon