IHT - Exemptions/Reliefs - Death only

Question 1

What is the purpose of woodlands relief ?

Answer 1

It defers the IHT on the value of timber (not land) in woodland included in the deceased’s estate until the timber is sold or gifted.

Question 2

What is the minimum ownership period required for woodlands relief to apply?

Answer 2

• If the woodland was purchased by the deceased: 5 years prior to death.
• If it was inherited: no minimum period.

Question 3

What value does woodlands relief apply to?

Answer 3

Only to the value of the timber, not the land.

Question 4

Is woodlands relief a reduction or a deferral of IHT?

Answer 4

It is a deferral—IHT is postponed until the timber is sold or given away.

Question 5

When might other reliefs be preferred over woodlands relief?

Answer 5

If the woodland qualifies for either:

• Business Property Relief (BPR) (e.g. used for commercial purposes), or
• Agricultural Property Relief (APR) (e.g. part of agricultural land), these are usually more generous and should be claimed instead.

Question 6

What is the purpose of Quick Succession Relief (QSR)?

Answer 6

To reduce the IHT payable on assets that have already been subject to IHT within the previous 5 years.

Question 7

What are the three conditions for QSR to apply?

Answer 7

1. The deceased’s estate includes assets they received as a gift or inheritance
2. The assets were transferred to them within 5 years before their death
3. The original transfer was subject to IHT

Question 8

Can QSR be claimed if no IHT was paid on the original transfer?

Answer 8

No—IHT must have been payable on both the earlier transfer and the deceased’s estate.

Question 9

What percentage of the earlier IHT can be offset under QSR if the second death occurs within 1 year?

Answer 9

100% of the IHT paid on the original transfer.

Question 10

What percentage applies if the second death occurs 4-5 years after the original IHT charge?

Answer 10

20% of the earlier IHT paid.