chargeable transfer

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A lifetime gift that is not covered by any of the exemptions and is therefore liable to inheritance tax. A potentially exempt transfer becomes a chargeable transfer where the death of the donor occurs within seven years of the transfer being made. A chargeable lifetime transfer is one that is neither an exempt transfer nor potentially exempt; in practice, this applies only to payment into a discretionary trust. Such a transfer is liable to inheritance tax at the lifetime rate of 20%, payable at the time of the transfer.

Subjects: Financial Institutions and Services — Accounting.

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