An individual, personal representatives, or trustees can pay inheritance tax (IHT) liabilities under the Acceptance in Lieu (AIL) scheme by deciding to offer an object, land, or building to the nation. The offer must match a specific criteria to be considered.
In a Q&A session for the Financial Times, partner Judith Millar and consultant Susan Johnson discuss what happens once an AIL offer is valued and accepted.
If accepted, HM Revenue & Customs apply an incentive, so IHT due on the object, building or land is calculated and then a further 25 per cent of tax due is deducted so in many cases this will create a tax credit of 70 per cent of the agreed value. HMRC do not give change, so if the tax credit exceeds the IHT the recipient body may pay the excess. In all cases the ownership and use of the object land or building is lost.
Judith Millar and Susan Johnson
Partner and Consultant
Financial Times subscribers can read the full Q&A session on their website.
