Part 2: Inheritance Tax Section 12: Exemption from ten-yearly charge for heritage property Background note
This section resolves an anomaly in IHTA 1984. In order to preserve and protect national heritage the government introduced the Conditional Exemption Tax Incentive Scheme. Buildings, land, works of art and other objects which qualify under the scheme are exempt from Inheritance Tax and Capital Gains Tax, provided that certain conditions are met. While relevant property is subject to a charge to tax under section 64 IHTA on each tenth anniversary of the date of creation of the settlement concerned, national heritage property may be exempted from this charge.
	The current IHT legislation requires trustees to make a claim and obtain a heritage property designation before the ten-yearly charge arises. This is a departure from the general regime for conditional exemption and can cause difficulties for trustees and parties engaged in designating heritage status. The change will put trustees dealing with a claim for exemption from a ten-yearly charge on the same footing as trustees and individuals subject to other IHT charges.
	This section is part of a package of measures that make changes to the relevant property trust legislation. The other sections are: 11 - Calculation of rate of inheritance tax on settled property, 13- Settlements with Initial interest in possession and 14 - Distributions etc from property settled by will.