Part 2: Inheritance Tax Section 11 and Schedule 1: Calculation of rate of inheritance tax on settled property. Details of the section and schedule Schedule 1
Paragraph 1 provides for the Inheritance Tax Act (IHTA) 1984 to be amended in accordance with Schedule 1.
	Paragraph 2 inserts new sections 62A, 62B and 62C into IHTA 1984. They define "same-day addition", "same day additions: exceptions" and "protected settlements" for the purposes of Chapter 3 of Part 3 to IHTA 1984.
	Subsection 62A (1) sets out the conditions under which there is a same-day addition in relation to a settlement.
	Subsection 62A (2) defines the value of a same-day addition which is the increase in value in settlement B.
	Subsection 62A(3) defines the relevant period for the purpose of a same-day addition as the period beginning with the commencement of settlement A or B as appropriate and ending immediately after the transfer of value as defined in subsection (1)(a) or (b).
	Subsection 62A (4) provides that a transfer of value on creation of a settlement can be a same-day addition but not if settlements A and B are related settlements (settlements created on the same day).
	Subsection 62A (5) makes it clear that there can be a same-day addition where there is an increase in the value of property comprised in a settlement without an increase in the amount of the property.
	Subsection 62B (1) provides that there will not be a same-day addition if certain conditions are met. Those conditions include:
	property in either settlement A or B being held for charitable purposes;
	either or each of settlement A and settlement B being a protected settlement (see paragraph 11 below);
	the transfer of value being in connection with payment of premiums of life insurance due at regular intervals of one year or less throughout the contract term.
	Subsections 62B (2) to 62B(4) provide that where the value of an addition is £5000 or less there will not be a same-day addition. The provision is restricted to transfers of value of £5000 or less made during the settlor’s lifetime. It also contains an anti-fragmentation rule to prevent individuals avoiding the same-day addition rules by transferring amounts in excess of £5000 to settlement A in multiples of £5000.
	Subsections 62C(1) to 62C(4) provide an exclusion from the same-day addition rules for settlements created before 10 December 2014 where:
	no additions have been made by the settlor after that date; or
	the only addition has been made under a will executed before the 10 December 2014 where the settlor dies before 6 April 2017.
	Paragraph 3 amends section 66 of IHTA 1984, which provides for the rate of the ten-yearly charge. The amendment provides that the value of the property held on trust that is taken into account when determining the ten-yearly charge is to include:
	the value of any same-day addition; and
	the initial value of property in other trusts (other than protected settlements and related settlements) that have increased in value on the same day.
	The amendment also removes the requirement to take into account the value of trust property that has never become relevant property.
	Paragraph 4 amends section 68 of IHTA 1984, which provides for the rate of tax when property leaves a trust before the first ten-year anniversary. The amendment provides for the inclusion of same-day additions and the exclusion of property that has never become relevant property for the purpose of calculating this charge.
	Paragraph 5 amends section 69 of IHTA 1984, which provides for the rate of tax when property leaves a trust between ten-year anniversaries. The amendment provides for the inclusion of same-day additions and the exclusion of property that has never become relevant property for the purpose of calculating this charge.
	Paragraph 6 amends section 71F of IHTA 1984, which provides for the rate of tax on property leaving 18/25 Trusts under section 71E of IHTA 1984. The amendment provides that only the value of property in a related settlement which was property to which section 71D (Age 18 25 trusts) applied when the settlement commenced is aggregated.
	Paragraph 7 contains commencement provisions and provides that the amendments will take effect in relation to tax charges arising on or after the date on which Royal Assent to Finance (No.2) Act 2015.