Capital Transfer Tax .281975-1986.29 History of inheritance taxes in the United Kingdom

denis healey replaced estate duty capital transfer tax in 1975

estate duty criticised failing capture value of gifts made more 7 years before person s death, of property vested in trusts prior death. in 1974 budget speech, denis healey, chancellor of exchequer, declared:

this implemented passage of finance act 1975, abolished estate duty , created capital transfer tax, following characteristics:

it captured transfers of value, not made @ arm s length basis, transferor s estate less in value after disposition before.
value defined price property might reasonably expected fetch in open market @ time; price shall not assumed reduced on ground whole property placed on market @ 1 , same time.
transfers (in excess of specified limits, or not otherwise excluded) made during person s lifetime accumulated tax assessed on sliding scale on total amount.
all transfers made @ death or within 3 years before taxable @ separate, higher sliding scale.
where transferor domiciled in united kingdom, tax chargeable on subject property; otherwise, chargeable on property situtated in uk.

ctt reduced in scope during thatcher years, rates applicable gifts adjusted encourage business property given during lifetime, , ten-year accumulation period introduced cap effect of graduated rates.

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