Exit charge is a charge on trustees of a relevant property trust when an exit arises. Exit charge arises usually on distribution of capital to a beneficiary, termination of the trust and distribution of the whole fund and when a property no longer qualifies as a relevant property. This document discusses the basis of exit charge calculation, and the proforma. It also covers exit charge rules on BPR and APR, exceptions from an exit charge.

Points discussed within this guidance note:

> The occasion on which an exit charge arises

When a trust property ceases to be relevant property it becomes subject to an iht exit charge. The usual occasion on which an exit charge arises is the distribution of capital to a beneficiary but there are other occasions when this applies which the note sets out.

> The basis of an exit charge

The IHT exit charge calculation value depends on who is to pay the tax and the payable amount is based on the value by which the relevant property in the trust has decreased. This note details how this is calculated depending on situation.

> Calculation of the exit charge

> Calculation of the exit charge before the first TYA

> Same day addition

> Exit charge proforma

> Calculation of the exit charge between ten-year anniversaries

> Business property relief (BPR) and agricultural property relief (APR)

> Exceptions from an exit charge

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