Quick Succession Relief (QSR) and IHT: How Section 141 IHTA 1984 Reduces Double Death Taxation
When two people die within 5 years of each other and the same assets pass through both estates, Quick Succession Relief gives a sliding-scale credit against the IHT at the second death — reducing the double-tax effect. The credit is 100% if death follows within a year, tapering to 20% if between 4 and 5 years. No QSR applies after 5 years.
QSR Taper Table
| Period between deaths | QSR credit rate |
|---|---|
| Within 1 year of first death | 100% of the tax attributable to the transfer |
| Between 1 and 2 years | 80% |
| Between 2 and 3 years | 60% |
| Between 3 and 4 years | 40% |
| Between 4 and 5 years | 20% |
| More than 5 years | No QSR available |
Credit applied against IHT attributable to the transferred property at the second death. Section 141 IHTA 1984.
Key Points on Quick Succession Relief
When does QSR apply?
QSR applies where: (1) a person (the transferee) received a transfer of value from another person's (the transferor's) estate — whether on death or as a chargeable lifetime transfer — within the 5 years before the transferee's own death; (2) IHT was actually charged on that transfer in the transferor's estate (QSR is a credit against tax, so where the transfer was exempt or below the NRB and no tax was paid at the first death, there is no QSR); and (3) the transferee's estate includes property that was derived from the transfer. The property in the second estate does not have to be the same property that was transferred — QSR applies to property derived from the transfer (e.g. proceeds of selling a house received in an inheritance can be the basis for QSR on those funds in the second estate).
How is the QSR credit calculated?
The QSR credit is a percentage (from the taper table) of the lower of: (1) the tax attributable to the original transfer in the first estate — i.e. the IHT actually charged on the transfer that passed to the transferee; and (2) the tax attributable to the transferred property in the transferee's estate — i.e. the IHT effectively charged on the derived property at the second death. 'Tax attributable' is apportioned: if the original estate included many assets and the taxable estate was £1m, with £200,000 attributable to the transferred property, the IHT attributable to the transfer is the proportionate share of the total tax. The QSR credit reduces (but does not eliminate) the IHT on the second estate — the net result is that the total IHT on both deaths is reduced compared with two full charges.
The QSR mechanism on death within 1 year
Where the second death occurs within 12 months of the first, the QSR credit is 100% of the tax attributable to the transfer — effectively, the IHT on the first death that related to the transferred property is credited in full against the IHT on the second death. This does not mean no IHT is payable at the second death — it means the IHT charged at the first death on the transferred assets is credited, so the net tax across both deaths is reduced. Where property passes through multiple deaths within close succession (e.g. a grandparent, then a parent, then a child, all dying in quick succession), QSR can apply at each stage — but only if IHT was actually charged at the previous death.
QSR and transfers to a surviving spouse
Where property passes to a surviving spouse on the first death (exempt under the spousal exemption — no IHT paid), there is no QSR available at the second death, because QSR requires IHT to have been charged at the first death. However, if property passes to the spouse's estate and the spouse then leaves it to children, and the spouse dies within 5 years of the first death, the children can claim QSR at the second death to the extent IHT was charged on the first estate. Note: where property passes through a NRB discretionary will trust (not to the spouse directly), and is then distributed to a beneficiary, QSR may be available if the distribution to the beneficiary occurs within 5 years of the first death — but only to the extent IHT was charged on the first death.
QSR and lifetime chargeable transfers
QSR is not limited to death estates — it also applies where a transferee received a chargeable lifetime transfer (CLT) within 5 years before their death, and IHT was charged on that CLT. This can arise where a settlor made a CLT into a discretionary trust, the trust distributed assets to a beneficiary within 5 years of the CLT, and the beneficiary then died within 5 years of the CLT. The beneficiary's estate can claim QSR for the IHT charged on the CLT attributable to the distributed property. However, given the 7-year PET rule and the fact that most CLTs attract no IHT at the time they are made (if the settlor has NRB available), QSR on CLTs is less commonly encountered.
Frequently Asked Questions
Does QSR reduce the IHT at the second death to nil?
QSR reduces the IHT at the second death by a credit equal to a percentage of the IHT attributable to the transferred property at the first death. It does not bring the IHT at the second death below what would be payable on the second estate's other assets. For example: if the second estate has £800,000 of assets (all derived from the first estate), and IHT at the second death would be £180,000 (after NRB), and QSR is 100% of the IHT attributable at the first death (say, £70,000), the net IHT at the second death is £180,000 – £70,000 = £110,000. QSR eliminates the double-charge effect — it does not eliminate IHT on the second estate entirely.
Does QSR apply if the property has changed form since the first death?
Yes — QSR applies to property derived from the transfer, not to the original property in identical form. So if a person inherits cash (which was subject to IHT at the first death) and uses it to buy shares, and then dies within 5 years, QSR is available because the shares are derived from the inherited cash (which came from the first estate on which IHT was paid). HMRC accept that QSR applies to traceable proceeds — provided the connection between the original transfer and the current property can be traced. Where the property has been mixed with other assets and cannot be reliably traced, the QSR claim may need to be apportioned.
Can QSR be claimed on the IHT400 estate return?
Yes — QSR is claimed on form IHT400 in the section dealing with reliefs and exemptions. The personal representatives of the second estate complete the relevant boxes showing: (1) the date and value of the transfer from the first estate; (2) the IHT paid on the first estate attributable to the transfer; (3) the period between the first and second deaths (to determine the taper percentage); and (4) the IHT attributable to the derived property in the second estate. HMRC will cross-check the QSR claim against the IHT paid on the first estate — so accurate records of the first estate's IHT liability and the assets transferred are needed.
What if the first death IHT is still being paid by instalments?
Where IHT on the first estate is being paid by instalments (e.g. on land or unlisted shares), and the transferee dies before all instalments are paid, the amount of IHT 'paid' for QSR purposes is the amount actually paid — not the total tax assessed. This can reduce the available QSR credit. The personal representatives of the second estate should obtain the precise IHT paid to date on the first estate before calculating the QSR claim. Instalments paid after the second death cannot form the basis of a retrospective QSR credit — only instalments actually paid by the date of the second death are counted.
Does QSR interact with BPR or APR on the second estate?
QSR and BPR/APR are applied independently. BPR/APR reduces the value of qualifying assets before calculating the IHT charge at the second death. QSR then applies as a credit against the remaining IHT charge. Where the property qualifies for BPR or APR at both deaths, the effective IHT on each estate is low — QSR may produce a minimal credit. Where the property qualified for BPR/APR at the first death but not the second (e.g. business sold before the second death), QSR provides a credit for IHT paid at the first death (zero, because BPR applied), so again the QSR credit would be nil. QSR is only meaningful where IHT was actually paid at the first death without full BPR/APR or spousal exemption.
Does QSR apply to assets held in a discretionary trust after the first death?
QSR may apply to assets held in a discretionary trust after the first death — but the timing is critical. Where a discretionary will trust is set up on the first death, and assets are appointed out of the trust to a beneficiary who subsequently dies within 5 years of the first death, QSR can be claimed by the beneficiary's estate — provided IHT was paid on the first estate (or on the appointment, if it was an exit charge). The 5-year period runs from the original transfer (the first death or the CLT), not from the date of the appointment. HMRC will consider the timing of the original taxed transfer and the second death when assessing the QSR taper.
Make Sure Your Executors Know About QSR — It Can Save Thousands
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