Incidence is to some extent statutorily regulated where part of the estate whether a specific legacy or a share of residue – is exempt from tax because it is passing to a spouse, a charity, or to some other exempt body. IHTA 1984, s. 41 provides that notwithstanding the terms of any disposition:

(1)none of the tax on the value transferred shall fall on any specific gift if or to the extent that the transfer is exempt with respect to that gift; and

(2)none of the tax attributable to the value of property comprised in residue shall fall on any gift of a share of residue if or to the extent that the transfer is exempt with respect to the gift.

The immediate effect of this is that:

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