Valuation date and the value of benefits

Limited interest

If you inherit less than the full or absolute ownership of a gift or inheritance it is called a limited interest. You may inherit a limited interest for life, or for a specified time.

The taxable value of a limited interest is less than the taxable value of a full or absolute ownership or interest. The taxable value of a limited interest is calculated based on two criteria.

In the case of a:

  • life interest, the age and gender of the beneficiary
  • specified period of time, the number of years for which the benefit is taken.

You will need the tables on the ‘Factors used for calculating value of limited interest’ page to calculate the taxable value for:

  • a single life
  • joint lives
  • the longer of two or more lives
  • an interest that is guaranteed for a specified time.

Next: Factors used for calculating value of limited interest