999. Types of settlements and inheritance tax liability.

Settlements1 are divided into two main categories for the purposes of liability to inheritance tax:

  1.  

    (1)     settled property in which a qualifying interest in possession2 subsists; and

  2.  

    (2)     settled property in which no qualifying interest in possession subsists3.

The former type of settlement is governed, with suitable adaptations4, by the normal charging provisions5, since a person beneficially entitled to a qualifying interest in possession6 in settled property is treated for inheritance tax purposes as beneficially entitled to the property in which the interest subsists7.

The latter type of settlement is subject to a special charging regime