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