Relevant property trusts—the exit charge
Produced in partnership with Alexander Erskine and Charlotte Matthews of Taylor Wessing LLP
Relevant property trusts—the exit charge

The following Private Client guidance note Produced in partnership with Alexander Erskine and Charlotte Matthews of Taylor Wessing LLP provides comprehensive and up to date legal information covering:

  • Relevant property trusts—the exit charge
  • The exit charge—what constitutes an 'exit' subject to charge?
  • Exit charge—exit within first ten years
  • Exit charge—exit after first ten-year anniversary
  • Planning tips for exit charges after the first ten-year anniversary?

FORTHCOMING CHANGE: As originally announced at Autumn Budget 2017 and followed up by written statement after Spring Statement 2018, plus an announcement in Budget 2018, the government ran a consultation on the taxation of trusts from 7 November 2018 to 28 February 2019, inviting views on the principles of transparency, fairness and simplicity that it believes should underpin the taxation of trusts. In response, in July 2019, the Office of Tax Simplification issued its second report on inheritance tax. See also the report published by the All-Party Parliamentary Group for Inheritance & Intergenerational Fairness in January 2020 recommending the adoption of a new inheritance tax regime. See also the research exploring the use of trusts which was also published on 7 November 2018. See News Analysis: Exploring the consultation and review on the taxation of trusts.

This Practice Note has been written to be read alongside:

$1

Click here to view or print a full-size PDF version.

For an introduction to the relevant property regime for trusts, see Practice Notes: Trusts—inheritance tax—overview and The meaning of relevant property.

The charge to inheritance tax (IHT) on relevant property arises on two occasions:

  1. the periodic ten-year anniversary of the settlement's creation (the principal (ten-year) charge), and

  2. when property (or value) ceases to be relevant property other than on excepted occasions (the exit charge)

For further guidance on the