Q&As

Where a QIIP trust ends during the lifetime of the life tenant, and funds are appointed to an individual so the life tenant is deemed to make a PET, who is liable for IHT if the life tenant dies within seven years?

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Published on LexisPSL on 04/08/2021

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • Where a QIIP trust ends during the lifetime of the life tenant, and funds are appointed to an individual so the life tenant is deemed to make a PET, who is liable for IHT if the life tenant dies within seven years?

Where a QIIP trust ends during the lifetime of the life tenant, and funds are appointed to an individual so the life tenant is deemed to make a PET, who is liable for IHT if the life tenant dies within seven years?

The liability for the inheritance tax on a lifetime termination of a 'qualifying' interest in possession is set out in section 201(1)(a) of the Inheritance Tax Act 1984 (IHTA 1984), subject to the restriction in IHTA 1984, s 204(6)(b).

The trustees are primary liable for paying the inheritance tax which would arise if the life tenant were to die within seven years of the termination of the interest in possession. If the trustees do not pay by the due date for payment, the liability then also falls on any one or more

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