Qualifying interest in possession

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Qualifying interest in possession

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
imgtext

This guidance note covers what an interest in possession is and what it means to have an interest in possession. The note also considers when trusts are qualifying or non-qualifying in detail. The IHT consequences of having an interest in possession are covered in the Qualifying interest in possession trusts ― IHT treatment guidance note.

Significance of a qualifying interest in possession

Where a beneficiary’s entitlement to trust property satisfies the definition of a qualifying interest in possession (QIIP), the trust property falls into their estate for inheritance tax purposes. See the Taxation of trusts ― introduction guidance note.

The inheritance tax treatment of trusts falls into two broad categories:

  1. beneficial entitlement (bare trusts and qualifying interests in possession) where the assets are taxed in the estate of the life tenant on death, and

  2. relevant property (non-qualifying interests in possession and discretionary trusts) which are subject to the relevant property IHT regime

Prior to 22 March 2006, all interest in possession trusts fell into the first category, but changes introduced

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Inter-spouse transfer

Inter-spouse transferIntroductionWhen a chargeable asset is transferred between two spouses or civil partners, there is a disposal by the transferor spouse / civil partner and an acquisition by the transferee spouse / civil partner for capital gains tax purposes. For simplicity, spouses and civil

14 Jul 2020 12:01 | Produced by Tolley Read more Read more

Corporate interest restriction ― administrative aspects

Corporate interest restriction ― administrative aspectsThe corporate interest restriction (CIR) regime has some specific administrative rules in addition to the general administrative requirements for corporation tax returns. This guidance note does not include commentary on provisions that are

14 Jul 2020 11:19 | Produced by Tolley Read more Read more

Supplies of goods and services connected with education

Supplies of goods and services connected with educationThis guidance note provides an overview of the VAT treatment of goods and services provided in connection with supplies of education. This should be read in conjunction with the following guidance notes:•Supplies of education•Local authority

14 Jul 2020 13:44 | Produced by Tolley Read more Read more