Commentary

I11.214 Events during the life of a settlement

IHT, trusts and estates

I11.214 Events during the life of a settlement

I11.214 Events during the life of a settlement

Interest in possession settlements

Where a person with a beneficial interest in possession in a settlement dies and the interest falls within IHTA 1984, s 49(1A) the settled capital will be aggregated with the deceased's free estate to ascertain the applicable rates of IHT1. The deceased's personal representatives are liable for IHT on the free estate and the trustees for IHT on the settled property (except in the case of settled land ceasing to be settled on the death and so vesting in the deceased's personal representatives who are then liable to the exclusion of the trustees)2. However, the personal representatives must deliver an account of both the free estate and the settled property, and property which forms part of the estate by virtue of FA 1986, s 102(3) (the gifts with reservation provisions—see I3.436)3. On delivery of the account they must pay the IHT on the free estate and they may pay the IHT on the settled property if the trustees so request them, in which case they will have a right to reimbursement from the trustees4. Even if the personal representatives have already delivered an account of the settled property, the trustees must still deliver an account before the expiry of 12 months from the end of the month in which the deceased died5.

Where an event other than the death of a person with a beneficial interest in possession in a settlement causes a charge to arise

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial