Commentary

I11.713 HMRC GAAR guidance—pilot trusts

IHT, trusts and estates

I11.713 HMRC GAAR guidance—pilot trusts

I11.713 HMRC GAAR guidance—pilot trusts

Background

Settled property may be chargeable to IHT under the relevant property regime. A charge to tax will arise on the value of the settled property on every tenth anniversary of the settlement and a pro-rata charge will arise whenever property comprised in a settlement ceases to be relevant property. In determining the rate at which tax is charged on settled property, the value of all the property in settlements established by the same settlor on the same day – 'related settlements' – is taken into account.

The arrangements

C wishes to leave his estate in trust for his seven grandchildren. He wants to ensure that these settlements are not subject to IHT after his death. C establishes one settlement per day over a period of seven days, settling £100 on each. He revises his

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