Commentary

I12.1112 Generation skipping dispositions

IHT, trusts and estates

I12.1112 Generation skipping dispositions

I12.1112 Generation skipping dispositions

A particular use of a will trust is to provide generation-skipping dispositions. Suppose a testator, T, is making his will. He has an adult child, B, who has two children, M and N. If he gives the property to B, B can make potentially exempt transfers in favour of M and N, but under IHT there remain several good reasons why a 'generation skipping' disposition by T's will directly in favour of M and N could be an advantage. If M and N are minors, it will be an advantage if B is not the 'settlor' for income tax purposes of property given to M and N (see I5.903). B can only (post 21 March 2006) make potentially exempt transfers in favour of M and N by way of absolute gifts. A gift

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