Commentary

I12.720 Interest in possession trusts

IHT, trusts and estates

I12.720 Interest in possession trusts

Pre 22 March 2006 Settlements

I12.720 Interest in possession trusts

Interest in possession trusts set up before 22 March 2006 retain the inheritance tax treatment which applied prior to the 2006 changes. The settled property therefore forms part of the estate of the interest in possession beneficiary and will be aggregated with the free estate on his or her death.

If the trust is brought to an end in the lifetime of the income beneficiary, there will be a potentially exempt transfer if the funds then pass to another individual who is absolutely entitled. If the funds continue in trust

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