Commentary

I3.752 Reversionary lease schemes

IHT, trusts and estates

I3.752 Reversionary lease schemes

I3.752 Reversionary lease schemes

Arrangements using reversionary leases have been considered as a means of making an IHT effective gift of land which the donor wishes to go on occupying for the time being. However, the arrangements are considered to fall foul of the pre-owned assets tax regime.

The arrangements, like those considered in the Ingram case (see I3.751), take advantage of the fact that under the law of England and Wales several distinct interests can exist concurrently in the same property. In summary, the planning involves the grant of a lease at no rent or other consideration (and with no tenant's covenants) for a term of, for example, 999 years to commence at a time which is estimated to occur after the donor's death. The donor may then continue to enjoy the property (as he continues to hold the freehold interest) until the date when the lease is to commence; if he dies in the meantime the value of the property in his

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