Commentary

I5.211 Interests in part of property or income of a QIIP

IHT, trusts and estates

I5.211 Interests in part of property or income of a QIIP

I5.211 Interests in part of property or income of a QIIP

Where a person is entitled to part of the income of settled property (the 'life tenant'), his interest in the underlying property is deemed to be a similar proportionate amount1.

Property yielding income

It is important to note that this provision deals with a right to a proportionate part of the income of property; a right to a specific sum per year (or other period) payable out of income is provided for separately (see I5.212). It applies to interests in part of income, but not to interests in all the income of a part of capital.

Example

Consider the following scenarios:

  1.  

    (a)     A trust fund is held as to an undivided half share in trust to pay the income to A during his life, and as to the other undivided half share to pay the income to B during his life. Each beneficiary has a right to all of the income from half of the assets. Because it is an undivided share, there is no specific allocation of assets to each half

  1.  

    (b)     A trust fund is held on trust to pay half the income to A during his life and half the income to B during his life. Each

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