Commentary

I5.228 The value on which IHT is charged for QIIPs

IHT, trusts and estates

I5.228 The value on which IHT is charged for QIIPs

I5.228 The value on which IHT is charged for QIIPs

In determining the value transferred under the rules detailed at I5.221 the qualifying interest in possession (QIIP) must be valued separately from other property (such as shares of the same type as ones included in the settled property) of the person entitled to the QIIP (the life tenant). This is because of the specific provision that the value treated as transferred is 'the value of the property in which his interest subsisted'1.

This means that where a person disposes of, say, a 30% holding in a private company (as life tenant) and a 30% holding (owned absolutely), the order in which he disposes of the two interests will make a difference to the overall amounts on which IHT will be imposed. See Examples 2 and 3 in I5.286. If he disposes of both on the same day, it seems that IHTA 1984, s 266(1) will apply to minimise the values on which tax is charged: see I3.525 and Example 4 in I5.286.

Related property

Where the value of any property comprised in a person's estate would be less than the appropriate portion of the value of that and any related property2 it shall

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