Commentary

I5.252 QIIP—reversion to settlor, spouse etc

IHT, trusts and estates

I5.252 QIIP—reversion to settlor, spouse etc

I5.252 QIIP—reversion to settlor, spouse etc

If settled property reverts to the settlor, his spouse or civil partner, during his life then there is no IHT charge on the property if the reversion is simply the coming to an end of an interest in possession in the settled property during the life of the person entitled to that interest1. This could include the disposal of a qualifying interest in possession (QIIP — I5.203), which is treated as a coming to an end of it by virtue of IHTA 1984, s 51(1) and (1A), (1B).

The exclusion will also apply where the settlor died less than two years earlier and the reversion passed to his widow, widower or surviving civil partner.

For there to be an IHT charge in the first place the interest in possession must be a QIIP, so this relief is necessarily only relevant on the coming to an end of such an interest. Therefore, if an interest in possession which was subsisting before 22 March 2006 comes to an end before, on or after 22 March 2006, and the underlying trust property reverts to the settlor etc, there will be no IHT charge. Similarly, when an interest in possession which arises on or after 22 March 2006 and which is a disabled person's interest or a transitional serial interest comes to an end, and the trust property reverts to the settlor etc, there will be no IHT charge.

Property held on an immediate post-death interest (IPDI — see

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