Commentary

I5.375 The death of the settlor

IHT, trusts and estates

I5.375 The death of the settlor

I5.375 The death of the settlor

On the death of the settlor the trustees will be liable for any additional tax due on the transfer of assets1 if the settlor has died within seven years of transferring the assets to the settlement.

In practice there will usually be no increase in tax payable by reason of a higher rate of tax applying if the settlor has survived for five years. It will in some cases be possible that an increase might occur if his death gives rise to failed PETs, or the BPR and APR clawback rules apply.

BPR and APR may also be clawed back where a beneficiary has become entitled absolutely to (or to a QIIP), in the

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