Commentary

I5.621A Tax implications of advancements or forfeiture of protective trust

IHT, trusts and estates

I5.621A Tax implications of advancements or forfeiture of protective trust

I5.621A Tax implications of advancements or forfeiture of protective trust

Advancements before forfeiture

Where a protective trust was created after 22 March 2006 (and is not a an immediate post-death interest (I5.205), a disabled person's interest (I5.207), or a transitional serial interest (I5.206)) it will be a relevant property trust. This means that any advancements will give rise to exit charges — see Division I5.3.

As an advancement is excluded from being a case of failure or determination under the Trustee Act 1925, s 33(1)(i), it is not disregarded for IHT purposes. For advancements from qualifying interests in possession (QIIP) this has the consequence that an advance to, say, a remainderman during the trust period would be a transfer of value on the termination (or partial termination) of an

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