I7.161A BPR and QIIP trusts
Where settled property is subject to a qualifying interest in possession (QIIP) (see Division I5.2) to which an individual is beneficially entitled, the person entitled to the interest in possession (the 'life tenant') is treated as the owner of that property1. The termination of all or a part of his interest during his life is treated for the purposes of IHTA 1984, including BPR, as a transfer of value by him of the settled property subject to the interest2. If he dies while still entitled to the interest, the settled property forms part of the transfer of value he is treated as having made immediately before his death3. Settled property and absolute property used by him in a business may in these circumstances be taken together as constituting a business entitled to 100% relief4 (see I5.273A). There are also specific rules that the voting rights of shares subject to his interest are treated as his rights for the purposes of deciding whether he has control of a company (see I7.112C)5.
Accordingly, the availability of BPR is determined by treating the life tenant as the transferor, and as entitled to the settled property so long as he is or was beneficially entitled to an interest in it, and then by checking if the conditions for obtaining BPR in any of the categories considered above in this Division are satisfied on that basis.
For a more detailed account of the interaction of the rules for BPR with the rules