Commentary

I9.341 Reversionary interests in settled property

IHT, trusts and estates

I9.341 Reversionary interests in settled property

Reversionary interests as excluded property

I9.341 Reversionary interests in settled property

The treatment of reversionary interests in cases involving a foreign element is complicated1. The relevant statutory provisions are as follows.

The general rule2 is that a reversionary interest3 is excluded property unless:

  1.  

    (a)     it has at any time been acquired, either by the person entitled to it or by a person previously entitled to it, for a consideration in money or money's worth4; or

  2.  

    (b)     it is one to which the settlor or his spouse or civil partner5 is or has been beneficially entitled6; or

  3.  

    (c)     it is an interest expectant on the determination of a lease of property which is for life or lives, or for a period ascertainable only by reference to a death and not granted for a full consideration in money or money's worth7;

  4.  

    (d)     for arrangements entered into on or after 20 June 20128:

    1.  

      •     a UK-domiciled individual acquires an interest in settled property for consideration and either:

      1.  

        –     the settlor was not domiciled in the UK at the time the settlement was made and the relevant settled property is situated outside the UK; or

      2.  

        –     the settlor was not an individual or a close company at the time the settlement was made and the settlor was domiciled in the UK at the time the settlement was made and the relevant settled

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