Appointments from trusts within two years

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note explains the inheritance tax consequences of making an appointment from a Will set up in a trust within two years of the death. It also considers the capital gains tax consequences which are not the same as those of a deed of variation and care should be taken not to trigger an inadvertent capital gains tax liability.

Relief for appointments from Will trusts

If a Will creates a relevant property trust and within two years of death there is a distribution (or other event) which would otherwise have given rise to an exit charge because the property ceases to be relevant property, then:

•
there is no exit charge, and
•
the inheritance tax legislation has effect as if the Will provided for the distribution

IHTA 1984, s 144

Whilst most relevant property trusts are discretionary trusts, the rules can also apply to other forms of relevant property trust such as trusts for bereaved minors (see the Trusts for bereaved minors guidance note) and 18-25 trusts (see

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Trusts and Inheritance Tax

BPR ― trading and investment businesses

BPR ― trading and investment businessesIntroductionThe basic qualification rules for business property relief (BPR) are illustrated in the Flowchart ― trading or investment business for BPR purposes.For an overview of BPR, see the BPR overview guidance note.Relevant business propertyThe main

14 Jul 2020 15:36 | Produced by Tolley Read more

Owner-Managed Businesses

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more

Corporation Tax

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley Read more

UU��ֱ��