IHTM11094 | Exceptions where the exemption does not apply: payments under I(PFD)A Orders

Orders (IHTM11025) made under the Inheritance (Provision for Family and Dependants) Act 1975 often provide that capital payments to the deceased’s spouse or civil partner (IHTM11032) are to be made on future dates. This is sometimes done to allow trustees time to sell assets so that payment can be made. So, payments may not be due until long after the death and some time after the date of the order. This does not prevent the payments being spouse or civil partner exempt. However, any case in which payment is to be made more than six months after the date of the order, or where the Order appears to have been made by agreement of the parties ‘out of Court’, should be referred to Technical.

The amount you should exempt is the amount of the payments, subject to any interaction (IHTM26101). You should not discount the amounts because of the delay in payment.

You should also note that where:

an order in favour of a chargeable beneficiary results in capital payments to that beneficiary reducing the amount of the estate passing to the deceased’s spouse or civil partner, or

• the spouse or civil partner settles (IHTM11026) a claim out of their own resources,

• this may result in a reduction in the amount of exemption due.