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IHTM16133 | Rights of residence: action in Compliance Group

From HM Revenue & Customs · Inheritance Tax Manual

The leading case on rights of residence for IHT is IRC v Lloyds Private Banking [1998] STC 559 (see next page)

Most situations that arise in practice can be grouped under five headings:

  • The settlor (or testator) owns the entire property and gives it to trustees for a single beneficiary () on trust for life (or any shorter period)

  • The settlor (or testator) owns the entire property and gives it to trustees for more (or potentially more) than one beneficiary ()

  • The testator is a joint owner () and by will provides for the other joint owner to enjoy occupation of the whole undisturbed

  • The testator is a joint owner and by will leaves his or her share to a third party

  • The testator is a joint owner and leaves his or her half-share to trustees on non-interest in possession trusts, the other joint owner remaining in occupation as before

You should refer any other situations involving a right of residence to Technical.