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IHTM42070 | Relevant property trusts: chargeable events

From HM Revenue & Customs · Inheritance Tax Manual

A transfer of assets into a trust of relevant property (IHTM42161) is an immediately chargeable transfer by the settlor. (IHTM42075)

The main occasions of charge on relevant property are:

  1. A proportionate/exit charge on distributions or dispositions from the trust in the first ten years since property was first added to the settlement (before the first ten year anniversary). The claim is under IHTA84/S65 and the tax is calculated under IHTA84/S68

  2. The ten year anniversary (the principal charge). The claim is under IHTA84/S64 and the tax is calculated under IHTA84/S66

  3. A proportionate/exit charge on distributions, dispositions or where property becomes excluded property as a result of the settlor ceasing to be long-term UK resident (IHTM47000) between ten year anniversaries. The claim is under IHTA84/S65 and the tax is calculated under IHTA84/S69

Charging provisions are explained in more detail at chapter 4 of the manual from IHTM04095.