IHTM42117 | Proportionate charges: excluded periods

From HM Revenue & Customs · Inheritance Tax Manual

First quarter

Proportionate charges can arise at any time during the life of the trust except that under , no proportionate charge arises if the exit event occurs in the first quarter following

the day the settlement commenced, or
the date of a ten-year anniversary.

However, because there is no IHT charge the trustees will not be able to claim Capital Gains Tax (CGT) holdover relief under . ()

New will trusts - S144

allows trustees to distribute from a will trust within two years of the death without a proportionate charge arising.()

Again, there is no chargeable event, and so holdover relief does not apply to the transfer for CGT purposes.