I am dealing with an estate whereby the deceased was the life tenant of a property held under the SLA 1925 created by the death of his father in 1985. On his death the property passes to his daughters.
My understanding is that the value of the property will be treated as an IIP and therefore be aggregated with his estate for IHT.
Can anyone point me in the right direction as to the authority for this?
Matthew Cooper
WBW Solicitors
The tenant for life’s entitlement under an SLA trust is an interest in possession and, when that interest terminates upon their death is subject to IHT under s.52 IHTA 1984 (unless the SLA trust has become a relevant property trust for IHT consequent upon the 2006 changes).
Paul Saunders
Thank you Paul, this is what I thought. Could you expand on your last comment if possible regarding 2006 changes. You seem to indicate that it possibly might not be treated as an IIP?
Matthew Cooper
WBW Solicitors
Matthew
I was speaking in more general terms in referring to the 2006 changes.
If the daughters in your case inherit absolutely, then the relevant property regime will not apply.
However, if one, or both, daughter was entitled to a limited interest following the death of the former tenant for life then, provided that no disabled person’s interest arose, the relevant property regime would apply even if the new interests were still within the Settled Land Act regime.
Paul Saunders