I wonder if anyone is online and available to answer a question.
I have a client who wishes to pass a share of their residuary estate to an IIP for their adult child, with a possibility of capital in the future. I found a great trust clause in Parkers WP, saying that the income to go to X, all family potential capital beneficiaries but with capital only to X in their lifetime.
I’m confident its an IIP, and that if capital is advanced this ends. What I cannot seem to answer is if capital is advanced in part, does the whole fund cease to be an IIP or just for the capital that has been advanced, the rest held as an IIP?
S.50 IHTA. Where there is only one QIIP owner the result is satisfactory.
There is however considerable doubt where there are joint owners, especially where the QIIP is a right of occupation.
Take a simple example of X and Y being entitled to reside in Greenacre for life. X ceases to reside. Does Y have a QIIP in the entire property or only in half and a NQIIP in the other half?
Answers on a postcard, or perhaps an elusive form CAP 5AC, to Inheritance Tax, HMRC, BX9 1HT.
No, I can’t think of any specific case, but there must be some older authorities where an advance was made and the parties (including the Court) all just accept that the unaffected assets remain on the original trusts.
If you are concerned about losing IPDI status, then I doubt there is any authority but you can argue it by reference to the terms of s.49A, which defines an IPDI by reference to the settled property (i.e. specific assets) rather than the settlement. As mentioned above, an advance does not affect the trusts applicable to the remaining trust fund.