Relevant Property Regime or IIP

I am dealing wiht an estate. The facts are as follows:-

A has died. Her husband, R, died in May 2001 and in his Will he left his entire estate to his wife, A.

A Deed of Variation was executed in June 2002, implementing a Discretionary trust and R’s half share of the property was used to fund this.

A Deed of Appointment was drawn up in February 2008, whereby, out of the Discretionary Trust, A was given a right to occupy (or any income generated) in the property for the rest of her life.

As a consequence of the above, does A’s interest in the property belonging to the trust aggregate with her free estate for IHT purposes or is it still within the Discrtionary Trust?

Any guidance owuld be greatly appreciated.

Martyn Dixon
Harold Bell Infields & Co

As the interest in possession came into being after 21 March 2006 and is not within the types of IIP listed in s.49(2) IHTA 1984, it remains within the IHT relevant property regime and is not aggregable with the widow’s estate for IHT purposes.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

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After March 2006, the only way a qualifying IIP trust can be created (barring some exemptions) is via a will and on the basis that the life tenant is entitled to the IIP immediately on the death of the testator.

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