Section 144 query

I am looking at a Deed of Surrender that relinquishes a life interest and accelerates remainder interests under a will. It has not been executed under s.142 IHTA and the life tenant did not in any way benefit from any assets in the estate (just cash in the bank under the executors’ control). I am wondering if s.144 applies, because despite the IPDI arising under the will, no actual IIP has subsisted in any of the property (directly or indirectly), and it is within 2 years of death. Thanks in advance.

Regardless of whether the life tenant actually received any benefit, for IHT purposes the IPDI will have existed immediately upon the testator’s death. Accordingly s.144 IHTA 1984 cannot apply.

Whilst reference is to a surrender, was this truly a surrender or could it reasonably be construed as a disclaimer?

Either way, I suggest that it would be appropriate to look at the advice received when the deed was made as the intention may have been for the life tenant to make a PET, so as not to disturb the IHT position on the death of the testator.

Paul Saunders FCIB TEP

Independent Trust Consultant

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