I am dealing with an estate where the deceased was the tenant for life under a Settled Land Act trust created in the will of her father who died in the 1950’s. Am I right in thinking that this will be taxed as an interest in possession for inheritance tax purposes? I am sure it will but am struggling to find specific confirmation of this.
Bharbhage Singh
Fraser Brown Solicitors
I may be totally wrong but is there not an exemption where Estate Duty was paid on the first death? I cannot remember the precise authority for this but having started work at the tail end of the estate duty regime I thought this came in with the Capital Transfer Tax legislation.
Michael Packham
Standley & Co
The exemption can be found in IHTA 1984 Schedule 6 para 2.
Mark Woolley
PRICE BAILEY PRIVATE CLIENT LLP
If the daughter’s life interest arose on the death of her father, then it is a pre-22 March 2006 IIP and aggregable with her free estate for IHT purposes.
If she subsequently acquired the life interest, say on the death of her father’s widow (or any other prior life interest), again it will be aggregable if that interest vested in her on or before 21 March 2006.
With regard to the exemption where estate duty was paid, this transitional arrangement applies only on the termination of the interest which had passed to the widow(er) of the person upon whose death estate duty had been charged in respect of the estate/trust in question (Schedule 6, paragraph 2, IHTA 1984: http://www.legislation.gov.uk/ukpga/1984/51/schedule/6/crossheading/surviving-spouse-or-former-spouse).
Paul Saunders