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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

2006 IHT changes: IHT and CGT treatment from 22 March 2006: settlements and death of person with actual or deemed interest in possession

These are all cases where a person with an actual IIP, or a deemed IIP for IHT, dies.

Cases where property ceases to be settled for IHT purposes.

| Type of transferor trust for IHT | Chargeable transfer for IHT? | Disposal for CGT? | Can Holdover Relief be claimed? | || | IPDI, Pre 200306 IIP, TSI or Disabled
Trust with Actual IIP: with settled
property passing to spouse or civil
partner of the previous income
beneficiary | No charge
IHTA84/S18
exemption | TCGA92/73 applies
death uplift; liability
only if TCGA92/S74
applies | S165
possible | | IPDI, Pre 200306 IIP, TSI or Disabled
Trust with Actual IIP: other cases | Yes. Added
to
deceased’s
estate. | TCGA92/73 applies;
death uplift; liability
only if TCGA92/S74
applies | S260(2)(a) | | IPDI, Pre 200306 IIP, TSI or Disabled
Trust with Deemed IIP: with settled
property passing to spouse or civil
partner of the previous income
beneficiary | No charge
IHTA84/S18
exemption | TCGA92/S71(1)
applies; no uplift | S165
possible | | IPDI, Pre 200306 IIP, TSI or Disabled
Trust with Actual IIP: other cases | Yes. Added
to
deceased’s
estate. | TCGA92/S71(1)
applies; no uplift | S260(2)(a) | | Scottish proper liferent or Northern
Irish legal interest for life | Depends on
status for
IHT | TCGA92/73 applies
death uplift; liability
only if TCGA92/S74
applies | S260(2)(a) | | Trust for Disabled with Deemed IIP:
with property passing to spouse or civil
partner of the disabled beneficiary | No | TCGA92/S71(1)
applies; no uplift | S165
possible | | Trust for Disabled with Deemed IIP:
any other situation | Yes. Added
to
deceased’s
estate | TCGA92/S71(1)
applies; no uplift | S165
possible | | Bereaved Minor Trust: death of
relevant beneficiary | No | TCGA92/73 applies
death uplift; liability
only if TCGA92/S74
applies | S260(2)(da) | | 18-25 Trust: death under 18 | No | TCGA92/73 applies
death uplift; liability
only if TCGA92/S74
applies | S260(2)(db) | | 18-25 Trust other | Yes under
S71E | Yes | S260(2)(a) | | Relevant Property Trust: settlor etc
interest settlor dies | Depending
on facts may
be
chargeable
under gifts
with
reservation
rules | Yes | S260(2)(a) | | Relevant Property Trust: any other
case with actual or deemed interest in
possession | Yes | Yes | S260(2)(a) |

*Note that TCGA92/S165 is only available for certain assets.

For categories of case. see CG36541.

For gifts with reservation please see the IHT Manual.