Defined person - exceptions to section 86 - death or divorce
There are a number of exceptions when section 86 does not apply to a qualifying settlement in which the settlor has an interest.
Death of beneficiary
Section 86 does not apply for a year in which the settlor has an interest only because one or more defined persons other than the settlor can benefit and that person or those persons die.
Divorce of beneficiary
Section 86 does not apply for a year if the settlor has an interest in the settlement because a defined person, including the settlor, is married to or is the civil partner of a person who can benefit and the marriage or civil partnership ends.
The settlor’s children are excluded from benefitting from the settlement but the settlor’s son marries a person who can benefit. TCGA92/Sch5/para2(3)(d) provides the settlor’s daughter-in-law is a defined person. If the marriage ends the former daughter-in-law can still benefit but TCGA92/Sch5/para4(4) prevents section 86 applying to the settlor.