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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Gifts: Inheritance Tax: trusts for bereaved minors and age 18 to 25 trusts

TCGA92/S260(2)(da) and (db)

Finance Act 2006 introduced exemptions from Inheritance Tax for two new types of trusts for young people, bereaved minor’s trusts and age 18 to 25 trusts. In most cases these can be created only by the will of the young person’s deceased parent. In a bereaved minors trust the bereaved minor must become absolutely entitled to the trust property at 18. In an age 18 to 25 trust the beneficiary must become absolutely entitled to the trust property on or before his or her 25th birthday. IHTA84/S71B (2) and S71E(2) provide that there is no charge to Inheritance Tax when the beneficiary becomes absolutely entitled. TCGA92/S260 (2)(da) and (db) provide that hold-over relief is available for the CGT disposal.