Gifts: Inheritance Tax: gifts to settlor-interested settlements: donee becomes settlor-interested settlement after hold-over relief obtained
Subject to certain exceptions, any hold-over relief under TCGA92/S260 obtained in relation to a “relevant disposal” (see CG67068C) must be recovered from the transferor where the relevant disposal is to the trustees of a settlement if, within the “clawback period” (see CG67068C) (but after the relief was claimed)
- the settlement becomes a “settlor-interested settlement” (see CG67068A), or an “arrangement” (see CG67068A) comes into existence under which the settlement will or may become a “settlor-interested settlement”,
- the transferor is not an individual who has died before the “material time” (see CG67068C).
[TCGA92/S169C (1), (2), (5) and (6)]
The exceptions to this general rule are explained in CG67071.
CG67069+ tell you how the clawback provisions work and what consequential tax adjustments must be made. If the claim for hold-over relief under TCGA92/S260 is revoked or withdrawn, the provisions of TCGA92/S169C will apply as though the claim had never been made (see CG67066).
The extension of the definition of “interest in settlement” to include dependent children, see CG67068A, applies only to disposals made on or after 6 April 2006 for the purposes of TCGA92/S169C.