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HMRC internal manual

Inheritance Tax Manual

Structure of the charge: how the meaning of estate is extended

A person is treated as being beneficially entitled (IHTM04031)

  • to settled property in which they have a beneficial interest in possession, IHTA84/S49 (1), except for certain interests under pension schemes, IHTA84/S151 (2) and (3), or trusts for the benefit of employees etc, IHTA84/S86.

For property where the interest in possession began on or after 22 March 2006, S49 (1) only applies to interests in possession where the interest is an immediate post- death interest, a disabled person’s interest or a transitional serial interest (IHTM16061).

  • to a direct interest in the whole (or an appropriate part) of the net assets of an unadministered residuary estate (IHTM22000) in which they have a beneficial interest,
  • to unsettled property over which they have a general power, (IHTM04034) IHTA84/S5 (2), except for certain interests in cash options under pension schemes, IHTA/S152. The scope of S5 (2) is extended to settled property in relation to interests under a registered pension scheme, IHTA84/S151 (4),
  • on their death, to property subject to a reservation (IHTM14301), FA86/S102 (3). The scope of FA 1986/S102 is extended to interests in possession to which S49 (1) applies that come to an end on or after 22 March 2006.