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HMRC internal manual

Inheritance Tax Manual

Settled property: charges on special trusts

IHT is also charged on special trusts. The common feature of the special trusts is that they are not liable to the ten yearly and proportionate charges that apply to other discretionary trusts. Otherwise the tax treatment of property held on special trusts varies. It may be

  • liable to tax only in some circumstances, for example, a temporary charitable trust, IHTA84/S70 or accumulation and maintenance trusts (IHTM04099), IHTA84/S71, or
  • treated as if the principal beneficiary had an interest in possession, for example, protective, (IHTM04101) IHTA84/S88 and disabled trusts (IHTM04102), IHTA84/S89.