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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Settled property: charges on temporary charitable trusts

Settled property which for a limited period, however defined, can be applied only for charitable purposes is excluded from the ten-yearly and proportionate charges.

But tax is charged when

  • property ceases to be held for charitable purposes, IHTA84/S70 (2)(a) or
  • the trustees make a disposition (IHTM04023) which reduces the value of the property so held, IHTA84/S70 (2)(b). Any application of the property for charitable purposes does not give rise to a charge.