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HMRC internal manual

Inheritance Tax Manual

Reversionary interests: introduction

A reversionary interest (IHTM16231) is excluded property (IHTM04251) and therefore outside the scope of Inheritance Tax, IHTA84/S48 (1) except

  • if the interest has been purchased, (IHTM04282) IHTA84/S48 (1)(a) or
  • if the settlor, their spouse or civil partner (IHTM11032) is or has been beneficially entitled to the interest, (IHTM04283) IHTA84/S48 (1)(b) or
  • if the interest is expectant on the determination of a lease for life treated as a settlement, (IHTM04284) IHTA84/S48 (1)(c).

If the form IHT418 includes the name of the life tenant and there is no indication they died before your deceased, and the interest is deducted as excluded property on page 4 of form IHT400, you will normally have all the information you need to accept that the interest is excluded property.

But you should raise any necessary enquiries if the position is not clear, particularly if there is any sign of commercial dealing with the reversion or if the deceased or their spouse or civil partner is the settlor.