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HMRC internal manual

Inheritance Tax Manual

Excepted settlements - statutory clearance

There is generally no statutory clearance for an excepted settlement because the death of the settlor within seven years of making the transfer may affect the rate that tax is charged on a settlement as any potentially exempt transfers (IHTM04057) fail and cumulate with other chargeable transfers. The only exception is for a pilot trust where unless we issue a notice to the trustees to deliver an account within 6 months of the date of the occasion of charge, they are discharged from any claim to tax.

The discharge does not apply, however, if we have been given false information or if all the material facts have not been disclosed and it only applies to the trustees’ liability for tax.