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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: gifts in consideration of marriage or registration of civil partnership: IHTA restriction of Rennell - S22(4)(b) provisions

IHTA84/S22(4)(b) brings ‘persons becoming entitled on the failure of trusts in favour of issue of the marriage or civil partnership’ within the range of permissible beneficiaries. Do not use the subsection to refuse exemption merely because such persons may not become entitled immediately on the failure of the trusts for the issue. For example, a trust for issue of a subsequent marriage or civil partnership (IHTM11032), inserted between the trust for issue and the remainder to strangers, would not prevent the exemption.

However a trust for issue of the marriage or civil partnership for some limited interest does not satisfy IHTA84/S22(4)(b). Such a trust does not vest the property indefeasibly. The persons becoming entitled do so on the determination and not the failure of the trust.

‘A power of appointment to a person’ within IHTA84/S22(4)(a) or (c) means a power (to any appointor) to appoint to an appointee who is within paragraph (a) or (c).