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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Proper liferents (Scotland): introduction

The original view was that a proper liferenter was beneficially entitled to the property which was the subject of the liferent and that a proper liferent was a “settlement” within the meaning of the FA75/SCH5 Para 1 with the result that the liferenter fell to be treated as beneficially entitled to the settled property.

However the Board were advised that a proper liferenter was beneficially entitled only to his right to the liferent and not to the property itself so that on the death of a proper liferenter the liferenter was beneficially entitled to the liferent and not to the capital in which it subsisted. It follows that on the death of the liferenter the value to be placed on the proper liferent was nil.