Settled property: Bankruptcy
The vesting of a bankrupt’s estate in his Trustee in Bankruptcy (in Scotland his Judicial Factor) is not a disposition of any interest in possession in settled property, nor does it bring the interest in possession to an end.
It is considered that the beneficiary remains beneficially entitled to the interest for the purposes of the settled property legislation in IHTA84/PartIII Chapters I and II.
If the Trustee disposes of or terminates the interest, a claim to tax will arise under IHTA84/S51 or IHTA84/S52, with the bankrupt person being treated as the deemed transferor in the normal way.
On the bankrupt’s death while the interest in possession subsists, a claim will arise under IHTA84/S4 with IHTA84/S49 (1) in the normal way.