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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Settled property: lifetime

There is a limited quick succession relief (QSR) (IHTM22041) for successive charges on settled property (IHTM16000) within the standard five year period. The requirements are

  • the second charge must be on the lifetime termination of a qualifying interest in possession (IHTM16061), and
  • the first charge must

 

  • have increased the estate of the person with that interest in possession
  • have been when, or after, the settlement was created, and
  • be determined by reference to the value of the same settled property.

The first transfer can be any of the types listed in IHTM22042, but it must have the effect of creating a qualifying interest in possession in settled property and be for the benefit of the person who is making the transfer in relation to the second charge.

There can be no QSR on the second charge if the assets are no longer settled (for example, because the person with an interest in possession has become absolutely entitled to the assets that were in the settlement).