IHTM25550 - APR/BPR 100% relief allowance: settlements - overview
The amount of the 100% relief allowance available to trustees in relation to qualifying agricultural and relevant business property depends on the category of trust and the various trust charges described below.
Occasions of charge under S64/IHTA84 (10-year anniversary) or S65/IHTA84 (proportionate charge) on or after 6 April 2026
S124G/IHTA84 provides that the “100% trust relief allowance” available to the trustees for each charge is
the “trust maximum allowance” less
the total amount of 100% relief applied against proportional charges earlier in the “allowance period”.
The allowance period, in relation to either charge
begins one quarter year after either the date of the last 10-year anniversary or, if the settlement has not yet had its first anniversary, the date of commencement and
ends the day before the charge occurred (the last occasion being the following 10-year anniversary).
This mechanism ensures that, in each allowance period, the amount of relief claimed at 100% cannot exceed the maximum for that settlement. The maximum allowance then refreshes for the next period.
The amount of a trust’s maximum allowance depends on whether the settlement is, or is not, a “pre-commencement settlement”.
This distinction is important because, under the commencement provisions, the main reforms to the reliefs are postponed and do not apply to pre-commencement settlements until the first 10-year anniversary to occur after 6 April 2026.
Guidance on the maximum allowance and the other provisions relating to a pre-commencement settlement is at IHTM25510 and for other settlements at IHTM25552.
Occasions of charge under Part 3 Chapter 3/IHTA for Special Trusts (other than Age 18-25 Trusts) on or after 6 April 2026.
The broad mechanism is the same as described above, i.e. a settlement has a maximum allowance which is reduced by the amount applied against prior charges. However, there is no allowance period.
That means the maximum allowance is reduced by the 100% relief claimed on each occasion of charge until it is exhausted. In other words, the allowance does not refresh.
Guidance on the maximum allowance and the other provisions relating to special trusts is at IHTM25554.
Occasions of charge on Age 18-25 trusts under S71E/IHTA84 on or after 6 April 2026.
The mechanism is similar to 2. above but instead of one global allowance the trustees have a maximum allowance for each beneficiary of the age 18-25 trust.
Guidance on the maximum allowance and the other provisions relating to these trusts is at IHTM25555.
Chargeable transfers on property subject to Qualifying Interest in Possession trusts under S52 or S4/IHTA84 on or after 6 April 2026.
The 100% allowance for the trustees depends on the personal allowance of the current (or now deceased) beneficiary. The guidance is at IHTM25522.