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HMRC internal manual

Inheritance Tax Manual

Foreign property: discretionary trusts and exempt securities: exception for certain settled reversions

The IHTA84/S48 (6) anti-avoidance rules do not apply to property moving between settlements where:

  • someone was entitled to a reversionary interest in the property expectant on when a qualifying interest in possession under the first (or original) settlement came to an end, and
  • before 10 December 1981, they settled that reversionary interest on the trusts of the second/new settlement

or where:

  • property held in a settlement moved into a sub-settlement before 20 April 1978 - for example. where property in the first settlement was appointed by its trustees on the trusts of another settlement, which is a sub-settlement in relation to the appointed property. In these cases Compliance will need to consider whether any exempt securities held in the sub-settlement are excluded, in the light of the decision in Minden Trust (Cayman) Ltd v IRC [1985] STC 758.

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