Proportionate charges: excluded periods
Proportionate charges can arise at any time during the life of the trust except thatunder IHTA84/S65 (4), no proportionate charge arises if the exit event occurs in the firstquarter following
- the day the settlement commenced, or
- the date of a ten year anniversary.
In these two periods, any exits are free of inheritance tax. However, there is nochargeable event for inheritance tax, so the trustees will not be able to claim CapitalGains Tax holdover relief under TCGA92/S260. (CG66883)
See Frankland v IRC  STC 735.
New will trusts - S144
IHTA84/S144 allows trustees to distribute from a will trust within two years of thedeath without a proportionate charge arising. (IHTM35181)
Again, there is no chargeable event, and so holdover relief does not apply to the transferfor CGT purposes.