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HMRC internal manual

Inheritance Tax Manual

Relevant property: introduction

The term ‘relevant property’ refers to property in which no qualifying interest in possession exists. Section 59 IHTA provides a definition of those ‘qualifying interests’. Where a person becomes beneficially entitled to an interest in possession on or after 22 March 2006, this will only be a qualifying interest in possession if it is an:

  • Immediate post-death interest,
  • Disabled person’s interest, or
  • Transitional serial interest (IHTM16060)

All property settled on discretionary trusts is relevant property unless it is held on one of the ‘special trusts’ (IHTM42801), or was excluded property (IHTM42601).

The relevant property transferred on a chargeable occasion is the net value of the assets transferred at the given date of valuation. See IHTM04097

You should investigate the open market value of assets and liabilities declared on the IHT100 as at section 10 of the manual, from IHTM10685. But bear in mind the relatively low rate of tax which will be chargeable on any adjustments.

  • Reliefs and exemptions against value, such as agricultural and business reliefs, can apply to the relevant property subject to the transfer, but may be disregarded when calculating the rate of tax charge. (IHTM42165)
  • Normal rules for inheritance tax apply to debts and deductions, as governed by IHTA84/S5 (3), (4) and (5). (IHTM28000)
  • Some Capital Gains Tax and Income Tax issues are however specific to discretionary trusts, as detailed at IHTM42163.