The settlement: property moving from one trust to another
When property is transferred from one trust to another, it is treated as remaining in the first trust for the purposes of the regime set out for related property trusts in Chapter III, Part III. IHTA84/S81
TYA charges (IHTM42081) arise on the property on the ten year anniversary of the commencement of the original settlement. This ensures that all of the originally settled property can have the benefit of only one IHT threshold.
The transfer of property from one relevant property trust to another does not incur an exit charge unless the ‘new’ trust is a special trust or the powers of the new trust mean that the assets transferred are no longer relevant property. See IHTM42801 for special trusts.