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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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The settlement: related trusts

Two trusts are related under IHTA84/S62 only if

  • the settlor is the same in each case, and
  • they commenced on the same day

The trusts do not have to be discretionary to be related.

Application

Related trusts are brought into cumulation for calculating the rate of tax on discretionary trust charges. (TYA: IHTM42085, Proportionate: IHTM42114)

Charitable trusts

IHTA84/S62 (2) states that 2 trusts are not related if the property in one or both of the trusts was held for charity without limit of time.

Prior IIP interests

If IHTA84/S80 is in operation, the artificial later date applies in deciding whether trusts were made on the same day. (IHTM42231)