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HMRC internal manual

Inheritance Tax Manual

Special trusts: compensation funds

Property held in a compensation fund maintained by a trade or professional association is wholly exempt if

  • it is maintained or administered by a representative association of persons carrying on a trade or profession, and
  • the only or main objects of which are compensation for or relief of losses or hardship that, through the default or alleged default of persons carrying on the trade or profession or of their agents or servants, are incurred or likely to be incurred by others. IHTA84/S58 (1)(e) & (3)