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HMRC internal manual

Inheritance Tax Manual

Employee benefit trusts: sub-trusts: ten-year charges and exit charges

The ten-year charge arises ten years after the property first became settled on employee benefit trusts. To reflect the fact that property in sub-trusts may not have been ‘relevant property’ for the full ten years, the relief from the ten-year charge, IHTA84/S64 (IHTM42081) and the exit charge IHTA84/S65 (IHTM42110) is given in the normal way. It reduces the rate of tax charged to reflect the number of full calendar quarters during the ten year period whilst the property was excluded from those charges by IHTA84/S58(1)(b) and was not relevant property.