Pre-owned assets: specific avoidance schemes: intangibles - settlement on interest in possession trusts
Intangible property may also be settled using an Eversden scheme (IHTM44101), where the chargeable person settles cash on interest in possession trusts for their spouse or civil partner, which the trustees then invest in, say, a bond. If the terms of the settlement fall within the definition in FA04/Sch15/Para8 (IHTM44025) similar results to the scheme involving land apply.
For example, if the spouse or civil partner’s interest in possession ends during their lifetime and the property is now held on discretionary trusts of which the settlor is one of the potential beneficiaries, the POA charge will apply where the settlement was effected before 20 June 2003.
However, the excluded transaction provisions (IHTM44030) have no application with regard to intangible property so FA04/Sch15/Para10(1)(c), which may have a bearing in respect of schemes involving land, has no relevance.
If the settlement was effected on or after 20 June 2003 the property is subject to a reservation of benefit by virtue of FA86/S102(5A) and the POA charge will not apply.