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In the third part of a series of notes on the inheritance tax (IHT) treatment of trusts after Finance Act 2006, Matthew Hutton MA, CTA (fellow), AIIT, TEP considers Will Trusts, and particularly immediate post-death interests (IPDIs),trusts for children, alterations of dispositons on death, excluded property settlements, and consequential IHT amendments.    

Matthew Hutton

Will Trusts: Immediate Post-Death Interests and Trusts for Children

Immediate Post-Death Interests

The main respect in which the savagery of the initial Schedule 20 appearing in Finance (No 2) Bill 2006 was cut down was in the definition of IPDIs under IHTA 1984, s 49A.  This Note does not seek to go over the old ground.  Suffice it to say that practically every life interest under a Will where the death occurs on or after 22 March 2006 will be an IPDI and thus will be treated under s 49(1) as if the life tenant were beneficially entitled.  The four conditions are as follows:

1. The settlement was made by Will or under the intestacy rules.
2. The beneficiary L became beneficially entitled to the interest in possession on the death of the testator or intestate.
3. The property is not a bereaved minors trust nor a disabled person’s interest.
4. Condition 3 has been satisfied at all times since L became beneficially entitled.

Example

A husband (dying on or after 22 March 2006) leaves, after various legacies and bequests, residue on a life interest trust, split as to two thirds to his wife and one third to his daughter.  Each of the two interests in residue is an IPDI, that for the widow qualifying for the spouse exemption and that for the daughter attracting any remaining balance of the nil-rate band (along with non-charitable legacies and bequests).  This analysis would not be affected if the trustees had a power to terminate either or both of the IPDIs during the beneficiary’s lifetime.  If they were so to act, in favour of an individual absolutely, this would cause the beneficiary to make a PET.  If the terms of the appointment were that a successive trust interest arose, whether on discretionary or on life interest terms, that would trigger a chargeable transfer by the beneficiary and the ensuing trust would enter the relevant property regime.

Impact

Because under s 49(1) the beneficiary is treated as if the assets were comprised in the estate, the spouse exemption under s 18 will apply in an appropriate case.

What happens when the IPDI comes to an end?  If this is during the lifetime of the beneficiary, the rules described above will apply, that is there will be either a chargeable transfer or a PET, though in some cases, eg on absolute advance to the beneficiary, there will be no IHT implications.  If the property remains settled, it will generally enter the relevant property regime unless a bereaved minors trust (see below) or an age 18-to-25 trust (see below) or a disabled person’s interest arises.

If the IPDI ends on death, the value of the trust property at that time will be aggregated with the beneficiary’s free estate under general principles to calculate the IHT due.  If the property remains settled even on a successive life interest, it cannot be an IPDI because condition 2 in s 49A is not satisfied and so the assets will enter the relevant property regime, unless there is a bereaved minors trust or a disabled person’s interest.

Creating a Non-IPDI for a Surviving Spouse

Suppose that a testator, being, prospectively, the first spouse to die, wants to constitute a chargeable transfer of the balance of his nil-rate band at death by a trust to his surviving spouse.  That would have been easy enough to achieve as a non-IPDI under the originally restricted version of that regime which appeared in Finance (No 2) Bill 2006.  But the broadening of the definition in s 49A makes it more difficult.  In particular, when combined with the amendments to s144, this means that two suggestions made over the Summer will not work.  These were:

(a) an appointment out of a discretionary Will trust in favour of the surviving spouse within three months of death; and

(b) a life interest for a surviving spouse conditional on survivorship for seven months or more (thus outside the express terms of IHTA 1984, s 92).

The only structures which would seem to achieve the objective are: (i) to have an appointment in favour of a surviving spouse out of a discretionary Will trust at least two years after death (so triggering an exit charge, based on 8 out of 40 quarters), thus expressly outside the protection of s 144; or (ii), alternatively, if one wants to proceed more swiftly than that, an appointment say four months after death which creates a discretionary trust for one more month (ie in total five months from death) followed by an interest in possession for the surviving spouse; note that, to avoid an IPDI under s 144(4)(a) it is essential that the discretionary period continues beyond the date of the appointment. 

However, why might one want to achieve such a result?  It could be quite convenient to provide a trust over the deceased’s share of the matrimonial home, so avoiding any possible SP 10/79 issues (though now pretty much ‘dead in the water’) and the like, even though perhaps generally, following the 2005 Special Commissioner’s decision in Judge and Judge (Walden’s personal representatives) v HMRC [2005] SSCD 15 (SpC 506), less of a concern.  Indeed, a greater potential concern is the CGT analysis on disposal of the house by typically the surviving spouse and the Will trustees as joint owners, when the application of the Trusts of Land and Appointment of Trustees Act 1996, s 12 might preclude the availability of main residence relief under TCGA 1992 s 225 for the trustees.  HMRC’s views on this suggestion are unknown, but the concern seems to be a real one (though professional opinion is divided);  so it may in appropriate cases be advisable to avoid such a structure, in favour of for example the debt or charge scheme.  

Bereaved Minors Trusts

Para 1 of FA 2006 Sch 20 introduces into IHTA 1984 new s 71A to 71H all of which generally deal with, broadly, Will trusts for bereaved minors.

(a)  Section 71A trusts for bereaved minors

These are trusts which arise under the intestacy rules or under the Will of a deceased parent of the bereaved minor or under the Criminal Injuries Compensation Scheme.  ‘Bereaved minor’ is defined by s71C as one who has not yet attained the age of 18 at least one of whose parents has died.  Section 71H confirms that ‘parent’ includes step-parent and a person having legal parental responsibility. Under the trust:

(a) on or before age 18 the bereaved minor must become entitled to the capital, income and any accumulated income;
(b) while under the age of 18, any settled property which is applied must be applied for the benefit of the bereaved minor;
(c) while the bereaved minor is under the age of 18, either he is entitled to all of the income arising or no such income may be applied for anyone else’s benefit. 

The fact that the trustees have a statutory power of advancement under Trustee Act 1925, s 32 (either in its original form or in its typically extended form or under the equivalent Northern Ireland legislation) does not affect the qualification of the trust. 

Example

Amending the above Example, the one third share in residue is left to such of the husband’s children as shall attain the age of 18 years and if more than one in equal shares absolutely.  When the husband dies, his son is aged 16 and his daughter 13.  This should be a qualifying bereaved minors trust, given that the Will provides that while a child is alive and under the age of 18 any income from his/her prospective share is paid to that child alone.  If the daughter dies at say 17, the capital, then being paid to the son at age 20, would not have been the subject of an absolute gift at age 18.  Subject to confirmation from HMRC, however, the gift should still have satisfied s 71A, by analogy with traditional Inland Revenue practice on s 71 accumulation and maintenance trusts: the assumption is made that a beneficiary will reach the specified age.  And IHTA 1984 s 71B(2)(b) ensures that no IHT will be payable on the daughter’s death.

(b)  Section 71B charge to tax on property to which s 71A applies

There is, corresponding to the existing charge to IHT when property ceases to satisfy the A & M conditions, an IHT charge where property ceases to be subject to s 71A or where trustees make a disposition as a result of which the value of the property is reduced.  But this charge does not arise where the bereaved minor attains the age of 18, becomes absolutely entitled under that age, dies under that age or capital is applied for his advancement or benefit.  Otherwise the rules in IHTA 1984 s70 (property leaving temporary chargeable trusts) will apply, under which there is a rate of IHT applied which is increased successively according to the number of complete successive quarters which have elapsed. 

Section 71D age 18-to-25 trusts

These might be described as an ‘add-on’ to the bereaved minors trust regime, introduced at Committee Stage of F (No 2) B 2006 in response to the ‘complaint’ that, notwithstanding the Government’s assertion that if a person at age 18 was old enough to vote, give his life for his country or even become entitled to his child trust fund, then he ought to become absolutely entitled to trust capital!

(a) Conditions

The conditions for such a trust to arise are that:

(i) the beneficiary (B) will on or before attaining the age of 25 become entitled to the capital, income and any accumulated income;
(ii) while under the age of 25, any settled property which is applied for the benefit of the beneficiary is applied for B; and
(iii) while B is under the age of 25, any income arising is applied for B’s benefit and for that of no-one else.

Provisions relating to the statutory power of advancement are introduced as for bereaved minors trusts.  Note that the customary gift-over for the children of a child who fails to attain an absolute entitlement will not prevent these being s 71D trusts (HMRC’s Response to Question 22): in that event there would presumably be a s 71E exit charge on the grandchildrens’ trusts arising.  A s 71D trust can arise not only under a Will, but also by way of adaptation (if necessary) of an A&M trust in being at 22 March 2006.

Example

Developing the prevous Example, suppose that the husband’s Will were written so that a one third share in residue was to be held for such of his children as were living at the date of his death and if age 25 or older absolutely, but if under the age of 25, on the following trusts:  income from the share may be accumulated until the later of the expiry of 21 years from the date of the father’s death and the beneficiary’s attaining age 18 or it may be paid out to the beneficiary (but to no-one else); income arising thereafter before the child attains the age of 25 is to be paid out and on attaining the age of 25 capital together with any accumulations of income is paid to him absolutely.  That would amount to a qualifying ‘age 18-to-25 trust’, so that the capital underlying a presumptive share would not enter the special charging regime until such time as the child attained the age of 18.  If the beneficiary dies before attaining the age of 18, IHTA 1984, s 71E(2)(b) precludes a charge to IHT.  Should he die between ages 18 and 25, the terms of the Will would dictate what then happened to the capital.  Most likely, the failed prospective share would fall to be divided among the deceased’s siblings, whether under or over the age of 25 (if not to pass to surviving grandchildren: see above).  If (or to the extent that) the former, the s 71D trusts would continue; if (or to the extent that) the latter, there would be an exit charge calculated under s 71F. 

Note that Wills drawn pre-Budget Day 2006 will not satisfy the strict conditions for an age 18-to-25 trust if there is an ability to vary shares as between beneficiaries, given the very strict statutory requirement that a share in capital must be held for a particular beneficiary.  It may be possible to use IHTA 1984 s144 to rectify any drafting.  However, a gift ‘to such of my children as shall attain the age of 25 and if more than one in equal shares absolutely’ will be a qualifying age 18-to-25 trust (see HMRC Response to Question 21). 

(b) Section 71E charge to tax on property to which s 71D applies

There is a charge to IHT when trust property ceases to fall within s 71D other than on:

(i) the beneficiary becoming absolutely entitled at or under the age of 18;

(ii) the beneficiary dying under that age or the property becoming subject to a bereaved minors trust under s71A; or

(iii) capital being paid out or advanced to the beneficiary at or under the age of 18.  Nor will there be a charge to tax if either of the exemptions under s10 (dispositions not intended to confer gratuitous benefit) or s16 (grant of tenancies of agricultural property) applies. 

The way in which tax charged under s 71E is calculated is found under s 71F or s 71G.  The ‘certain cases’ governed by s 71E might be described as the ‘normal case’.  That is, the amount of the tax given by ‘chargeable amount x relevant fraction x settlement rate’ (s 71F(3)).  The ‘chargeable amount’ is the value which leaves the settlement, subject to business or agricultural property relief (see Example 6 at 5.6 above).  The chargeable amount would also include any accumulated income (bearing in mind the provisions of Statement of Practice 8/86 that undistributed and unaccumulated income should not be treated as a taxable trust asset).  The ‘relevant fraction’ is 3/10s by multiplied by as many 40ths as complete successive quarters have elapsed since B attained the age of 18 or, if later, the day on which s 71D first applies [which could of course be 6 April 2008].  The ‘settlement rate’ is found in a way familiar from calculation of the exit charge under s 69.  That is, tax is charged at lifetime rates on a deemed chargeable transfer made by a transferor with a chargeable gifts history equal to that of the settlor in the seven years before the settlement commenced, where the value transferred is the aggregate of the value of the property initially comprised in the settlement plus the value of any related settlement plus the value of any property transferred to the settlement after commencement (but before the s 71E charge).

Because property in a s71D trust is excluded from the definition of ‘relevant property’, there cannot be a ten-year anniversary charge under s 64 at a time between the beneficiary’s reaching 18 and his becoming 25.

Example

Hamish died on 1 January 1999, leaving £100,000 on A&M trusts to his children.  Under the terms of the settlement there was a direction to accumulate income for 21 years with children becoming entitled to income at age 18 and capital deferred broadly until grandchildren attained 18, with wide powers of advancement of capital before that age.  Hamish had two sons, Christopher and Daniel.  Christopher becomes 18 on 1 January 2009.  Before 6 April 2008 the terms of the trust are changed to become compliant with s 71D.

In the seven years before he died Hamish had cumulative chargeable transfers of £15,000 and there were no related settlements.  The trust assets are now worth £500,000.  When Christopher becomes 25 on 1 January 2016 when, let us suppose, the fund is worth £1m and the rates of tax are as in 2006/07 but with a nil-rate band of £600,000, the calculation under s 71F of the s7 1E exit charge proceeds as follows:

The tax is: Chargeable Amount x Relevant Fraction x Settlement Rate (s 71F(3)).  The ‘chargeable amount’ is £500,000 (assuming that any tax is paid out of it and not out of any property remaining subject to s 71D trusts, in which case there would be grossing up (s 71F(4)).  The ‘relevant fraction’ is 3/10 x 28/40 (the number of complete successive quarters in the period, viz 0.21 (s 71F(5)).  The ‘settlement rate’ is the effective rate found under s 71F(7)-(9) as follows:

Therefore the settlement rate is 0%.

So, in this case, the IHT is £500,000 x 0.21 x 0.

The same will be true on Daniel’s inheritance two years later.

The ‘all other cases’ envisaged by s 71G seem to correspond to the s 70 ‘property leaving temporary charitable trusts’ regime for A & M trusts.

In summary, if the total of the following four items does not exceed the nil-rate band threshold at the date of exit, the rate is zero:

(a) settlor’s cumulative chargeable transfers in preceding seven years   (s 71F(8)(b));
(b) initial gross value of the settlement;
(c) initial gross value of any related settlements; and
(d) gross value of any additions to the settlement (s 71F(9)(c)).

Will Trusts: Amendments to s 144 Alteration of Dispositions Taking  Effect on Death

Section 144 precludes the application of the exit charge under the relevant property regime in the case where at least three months, but within two years, after death an appointment is made out of a discretionary Will trust (whether of residue or within the nil-rate band) so as to read the terms of the appointment, whether absolute or settled, back into the Will.  One of the conditions is that no interest in possession must have arisen in the trust property before the appointment (referred to in s 144 as ‘an event’).

Where the death occurs on or after 22 March 2006, the reference to no preceding interest in possession is to be taken as to no IPDI or disabled person’s interest.  And new subsections (3), (4) and (5) ensure that, whether a person dies on or after, or indeed before, 22 March 2006, the relieving provisions of s144 are still applied, but the statutory treatment varies according to when the death occurred.  If before 22 March 2006 and the Will provides a discretionary trust and (a) the appointment results in either an IPDI or a bereaved minors trust or an age 18-to-25 trust and (b) no IPDI and no disabled person’s interest existed before the appointment (and there was no other interest in possession between the date of death and 22 March 2006), there is no exit charge.  Where the death occurs on or after 22 March 2006 and before an IPDI or a disabled person’s interest arises, an appointment is made which creates trusts which under the Will would have been either an IPDI, a bereaved minors trust or an 18-25 trust, there is no exit charge.  This result, whenever the death occurs, would seem also to arise if there is no actual appointment made by the trustees but the Will itself provides for such an IPDI, a bereaved minors trust or an age 18-to-25 trust: that is, within the language of s 144 the Will provides for a relevant property trust and within two years after the death there occurs an event which would otherwise trigger an exit charge (for example, an age 18-to-25 trust arising). 

It remains open of course for an appointment to create an absolute interest in the deceased’s assets which, as before Budget Day 2006, will avoid an exit charge under s144(1).  This assumes that the appointment is made at least three months after (to avoid the trap in Frankland v CIR CA [1997] STC 1450) and within two years after the death: the same point applies to an appointment on either a disabled person’s trust or charitable trusts.  However, if the appointment creates a settled interest as an IPDI for a surviving spouse, it looks as though new s 144(3)(c) puts paid to the Frankland trap, in that the appointment can ‘safely’ be made within the three month period.  See above.

Excluded Property Settlements

No amendments are made by Sch 20 to the provisions of IHTA 1984 s 48(3)(a).  Trust property situated outside the UK comprised within a settlement made by someone both actually domiciled outside the UK and not deemed domiciled in the UK is excluded property.  There has been some debate as to whether HMRC Inheritance Tax still accept in principle that, in a case where the settlor is a beneficiary and dies at a time when he has become actually or deemed UK domiciled the excluded property provisions ‘outflank’ the reservation of benefit provisions.  However, HMRC Inheritance Tax have recently confirmed that, for the time being at least, they still accept that principle.

Do remember the danger that if the settlor is excluded from benefit, there is a notional PET under FA 1986 s 102(4), ie the settlor is on risk for the following seven years.

Knock-On Effect of the New Regime for Trusts and s 80

The rule in s 80 (see below) has always presented something of a potential danger for foreign domiciliaries in circumstances where they or their spouses as beneficiaries of the settlement might become UK domiciled, if under the settlement a discretionary trust follows an interest in possession trust.  If at the time of the discretionary trust arising, the immediately preceding life tenant has become UK domiciled (whether actually or deemed), a new discretionary trust will be treated as coming into being without the protection of the excluded property provisions.  For this reason it has been accepted wisdom either to have a discretionary trust throughout or interests in possession throughout (or indeed discretionary followed by interests in possession), but NEVER interest in possession followed by discretionary, UNLESS it was absolutely certain that neither settlor nor spouse as successor beneficiary would ever become actually or deemed UK domiciled.

But of course things are now a bit more difficult.  Subject to the rules for TSIs, an interest in possession arising under a settlement will be ‘relevant property’ even if interest in possession in form.  For settlements made now therefore, s 80 will not present a problem whatever the structure of beneficial interests.  But consider an excluded property settlement made say in 1990 under which the settlor, now dead, took an immediate interest in possession.  That was followed by an interest in possession to his wife on 1 January 2003.  Under the trust there is a successive interest in possession to the settlor’s two daughters when the wife dies.  If this occurs after 5 April 2008 the trust fund will be clawed into the IHT net as relevant property.  Other things being equal, the trustees should prior to 6 April 2008 replace the widow’s interest with an interest for the two children qualifying as a TSI.  When the children’s interest comes to an end the point will not be a problem because neither of the settlor or spouse is within s 80.

Example

Igor, when domiciled in the Ukraine, made a settlement in January 1990.  The trustee was a Jersey trust corporation and the settlement was written under Jersey law.  The terms of the trust gave Igor an initial interest in possession, subject to which his wife Tatiana was to enjoy an interest in possession and on her death successive interests would arise first for their children in equal shares and then on their deaths capital would be advanced outright to Igor’s grandchildren at 25.  Both Igor and Tatiana have set up home in London and in the ordinary course of things can expect to become deemed UK domiciled after 17 continuous years’ residence under IHTA 1984, s 257 (if not actually UK domiciled before that time).

Assuming that Igor dies after 5 April 2008 and his wife Tatiana becomes beneficially entitled on his death, her interest will be a TSI under IHTA 1984, s 49D and will therefore continue to attract s 49(1) treatment under IHTA 1984, s 49(1A)(c), so that, so long as the trust fund remains situated outside the UK, it will continue to be excluded property under IHTA 1984, s 48(3). 

However, when Tatiana dies and is then UK actually or deemed domiciled, the effect of s 80 will be, for the purposes of IHT on trusts, to treat Tatiana as making a new settlement under which she, then deemed UK domiciled, is the settlor, which could be quite expensive in IHT terms as outside the protection of excluded property. 

The answer may be, as suggested above, for the trustees to convert the present interest in possession structure to a discretionary structure, which should have no UK income tax impact as the trustees are non-UK resident, so prospectively ‘defusing’ the ‘IHT time bomb’ which lies ahead.  The only qualification to this advice touches on the pre-owned assets (POA) regime to the extent that within the settlement there might be a UK property occupied by Igor and Tatiana with the benefit of a loan from another trust which is an ‘excluded liability’ for purposes of FA 2004, Sch 15 para 11(2).  This is not the place to develop that subject, though generally, to avoid a POA charge (prior to 22 March 2006, at least) a trust structure should have been interest in possession rather than discretionary.  Now, of course, there is no difference – and so the POA problem persists.

The other statutory provisions to watch in such circumstances are TA 1988, s 739 and s 740 (transfer of assets abroad) especially in the light of the new s 741A motive test introduced from 5 December 2005.

Consequential Amendments to the Scheme of IHT

Background

In applying IHT to settlements, the key distinction has always been between trusts subject to the ‘relevant property’ regime, generally called discretionary trusts, and either (i) life interest trusts under which by s49(1) the underlying property is treated as part of the life tenant’s estate or (ii) A & M trusts which while the s 71 conditions are satisfied are excluded from the relevant property regime.  That distinction remains in principle, though it will become gradually less important as time goes by:

(a) The A & M regime will cease to exist on 6 April 2008 (and no new A&M trusts can be made after 21 March 2006), except in effect insofar as the age of capital entitlement is 18: FA 2006, Sch 20 para 3.

(b) The s49 regime is preserved on a transitional basis, though it will be many years hence before it disappears completely (indeed, if ever, thinking of disabled person’s trusts) for lifetime trusts in being at 22 March 2006.  And, of course, the s49 regime is preserved in any event: (i) by the concept of the IPDI; and
(ii) for disabled trusts.

(c) More and more trusts will gradually enter the ‘relevant property’ regime, specifically numbers of old A & M trusts from, if not before, 6 April 2008, although the ongoing impact may be limited because of the availability of the nil-rate band (as determined in each case) and of course any new non-charitable lifetime trusts made on or after 22 March 2006. 

Restriction of ‘Qualifying Interest in Possession’

Amendments to s 59 of IHTA 1984 ensure that a qualifying interest in possession is now one to which either the beneficiary was entitled at 22 March 2006 or, if he became entitled to it on or after that date, which is an IPDI, a disabled person’s interest or a TSI or (as before) an interest to which a company is beneficially entitled under s 59(2), subject, however, to qualification to reflect the new regime. 

Similarly, by amendments to IHTA 1984, s 72, certain employee trusts and newspaper trusts fall outside the definition of ‘qualifying interest in possession’ and into relevant property to the extent that: 

(a) there is an interest in possession to which an individual became entitled on or after 22 March 2006 which is not an IPDI, a disabled person’s interest or a TSI;  or
(b) a company is beneficially entitled to the interest in possession, the company’s business consists wholly or mainly in acquiring interests in settled property and it has acquired the interest for full consideration in money or money’s worth from the beneficiary on or after 22 March 2006 and that interest was neither an IPDI nor a TSI.

Close Companies’ Interests in Settled Property

There is an amendment to s 100 (alterations of capital etc, where participators are trustees), so that the provision applies only if the interest in possession arising on or after 22 March 2006 is an IPDI, a disabled person’s interest or a TSI. 

The rule in s 101 is that the participators in a close company are treated as entitled to an interest in possession owned by a close company according to their respective rights and interests.  This is amended, in the case of an interest to which an individual became beneficially entitled on or after 22 March 2006, so as to be restricted to an IPDI or a TSI. 

Protective Trusts

The rule in s 88 is that where under a protective trust discretionary trusts replace an interest in possession because the principal beneficiary has become bankrupt or has attempted to alienate his interest, the interest in possession is treated as continuing for IHT purposes.  New sections added to s88 apply as follows:

(a) Where a protective trust was made before 22 March 2006 and the trusts fail or determine on or after that date, the principal beneficiary is treated as if he were entitled to that interest in possession before 22 March 2006.

(b) Where the protective trust is made on or after 22 March 2006 and the principal beneficiary has either an IPDI, a disabled person’s interest or (though it is hard to envisage quite how) a TSI which fails or determines, the principal beneficiary is treated as if he continued to be entitled to that IPDI, disabled person’s interest or TSI for IHT purposes.

(c) The s 88 principle is displaced in the case of a protective trust made on or after 22 March 2006 where the principal beneficiary does not have either an IPDI, a disabled person’s interest or a TSI. 

Of course, it would always be possible to establish a protective trust now, that is, one falling within Trustee Act 1925, s 33, albeit as an immediately chargeable transfer.

The s 80 Rule: Initial Interest of Settlor or Spouse

Section 80 postpones, for purposes of the relevant property regime, the entry of settled property into that regime where either the settlor or his spouse has an interest in possession immediately after the settlement commences.  As and when trusts arise under which neither settlor nor spouse has an interest in possession, the trust property is treated at that point as comprised in a separate settlement made by the settlor or spouse who last had an interest in possession.  This has implications both for Will trusts (though nothing new following FA 2006) and (see above) excluded property trusts. 

Section 80 is amended so that, where the settlement is made on or after 22 March 2006, the rule will operate only if the settlor or spouse has either an IPDI or a disabled person’s interest (called a ‘postponing interest’): FA 2006, Sch 20 para 23, REPLACE ing s 80(4) into IHTA 1984.

NOTE: While I have taken every care in writing this Summary Note to reflect the provisions of FA 2006 Schedule 20 and to analyse those provisions in the Worked Examples, I can accept no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material in this Note.  Specialist advice should be taken as necessary in all cases.

Inheritance Tax 2007/08: Practical Solutions

New Connaught Rooms, London WC2

Wednesday 20th June 2007

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Inheritance Tax Mitigation continues to be at the forefront of the priorities of many individuals and families. And, especially following the FA 2006 'Alignment of IHT for Trusts', the issues do not get any easier. At least Budget 2007 has given us all some respite from last year’s pace of change.  This full-day Conference has been designed to give an up-to-date and cutting edge analysis of the options open to your clients and the practical steps they should take - or indeed avoid. To this end Matthew Hutton has assembled a first class panel of Speakers. This Conference is designed as a prelude to Matthew’s more general Estate Planning Conferences to be held (this year, only) in the Autumn.

• Business Property Relief - John Tallon QC, Pump Court Tax Chambers

• Trusts - Chris Jarman, Thirteen Old Square

• The Family Home - Nick Hughes, Director of Estate Planning & Trusts,     
           Chiltern plc

• Agricultural Property Relief- Adrian Baird, Chief Taxation Adviser, CLA

• The Use of Insurance Products in IHT Mitigation - Penny Bates, Partner, Menzies & Co

• Wills and Post-Death Arrangements - Matthew Hutton, Chartered Tax Adviser

Matthew Hutton Conferences 2007

On 20 June Matthew has organised an all-day Conference in London on Inheritance Tax Planning 2007/08 at which the Speakers will be John Tallon QC (Pump Court Tax Chambers), Chris Jarman (Thirteen Old Square), Nick Hughes (Director of Estate Planning & Trusts, Chiltern plc), Adrian Baird (Chief Taxation Adviser CLA), Penny Bates (Partner, Menzies & Co) and Matthew himself.

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The subject matter has yet to be finalised, although brochures will be available in June.  The cost is £295 plus VAT per delegate or for those who have attended a previous Matthew Hutton Estate Planning Conference £270 plus VAT per delegate.

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