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IHT and Trusts 1. - Coggle Diagram
IHT and Trusts 1.
Always PET
Bare Trust
trust fund
IHT on beneficiary
if the settlor dies w/in 7 years
taper relief available after 3 years
Disabled Trust
even if discretionary
taxable if settlor dies w/in 7 years
no exit or periodic charge
Pre 22 March 2006 IPP
taxable if settlor died in 7 years
trustees pay tax
out of the trust fund
trust asset owned by beneficiary
taxable on their estate for IHT
with the interest in possession
now exempt from IHT
more than 7 years passed
CLT
IPP post 22 March 2006
if there is life interest
i.e. entitlement to income for life
then life tenant
has the interest in possession
charges
entry
exit
periodic
no charge
disabled trust
IPDI
created by will
or intestacy
if settlor dies w/in 7 years
can use taper relief
if beneficiary dies
no value added to estate
either discretionary
or interest in possession
transfer of value
based on loss in value to settlor's estate