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The Inheritance Tax (Delivery of Accounts) (Excepted Settlements) Regulations 2008

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Excepted settlement

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4.—(1) An excepted settlement means a settlement in which no qualifying interest in possession subsists on an occasion of a chargeable event on or after 6th April 2007 in the circumstances in paragraph (2) or (3).

(2) The circumstances are that—

(a)throughout the existence of the settlement, cash is the only property comprised in the settlement;

(b)after making the settlement, the settlor provided no further property which became comprised in the settlement;

(c)the trustees of the settlement are resident in the United Kingdom throughout the existence of the settlement;

(d)the gross value of the settled property throughout the existence of the settlement does not exceed £1,000; and

(e)there are no related settlements.

(3) The circumstances are that—

(a)the settlor is domiciled in the United Kingdom at the time the settlement was made and throughout the existence of the settlement until either the chargeable event or the death of the settlor, whichever is earlier;

(b)the trustees of the settlement are resident in the United Kingdom throughout the existence of the settlement;

(c)there are no related settlements; and

(d)the relevant condition contained in paragraph (4), (6), (7) or (8) is met.

(4) On the occasion of a chargeable event under section 64, the condition is that the value transferred by a chargeable transfer of the description specified in section 66(3) does not exceed 80% of the IHT threshold.

(5) Where, in reliance on these Regulations, no person was required to deliver an account under section 216 of the property comprised in the settlement on an occasion of a chargeable event under section 65 in respect of the settlement in the ten years before the chargeable event in paragraph (4), the amounts on which any charges to tax were imposed under section 65 shall, for the purpose of determining the value transferred by a chargeable transfer of the description specified in section 66(3), be without deduction for liabilities or reliefs contained in the 1984 Act.

(6) On the occasion of a chargeable event under section 65 preceding the first ten-year anniversary after the settlement’s commencement, the condition is that the value transferred by a chargeable transfer of the description specified in section 68(4) does not exceed 80% of the IHT threshold.

(7) On the occasion of a chargeable event under section 65 following one or more ten-year anniversaries after the settlement’s commencement, the condition is that the value transferred by a chargeable transfer of the description specified in section 66(3), taking into account section 69, does not exceed 80% of the IHT threshold.

(8) On the occasion of a chargeable event under section 71E by reason of the happening of an event within section 71F(2), the condition is that the value transferred by a chargeable transfer of the description specified in section 71F(8) does not exceed 80% of the IHT threshold.

(9) For the purposes of this regulation—

(a)trustees of a settlement shall be regarded as resident in the United Kingdom if the general administration of the settlement is ordinarily carried on in the United Kingdom and the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are for the time being resident in the United Kingdom; and

(b)in determining value for the purposes of paragraph (4), (6), (7) or (8) disregard any liabilities or reliefs contained in the 1984 Act.

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