Inheritance Tax Act 1984 section Schedule 4 paragraphs 2-4

Conditions

Section Schedule 4 paragraphs 2 to 4 set out the conditions that must be met before the Treasury can give a direction for maintenance fund exemption, including requirements for the trust terms, the nature of the property, the identity and residence of the trustees, the permitted uses of trust property and income, and the definition of qualifying property and qualifying charities.

• The Treasury must be satisfied that the trust terms meet specified requirements and that the property is of a suitable character and amount for the trust's purposes; the trustees must be Treasury-approved, include a professional (such as a trust corporation, solicitor, accountant or other approved professional), and be resident in the United Kingdom.
• During the first six years, trust property may only be used for maintenance, repair, preservation or public access of qualifying property, for reasonable improvements, or for trust expenses; any income not so applied must go to a national-purposes body or qualifying charity, and on leaving the trust the property must pass to such a body or charity.
• Property is qualifying property if it has been designated under the conditional exemption provisions, the required undertaking has been given, and no tax charge has arisen since the last undertaking was given; qualifying charities are those existing wholly or mainly to maintain, repair or preserve for the public benefit historic buildings, scenic or scientific land, or objects of national, scientific, historic or artistic interest.
• Where property has moved from a previous maintenance fund settlement to a current one without triggering a tax charge, the six-year restriction period does not restart but instead runs from when the property first entered the original settlement, ensuring continuity of the restrictions across successive settlements.