Inheritance Tax Act 1984 section 159A

Treatment of dormant assets

Section 159A ensures that when a dormant asset is transferred to an authorised reclaim fund (and possibly charities), the owner's replacement rights are treated as the same asset for inheritance tax purposes, preserving the original acquisition date and characteristics.

• A dormant asset transfer occurs when an institution sends funds to an authorised reclaim fund (with or without charities) under the Dormant Bank and Building Society Accounts Act 2008 or the Dormant Assets Act 2022.
• After the transfer, any rights the asset owner acquires under the reclaim provisions are treated as identical to their original rights for inheritance tax purposes.
• The replacement rights are deemed to have been acquired at the same time and with the same characteristics as the original rights held against the institution.
• Where investment or securities assets were converted before the transfer, the original rights are those held immediately before that conversion rather than immediately before the transfer itself.