Inheritance Tax Act 1984 section 43

Settlement and related expressions

Section 43 defines what counts as a "settlement" for inheritance tax purposes and identifies when property is treated as "settled property."

• A settlement is any disposition of property — whether by legal document, spoken word, or operation of law — where property is held in trust for successive beneficiaries, subject to a contingency, held with powers to accumulate income or distribute it at discretion, or charged with annuity or periodical payments for a life or limited period
• A lease granted for life, lives, or a period linked to a death is treated as a settlement unless it was granted for full market value consideration; a lease due to increase to a higher rent is treated as terminating at that point
• In Scotland, the definition of settlement extends to entails, deeds charging annuities on property, and deeds creating or reserving a proper liferent over heritable or moveable property
• In Northern Ireland, references to property held in trust include property standing limited to persons, but leases in perpetuity under the Renewable Leasehold Conversion Act 1849 are excluded