Inheritance Tax Act 1984 section 50

Interests in part, etc.

Section 50 deals with how to determine the value of a beneficiary's interest for inheritance tax purposes when they are entitled to only part of the income, a fixed amount of income, or the use and enjoyment of settled property rather than the whole.

• Where a beneficiary is entitled to only a proportion of the income from settled property, their taxable interest is taken to be the same proportion of the underlying capital
• Where the beneficiary receives a fixed amount of income, their interest is the portion of the capital that produces that amount, subject to Treasury-prescribed upper and lower rate limits
• Where a beneficiary has no income entitlement but shares the use and enjoyment of the property with others, their interest is the fraction of the property corresponding to the annual value of their share relative to the total annual value of all interests
• Where a lease is treated as a settlement, the lessee's interest is the value of the whole property minus the proportion representing the lessor's interest

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