Inheritance Tax Act 1984 section 53

Exceptions from charge under section 52

Section 53 sets out the circumstances in which the inheritance tax charge that normally arises when an interest in possession in settled property comes to an end (under section 52) does not apply.

• No charge arises where the settled property is excluded property, or where a pre-22 March 2006 interest ends and the property is held in a trust for bereaved minors or an age 18-to-25 trust.
• No charge arises where the person whose interest ends simultaneously becomes entitled to the property outright or to a new qualifying interest in possession (limited from 12 March 2008 to disabled person's interests or transitional serial interests).
• No charge arises where the interest ends during the settlor's lifetime and the property reverts to the settlor, or where the settlor's spouse, civil partner or (within two years of the settlor's death) surviving spouse or civil partner becomes entitled and is a long-term UK resident.
• The reversion-to-settlor and spouse/civil partner exemptions are denied where the relevant person acquired a reversionary interest for money or money's worth, or where the exemption depends on a reversionary interest transferred into the settlement on or after 10 March 1981.