Inheritance Tax Act 1984 section 64

Charge at ten-year anniversary

Section 64 establishes the principal inheritance tax charge that arises every ten years on relevant property held within a discretionary trust, and sets out how certain types of income and property are treated for the purposes of that charge.

• A tax charge arises on the value of relevant property in a settlement immediately before each ten-year anniversary, calculated at the rate set out in sections 66 and 67 (a maximum effective rate of 6%).
• Accumulated trust income that arose more than five years before a ten-year anniversary from relevant property in which no one held an interest in possession is itself treated as relevant property and brought into the charge.
• Where the settlor is not a long-term UK resident (or, for deaths before 6 April 2025, was not UK-domiciled when the property entered the settlement), trust income situated outside the UK or held in authorised unit trusts or open-ended investment companies is excluded from the charge.
• Foreign-owned works of art in the UK solely for public display, cleaning or restoration, and trust income represented by qualifying Treasury securities where all beneficiaries meet the required conditions, are also excluded from the ten-year charge.