Inheritance Tax Act 1984 section 81B

Excluded property: property to which section 80 applies

Section 81B restricts the circumstances in which settled property can qualify as excluded property where section 80 applies — that is, where the settlor (or their spouse or civil partner) had an initial interest in the settlement and the property is treated as becoming comprised in a new settlement on the termination of that interest.

• Where property is treated under section 80 as becoming comprised in a settlement, it can only be excluded property if the long-term residence and domicile tests in section 48ZA are met by reference to the actual settlor and the actual settlement — not the deemed settlement created by section 80.
• The exemption from exit charges for property invested in Treasury securities likewise only applies if the relevant domicile condition is met by reference to the actual settlor.
• The "actual settlor" is the person who originally settled the property in relation to the first settlement referred to in section 80(1), and the "actual settlement" is that original settlement.
• This section does not apply to holdings in authorised unit trusts or shares in open-ended investment companies if the section 80 event first occurred before 22 July 2020.