Misc. 121 FINANCE ACT 2006 SCHEDULE 20: PRE-EXISTING INTERESTS IN POSSESSION AND RELATED MATTERS
[29 May 2007]
We are writing about a number of situations (set out in the questions below) where a person (A) was beneficially entitled to an interest in possession in settled property before 22 March 2006. Doubt has been expressed as to whether section 49(1) of the Inheritance Tax Act 1984 will continue to apply in the future, notwithstanding that A will throughout be entitled to the income of the settled property. We consider that, in all those situations, section 49(1) will continue to apply, notwithstanding section 49(1A) which (with exceptions) disapplies that sub-section where the interest in possession is one to which a person becomes beneficially entitled on or after 22 March 2006.