No tax is charged in respect of property leaving a maintenance fund if any of the following become beneficially entitled to it:

the settlor;

the settlor’s spouse or civil partner; or

the settlor’s widow or widower or surviving civil partner, if the settlor has died within the last two years (IHTA 1984, Sch. 4, para. 10(1) ).

This is of great practical importance. It means that the settlor can retain access to property settled in a maintenance fund, so that the trustees can distribute property back to the settlor or his spouse or civil partner without adverse inheritance tax (or CGT) consequences.

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