Under IHTA84/S86(4)(b) an interest in possession in any part of the settled property is to be disregarded for the purposes of the IHTA84 (except IHTA84/S55) if that part is less than 5 per cent of the whole. A typical example would be a small annuity to a particular employee. Since the terms of IHTA84/S86 do not exclude an interest in possession if it satisfies the conditions of IHTA84/S86(1) and (3), the part in which the interest in possession subsists may itself be subject to IHTA84/S86, and the interest, and its coming to an end, would not give rise to charges that would otherwise apply on property leaving an employee benefit trust.

The wording of IHTA84/S86(4)(a) is such that:

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