IHTM42230 - The settlement: related settlements

Two trusts are related under IHTA84/S62 only if

  • the settlor is the same in each case, and
  • they commenced on the same day

All non-charitable settlements complying with the conditions are ‘related’, but for the purposes of calculating the rate of tax for charges on relevant property and 18/25 trusts, the rules are:  

  • For exit, anniversary, and 18/25 charges before 18 November 2015 the historic value of all the settlor’s non-charitable settlements are aggregated for rate purposes. 

  • For exit and anniversary charges on or after 18 November 2015 only the historic value of the settlor’s relevant property settlements are aggregated for rate purposes. 

  • For 18/25 charges on or after 18 November 2015 only the historic value of the settlor’s 18/25 settlements are aggregated for rate purposes. 

NB If a trust is a ‘related’ trust it cannot be a ‘same day addition’ (IHTA/S62A(4)) (IHTM42233)  

Charitable trusts 

IHTA84/S62 (2) states that 2 settlements are not related if the property in one or both of the trusts was held for charity without limit of time. 

Prior qualifying interest in possession (QIIP) interests 

If IHTA84/S80 applies in relation to a QIIP the artificial later date applies in deciding whether trusts were made on the same day.(IHTM42231)