IHTM42813 - Special trusts: compensation and special purpose funds

Property held in a compensation fund maintained by a trade or professional association is wholly exempt from Inheritance Tax charges if   

• it is maintained or administered by a representative association of persons carrying on a trade or profession, and  

• the only or main objects of which are compensation for or relief of losses or hardship that, through the default or alleged default of persons carrying on the trade or profession or of their agents or servants, are incurred or likely to be incurred by others, IHTA84/S58 (1)(e) & (3). 

Special purpose funds: 

Asbestos Compensation Settlement 

This is a trust related to individuals who have, or had before their death, an asbestos-related condition. 

Decommissioning Security Settlement 

This is a trust the sole or main purpose of which is to provide security for the performance of obligations under an abandonment programme approved under Part 4 of the Petroleum Act 1998.