IHTM42925 - Employee benefit trusts: conditions for relief: partnerships

England, Wales and Northern Ireland

A trust does not qualify under IHTA84/S86 if it is for the benefit only of a particular sole trader or partnership. This is because an individual sole trader or partner is not:

• a ‘body’ within IHTA84/S86(1)(a), or
• a class of people defined by a trade, profession or undertaking of the employer.

The ‘employees’ of a partnership are the individual partners who carry on their trade, profession or undertaking in an association governed by their Articles so they are not employed by a ‘body’.

Scotland

In Scotland a partnership is a separate legal persona, so it could create an employee benefit trust within the terms of IHTA84/S86.