IHTM42974 - Employee benefit trusts: sub-trusts: commencement date

Where property is appointed onto sub-trusts which do not meet the provisions of IHTA/S86 it will be subject to the ten year IHTM42081 and exit charges IHTM42110. So, you will need to establish the commencement date of the sub-trust. There are two situations to consider when considering the commencement date of a sub-trust.

The most common situation is that a sub-trust is not a separate settlement as a matter of trust law and is merely an allocation of funds within the original trust. This means that the relevant start date for the settlement when considering the trust charges is the date of the original employee benefit trust (EBT) and not the date the sub-trust was constituted.

It is unlikely that a sub-trust will be a separate settlement for trust law purposes. But, if this the case, IHTA84/S81 (IHTM42229) will mean that the relevant start date for the settlement when considering the trust charges will still be the date of the EBT and not the date that the sub-trust was constituted.