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Example 1—simple TSI

A settlement is made before 22 March 2006 and provides for the trust fund to be held upon trust for A for life, remainder to B for life, remainder to C absolutely.

A dies after 21 March 2006 but before 6 October 2008.

B's life interest will be a TSI.

Example 2—part of trust fund (1)

A settlement is made before 22 March 2006 and provides for the trust fund to be held upon trust as to a half share for A for life, remainder to B for life, remainder to C absolutely, and as to the other half share for D for life remainder to E for life, remainder to F absolutely.

D surrenders his life interest after 21 March 2006 but before 6 October 2008. Is E's life interest a TSI given that D's life interest did not extend to the whole of the settled property in the settlement prior to 22 March 2006?

HMRC's view is that this is a TSI, since the condition that property comprised