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Advancements before forfeiture

Where a protective trust was created after 22 March 2006 (and is not a an immediate post-death interest (I5.205), a disabled person's interest (I5.207), or a transitional serial interest (I5.206)) it will be a relevant property trust. This means that any advancements will give rise to exit charges — see Division I5.3.

As an advancement is excluded from being a case of failure or determination under the Trustee Act 1925, s 33(1)(i), it is not disregarded for IHT purposes. For advancements from qualifying interests in possession (QIIP) this has the consequence that an advance to, say, a remainderman during the trust period would be a transfer of value on the termination (or partial termination) of an interest in possession.

See I5.221 for further information on terminations of QIIPs.

The contrary argument would be that as an advancement is specifically excluded it would otherwise be an occasion of failure or determination, and the IHT legislation does not incorporate the special meaning of failure or determination