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I8.370 Valuing settled property for IHT

A person having a qualifying interest in possession (QIIP — see I5.201) under a trust is treated¹ as being beneficially entitled to the property in which the interest subsists, ie the appropriate part of the trust property is deemed to be part of their estate. When their estate is valued before and after a transfer of value, therefore, the value of the settled property must be taken into account and is aggregable with any similar property in the free estate.

Example 1

AB owns 30% of the voting shares in his family company, XYZ Ltd. Also, under the terms of his father's Will, he has a life interest (which is a QIIP) in another 30% of the shares. The value of a 30% holding is £50,000 and that of a 60% holding is £300,000.

1. Ìý

   •ÌýÌýÌýÌý If AB were to die, the value of the parts of his estate attributable to the shares in XYZ Ltd would be £300,000.

1. Ìý

   •ÌýÌýÌýÌý If AB makes a lifetime gift