IHTM27250 - Foreign property: discretionary trusts and exempt securities: exit charge

At IHTA84/S65, the rules relating to discretionary trusts provide for a tax charge when property ceases to be relevant property (leaves the discretionary trust regime). Where property in a discretionary trust becomes excluded property (and therefore ceases to be relevant property) for the sole reason that it is invested in exempt securities, the usual exit charge does not apply听under the following conditions:听

  • Before听6 April 2025听and/or where a settlor has died before 6 April 2025听

If the settlor鈥檚 domicile (under general law) was outside the UK听at听the time the property became comprised听in the settlement听听

or听

  • 听6 April 2025听

  • at the time the charge arises the听settlor听was听not a long-term UK resident; or听

  • if听the settlor has died听on or after 6 April 2025 and before the charge arises, if听the settlor was not a long-term UK resident at their death.

IHTA84/S65(7A) inserted by FA13/S175 provides for the same treatment to apply to investment in AUTs or OEICs (IHTM04262).听