Section 64: Charge at ten-year anniversary., Inheritance Tax Act 1984

Where immediately before a ten-year anniversary all or any part of the property comprised in a settlement is relevant property, tax shall be charged at the rate applicable under sections 66 and 67 below on the value of the property or part at that time.

For the purposes of subsection (1) above, property held by the trustees of a settlement immediately before a ten-year anniversary is to be regarded as relevant property comprised in the settlement at that time if—

it is income of the settlement,

the income arose before the start of the five years ending immediately before the ten-year anniversary,

the income arose (directly or indirectly) from property comprised in the settlement that, when the income arose, was relevant property, and

when the income arose, no person was beneficially entitled to an interest in possession in the property from which the income arose.

Where the settlor of property comprised in a settlement meets the condition in subsection (1BZA), income of the settlement that arose (directly or indirectly) from the property is not to be regarded as relevant property comprised in the settlement as a result of subsection (1A) above so far as the income—

is situated outside the United Kingdom, or

is represented by a holding in an authorised unit trust or a share in an open-ended investment company.

The condition is that the settlor—

is alive and is not a long-term UK resident immediately before the ten-year anniversary,

died on or after 6 April 2025 and was not a long-term UK resident immediately before their death, or

died before 6 April 2025 and was not domiciled in the United Kingdom when the property became comprised in the settlement.

If—

an amount is payable in respect of property ("the existing property") comprised in a settlement, and

the amount represents an accumulation of income which (once accumulated) becomes comprised in the settlement,

subsection (1BZA)(c) has effect, in the case of the amount, as if any reference to the time it became comprised in the settlement were to the time the existing property became comprised in the settlement.

Income of the settlement is not to be regarded as relevant property comprised in the settlement as a result of subsection (1A) above so far as the income—

is represented by securities issued by the Treasury subject to a condition of the kind mentioned in subsection (2) of section 6 above, and

it is shown that all known persons for whose benefit the settled property or income from it has been or might be applied, or who are or might become beneficially entitled to an interest in possession in it, are persons of a description specified in the condition in question.

For the purposes of subsection (1) above, a foreign-owned work of art which is situated in the United Kingdom for one or more of the purposes of public display, cleaning and restoration (and for no other purpose) is not to be regarded as relevant property.

Section 64: Charge at ten-year anniversary.

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