Part 2: Inheritance Tax Section 13: Settlements with initial interest in possession Background note
Changes made in 2006 created an unintended effect in the legislation where an individual has a pre-March 06 entitlement to income (interest in possession) which has continued after March 2006 and their spouse then takes an interest in possession, whilst they are still alive, after that date. The amendment will mean that settled property is relevant property once the individual's spouse takes their life interest.
	This section is related to three others in this Act which make changes to the relevant property trust legislation. The other sections are 11- Calculation of rate of inheritance tax on settled property, 12- Exemption from tenyearly charge for heritage property, and 14- Distributions etc from property settled by will.