IHTM42166 - Relevant property: treatment of income after 6 April 2014
In general,바카라 사이트痶he income of the settlement is not relevant property unless and until the trustees can and do exercise a power to accumulate and add it to the capital바카라 사이트�(IHTM42162).바카라 사이트�听
However, the treatment of income that has not been converted to capital is different where a ten-year바카라 사이트痑nniversary (TYA)바카라 사이트痗harge arises on or after 6 April 2014. The broad effect of these provisions is that income which has not been distributed or converted to capital and has been held by the trustees for more than five years is to be treated as relevant property for the purposes of the바카라 사이트疶YA바카라 사이트痗harge. The amendment to IHTA84/S66 means that tax is charged at the full rate, without any adjustment for the length of time the income has been held by the trustees.바카라 사이트�바카라 사이트�바카라 사이트�听
IHTA84/S64(1A) identifies听the income concerned as income which:바카라 사이트�바카라 사이트�听
is income of the settlement,바카라 사이트�听
arose more than five years before the바카라 사이트疶YA바카라 사이트痗harge,바카라 사이트�听
has arisen (either directly or indirectly) from property comprised听in the settlement that was, when the income arose, relevant property, and바카라 사이트�听
when the income arose, no person was beneficially entitled to an interest in possession in the property from which the income arose.바카라 사이트�听
In most cases, there is no need to conduct a forensic examination of transactions through the income account. In determining听whether any income is to be treated as relevant property under these provisions, it will normally be sufficient for trustees to take the balance on the income account immediately听before the바카라 사이트疶YA바카라 사이트痽ear arises and deduct from that amount바카라 사이트痶he income that has arisen during the five preceding years. Any balance on the income account is to be treated as relevant property.听
If the trust바카라 사이트檚 accounting period does not match with the anniversary of the trust, you may accept a sensible and reasonable approach to allocating听income to the바카라 사이트�five year听period immediately听before the바카라 사이트疶YA바카라 사이트痗harge (which will escape the charge). Where income has been distributed, again, you can follow the trustees바카라 사이트� approach and unless it is clear바카라 사이트痑 specific part of the income has been distributed.바카라 사이트疉바카라 사이트�바카라 사이트榝irst in, first out바카라 사이트� approach is acceptable.바카라 사이트�听
For the avoidance of doubt, IHTA84/S64(1A) is not limited to just the바카라 사이트�ten year听period before each바카라 사이트疶YA바카라 사이트痗harge. All income which arose more than five years before any바카라 사이트疶YA바카라 사이트痗harge is treated as relevant property and will include income that arose at any time before the previousten year听charge. If such income has not been distributed by the time the next바카라 사이트疶YA바카라 사이트痗harge arises, you should treat it as relevant property for the purposes of that charge.听
Interaction with excluded property听
For chargeable events on or after 6 April 2025, there is a relaxation from the general position where听
the settlor:听
Is alive and is not a long-term UK resident听(IHTM47000)听immediately听before the TYA;听
Dies on or after 6 April 2025 and was not a long-term UK resident immediately听before their death; or听听
Dies before 6 April 2025 was not domiciled in the UK at the time바카라 사이트痺hen바카라 사이트痶he바카라 사이트痯roperty (producing the income) became comprised听in the바카라 사이트痵ettlement听(IHTA84/S64(1BZA)听听
and the income is represented by바카라 사이트�바카라 사이트�听
property바카라 사이트痺hich is situated outside the UK, IHTA84/S64(1B)(a), or바카라 사이트�听
a holding in an Authorised Unit Trust (AUT) or an Open-ended Investment Company (EIC),바카라 사이트疘HTA84/S64(1B)(产).바카라 사이트�听
the income is represented by exempt gilts听and it is shown that all the beneficiaries who could ever become entitled to the capital or income from the settled property meet the condition for residence and domicile specified in the issue of the Treasury stock concerned, IHTA84/S64(1C).바카라 사이트�听
For chargeable events before 6 April 2025 the condition in relation to the settlor is that they were not domiciled (IHTM13000)听in the UK at the time the property became comprised听in the settlement and were not a formerly domiciled resident for the tax year in which the TYA charge falls.听
There is no relief for the period that the income that is deemed to be relevant property because IHTA84/S66(2A) dis-applies IHTA84/S66(2) 바카라 사이트� which allows for a reduced rate where property has not been relevant property throughout the preceding ten years 바카라 사이트� for income that is treated as relevant property under IHTA84/S64(1A), so that tax is charged as regards such income at the rate given by IHTA84/S66(1).바카라 사이트�