The TACS Partnership warns that interests in possession for IHT purposes can be created inadvertently as well as deliberately.
Trust law can be difficult; anyone who is not suitably qualified and experienced should not dabble. For example, it can sometimes be troublesome to determine whether a formal trust deed has created an interest in possession or a discretionary settlement.
The distinction can be very important for various reasons (e.g. in determining the tax treatment for the parties to the settlement).
Fortunately, most trust deeds are drafted well enough for the parties (or their advisers) to safely determine the type of settlement and its tax treatment.
That’s ‘settled’!
The terms ‘trust’ and ‘settlement’ are often used interchangeably, implying that they share the same meaning. As intimated, a trust is generally created and
