Malcolm Finney looks at the concept of reversionary interests and their inheritance tax implications.
Finance Act 2025 introduced significant changes not only to the inheritance tax (IHT) treatment ofâ¯reversionary interests but also with respect to the abolition of the now historic domicile-based tax system, introducing in its place a residence-based system.
Reversionary and remainder interests
It is perhaps interesting to note that whilst for IHT purposes a ‘reversionary interest’ extends to include remainder interests, this is not so when considered in pure trust terms, where its meaning is limited to reversions of interests to the settlor.
Example: Reversionary interest
A trust for life for&
