Dropping the pilot

If a testator leaves property in his will to an existing interest in possession pilot trust will that qualify as an immediate post-death interest (IPDI) and thus avoid the ten-year charge?

IHTA 1984 s 49A requires that 'the settlement was effected by will’.

The pilot trust was originally created in 2005 with a nominal £10. Does the gift in the will (probably £500 000/£600 000) comply with s 49A or is it merely an addition to an existing settlement?

Taxation readers’ views on this subject together with any other tax planning points or suggestions would be very welcome.

Query 17 646 – Bismarck

Reply from Percy Lion

Bismark is right to identify the problem posed by the wording of Condition 1 in IHTA 1984 s 49A. This was addressed by CIOT and STEP and...