Readers’ forum: Part appointment of QIIP assets

A qualifying interest in possession (QIIP) was settled in 2001; the assets comprise 100 shares in a former trading company containing cash of £1m. The beneficiaries of the trust are: the settlor their spouse and their descendants. The income of the trust fund is to be paid to the settlor during their lifetime; devolving to the children following the death of both spouses. The trust deed includes powers to appoint assets to either the beneficiaries or a new settlement (including a discretionary settlement).

The settlor is concerned about their IHT exposure and it has been proposed that 40 of the shares (having a value of say £325 000) are appointed to a discretionary settlement in favour of the settlor’s children and descendants. It appears that a charge will arise under IHTA 1984 s 52; the exemptions under s 53 do not appear to apply; and that holdover...