HMRC Inheritance Tax: Customer Guide

Tell me about discretionary trusts relevant property trusts and age 18 to 25 trusts

What is a 'discretionary trust'?

Usually, trusts under which, for the time being, there is no individual with a right to an interest in possession are referred to as discretionary trusts. For example, when the settled property is held on trust to accumulate the income or to apply the income at someone's discretion, usually the trustees', with or without power to accumulate any surplus The property in a discretionary trust is relevant property and taxed as a relevant property trust.

How are discretionary trusts taxed?

For inheritance tax, property held on discretionary trusts falls into two categories. These are
relevant property, and property held on special trusts.

What is a relevant property trust?

From 22 March 2006, a relevant property trust is any trust which is not one of the following:

Relevant property trusts include discretionary trusts