IHTM30112 - The settlor: limitations on settlor's liability

The settlor may be liable for tax on

• an ending during lifetime of an interest in possession (IHTM30281), whether it is a potentially exempt transfer (PETs) or chargeable when made and
• charges under the relevant property trust (IHTM16042) regime.

Under IHTA84/S201 (1)(d) the settlor is liable if two basic conditions are satisfied

• the transfer takes place during the settlor’s lifetime
• the trustees are for the time being resident outside the UK.

These two conditions are basic. If they are not satisfied, the settlor cannot be liable under IHTA84/S201 (1)(d). But if the conditions are satisfied, the settlor is not necessarily liable.  IHTA84/S201 contains three subsections excluding liability under IHTA84/S201 (1)(d) in situations relating to PETs (IHTM30113) and where a settlement was made before 11 December 1974 (IHTM30115).