IHTM17082 - Claim on general power to dispose of death benefits: power of appointment

Where the deceased had a general power to dispose of the death benefits ( IHTM17030) to their own estate ( IHTM04029) then a claim arises under IHTA84/S5 (2) unless this has been irrevocably exercised whilst they were in good health.

Example

• Death benefits written on discretionary trusts for X, Y and Z, and the deceased retains the sole power to appoint themselves as a potential beneficiary at any time
• and the deceased retains the sole power to appoint the death benefits

The deceased had the power to appoint the funds to themselves or their own estate. IHTA84/S5 (2) therefore deems the death benefits to be part of the deceased’s estate for IHT purposes.

Claims under IHTA84/S5 (2) will normally be identified by TG in IHT Edinburgh on examination of the trust deeds and/or scheme rules. If you think you may have a claim on a death benefit under IHTA84/S5 (2) you should refer the file to TG in IHT Edinburgh to confirm the claim.

Where there is a claim on the death benefits under IHTA84/S5 (2) the personal representatives ( IHTM05012) should include the lump sum at box 15 on the form IHT409 ( IHTM10035) and carry it forward to 56 on the IHT400 ( IHTM10021).