IHTM10601 - IHT 101 (before 2003): introduction

The IHT 101 is used when there was

• a chargeable event on settled property held on trust
• no interest in possession, at the time, and
• the chargeable event occurred before October 2003.

Trusts of this kind are commonly called ‘discretionary trusts’. However some care is needed when using this term as it covers a multitude of situations.

The account is mainly used in connection with chargeable events on ‘relevant property’ (IHTM04095). These include

• ten-year anniversary charges
• charges on property ceasing to relevant property, and
• dispositions by the trustees that result in a reduction in the value of the relevant property.

The account is also used when there is a charge that arose before October 2003 on ‘special trusts’ (IHTM04098). Charges arise when

• property ceases to be subject to the special trust, or
• there is a disposition by the trustees which result in a reduction in the value of property held on trust.

You can find more information about the charging provisions for relevant property (IHTM04096) and the rules for taxing special trusts in section 4 of this manual.

If you are unsure what type of settlement you are dealing with you should seek advice from Technical.

The following guidance relates to the IHT 101 in use up to October 2003. It was replaced by the new version of the IHT 100 guidance for which is at IHTM10650.