IHTA84/S47 provides that in this Act ‘reversionary interest’ means a future interest under a settlement, whether it is vested or contingent (or whether it relates to only part of a fund) and in relation to Scotland includes an interest in the fee of property subject to a proper liferent.
A vested reversionary interest -
Mrs T leaves her house by will to her daughter Mrs L for life and on the daughter’s death to Miss R absolutely.
In this case Miss R will take the interest on Mrs L’s death.
If she (Miss R) dies before Mrs L then the house will go to Miss R’s estate. Nothing can prevent the property the subject of this reversionary interest going to Miss R or her estate.
A contingent reversionary interest -
Mr T leaves the residue of his estate by will to his son Mr A for life and on the death of the life tenant, Mr A, to Mr T’s nephews who are then living equally absolutely.
In this case the interest of each nephew is contingent upon his surviving Mr A. If he does not fulfil this contingency then, on these facts, he receives nothing.