This exemption is a carry-over from the Estate Duty regime. With
certain provisos, it affords relief on the termination of the
surviving spouse’s limited interest in possession (IIP) (
IHTM16000) in settled property.
Although this relief is obsolete, it will be many years before it
becomes totally irrelevant. You therefore need to be aware of the
provisions in some detail. The relief may apply on the death of the
surviving spouse, (
IHTM04343) or when the interest of the
surviving spouse terminates (
IHTM04344) during their lifetime.
If you think that the relief may be due, but the taxpayer has not deducted it, see IHTM04346.