The general rule is that a trustee (whether professional or
not) is not entitled to remuneration for his services. However the
settlement may provide for him to receive normal professional fees
and/or an interest in possession (IIP) (
IHTM16000) – commonly an annuity
- in the settled property by way of remuneration. The right to
charge fees has no particular consequence for the purposes of IHT,
but the right to an IIP constitutes a beneficial entitlement.
IHTA84/S90 provides that where an IIP comes to an end on a
death, (
IHTM04082) the property is left out of
account in determining the value of the deceased’s estate.
Where such an interest comes to an end otherwise than on death (
IHTM04083) by excluding the charge
under IHTA84/S52.
The relief applies only to the extent that the interest
represents a reasonable amount of remuneration. You should
interpret this as meaning a reasonable amount after making
allowance for any fees which the trustee is entitled to receive
under a professional charges clause.
Where relief was allowed under IHTA84/S90 on the termination
of an IIP, and after an interval another trustee becomes entitled
to an IIP in the settled property as remuneration, no claim should
be raised under IHTA84/S52 (1) to the extent that the later
interest represents no more than reasonable remuneration.
You should refer any case where your view of what constitutes
a reasonable remuneration is disputed to TG.
You may issue an assurance in appropriate circumstances to
the effect that it is not proposed to claim IHT on the death or
other event on which the annuity etc in question comes to an
end.
