If a trust is established either under a will (
IHTM12041) or Intestacy (
IHTM12101), by a deed, instrument of
variation (
IHTM35000) or under a life insurance
policy (
IHTM20141), or the trusts continue
after the death of a life tenant the LIT 1 procedures may apply.
You should complete a form LIT 1 as soon as you are aware of the
trust if the known trust capital – whether in a single trust
or in a number of trusts – exceeds the IHT threshold. If
there is more than one settlor the names and addresses of all the
settlors should be given.
If a trust is made by instrument of variation the settlor
for this purpose is the person disposing of the benefit under the
will or intestacy, not the deceased, and the date of the settlement
is the date of the instrument.
The form LIT 1 is part of the standard letter suite and
should be completed on-screen. You should save the completed form
into the shared folder on the Knowledge Tree at: /IR Capital
Taxes/Admin/Forms/Cross IHT & Trusts/LIT1. Trusts Office have
access to the folder and they will distribute the forms as
appropriate within the Compliance Sections. You should note that
you have sent the form LIT 1 on the enquiry plan (
IHTM29051) or in the COMPASS notes.
If you wish to be told when an interest in a settlement
ceases either because of death or otherwise, you should complete
part 5 of the form. This should be done if the file is to receive
an ‘O(F)’ marking (
IHTM39041) when closed.
The LIT 1 procedures should not be followed if a form IHT
100 (
IHTM10501) shows a Trust Office
reference.
