IHTA84/S105 (1)(e) applies only to settled property. It makes
business relief available for transfers of qualifying assets in
which the transferor had an interest in possession. It applies to
lifetime transfers only.
Business relief at 100% under IHTA84/S105 (1)(a) is available
on a transfer on death where the transfer is a combined one of the
deceased’s business, or interest in a business, and the
qualifying settled property used in his business (
IHTM25154)). However there is some
doubt whether this can apply to a lifetime transfer.
So in practice you only need to consider the 50% relief under
IHTA84/S105 (1)(e) if there was a lifetime transfer of the
qualifying settled assets by themselves. The most common example is
where the transferor's interest under the settlement comes to an
end in his lifetime and he dies within seven years. A charge would
arise under IHTA 1984 s.52(1) on the land but not on the business.
Settled property may also qualify for relief under
IHTA84/S105 (1)(d).
