Proportionate charges can arise at any time during the life of the trust except that under IHTA84/S65 (4), no proportionate charge arises if the exit event occurs in the first quarter following
In these two periods, any exits are free of inheritance tax.
However, there is no chargeable event for inheritance tax, so the
trustees will not be able to claim Capital Gains Tax holdover
relief under TCGA92/S260. (
See Frankland v IRC  STC 735.
IHTA84/S144 allows trustees to distribute from a will trust
within two years of the death without a proportionate charge
Again, there is no chargeable event, and so holdover relief does not apply to the transfer for CGT purposes.