Section 124I — Inheritance Tax Act 1984: Trust maximum allowance (qualifying pre-commencement settlements)

Trust maximum allowance (qualifying pre-commencement settlements) 124I 1 The trust maximum allowance for an occasion on which tax is chargeable under section 64 or 65 in relation to a qualifying pre-commencement settlement is £2.5 million.

2 A settlement is a qualifying pre-commencement settlement if—

a the settlement commenced before 30 October 2024, and b had there been an occasion on which tax is chargeable under Chapter 3 of Part 3 (apart from section 79), immediately before that date in relation to all of the property comprised in the settlement, at least some of the amount on which tax would then be chargeable would be treated as reduced as a result of subsection (1B) of section 104 or 116 if—

i the amendments made to those sections by paragraphs 2, 3 and 12 of Schedule 12 to the Finance Act 2026 had been in force, ii sections 106, 117 and 123 (minimum periods of ownership or occupation) were ignored, iii all of the property had been relevant property, and iv there were an amount of the 100% trust relief allowance available in relation to it.

3 The condition in subsection (2)(b) is to be treated as met if—

a some or all of the property comprised in the settlement is agricultural property let on a tenancy beginning before 1st September 1995, b the transferor’s interest condition in section 116(2) was not met in relation to that property immediately before 30 October 2024, and c the condition in subsection (2)(b) of this section would have been met if the transferor’s interest condition had been met in relation to that property at that time.