Section 74A — Inheritance Tax Act 1984: Arrangements involving acquisition of interest in settled property etc

Arrangements involving acquisition of interest in settled property etc 74A 1 This section applies where—

a one or more persons enter into arrangements, b in the course of the arrangements—

i an individual (“the individual”) ... acquires or becomes able to acquire (directly or indirectly) an interest in property comprised in a settlement ( “ the relevant settled property ” ),

and ii consideration in money or money's worth is given by one or more of the persons mentioned in paragraph (a) (whether or not in connection with the acquisition of that interest or the individual becoming able to acquire it),

ba the individual—

i is a long-term UK resident at any time on or after 6 April 2025 during the course of the arrangements, or ii acquired the interest, or became able to acquire it, at a time before 6 April 2025 while domiciled in the United Kingdom, c there is a relevant reduction in the value of the individual's estate, and d condition A or condition B is met.

2 Condition A is that the relevant settled property is excluded property at any time during the course of the arrangements. Ignore for this purpose—

a section 48ZA(8) (as it has effect on and after 6 April 2025);

b section 48(3D) (as it had effect before 6 April 2025).

3 Condition B is that—

a the settlor was not an individual or a close company at the time the relevant settled property became comprised in the settlement , and b condition A is not met.

4 Subsection (6) applies if all or a part of a relevant reduction (“amount A”) is attributable to the value of the individual's section 49(1) property being less than it would have been in the absence of the arrangements. 5 “ The individual's section 49(1) property ” means settled property to which the individual is treated as beneficially entitled under section 49(1) by reason of the individual being beneficially entitled to an interest in possession in the property.

6 Where this subsection applies—

a a part of that interest in possession is deemed, for the purposes of section 52, to come to an end at the relevant time, and b that section applies in relation to the coming to an end of that part as if the reference in subsection (4)(a) of that section to a corresponding part of the whole value of the property in which the interest in possession subsists were a reference to amount A.

7 Subsection (8) applies to so much (if any) of a relevant reduction as is not amount A (“amount B”).

8 Tax is to be charged as if the individual had made a transfer of value at the relevant time and the value transferred by it had been equal to amount B.