Section 8HA — Inheritance Tax Act 1984: Qualifying former residential interest”: interests in possession

Qualifying former residential interest”: interests in possession 8HA 1 This section applies for the purposes of determining whether certain interests may be, or be included in, a qualifying former residential interest in relation to a person (see section 8H(4A) to (4C)).

2 This section applies where—

a a person (“P”) is beneficially entitled to an interest in possession in settled property, and b the settled property consists of, or includes, an interest in a dwelling-house.

3 Subsection (4) applies where—

a the trustees of the settlement dispose of the interest in the dwelling-house to a person other than P, b P's interest in possession in the settled property subsists immediately before the disposal, and c P's interest in possession—

i falls within subsection (7) throughout the period beginning with P becoming beneficially entitled to it and ending with the disposal, or ii falls within subsection (8).

4 The disposal is to be treated as a disposal by P of the interest in the dwelling-house to which P is beneficially entitled as a result of the operation of section 49(1).

5 Subsection (6) applies where—

a P disposes of the interest in possession in the settled property, or P's interest in possession in the settled property comes to an end in P's lifetime, b the interest in the dwelling-house is, or is part of, the settled property immediately before the time when that happens, and c P's interest in possession—

i falls within subsection (7) throughout the period beginning with P becoming beneficially entitled to it and ending with the time mentioned in paragraph (b), or ii falls within subsection (8).

6 The disposal, or (as the case may be) the coming to an end of P's interest in possession, is to be treated as a disposal by P of the interest in the dwelling-house to which P is beneficially entitled as a result of the operation of section 49(1).

7 An interest in possession falls within this subsection if—

a P became beneficially entitled to it before 22 March 2006 and section 71A does not apply to the settled property; or b P becomes beneficially entitled to it on or after 22 March 2006 and the interest is—

i an immediate post-death interest, ii a disabled person's interest, or iii a transitional serial interest.

8 An interest in possession falls within this subsection if P becomes beneficially entitled to it on or after 22 March 2006 and it falls within section 5(1B).