Section 8J — Inheritance Tax Act 1984: Meaning of “inherited”

Meaning of “inherited” 8J 1 This section explains for the purposes of sections 8E , 8F, 8FA, 8FB and 8M whether a person (“B”) inherits, from a person who has died (“D”), property which forms part of D's estate immediately before D's death.

2 B inherits the property if there is a disposition of it (whether effected by will, under the law relating to intestacy or otherwise) to B.

3 Subsection (2) does not apply if—

a the property becomes comprised in a settlement on D's death, or b immediately before D's death, the property was settled property in which D was beneficially entitled to an interest in possession.

4 Where the property becomes comprised in a settlement on D's death, B inherits the property if—

a B becomes beneficially entitled on D's death to an interest in possession in the property, and that interest in possession is an immediate post-death interest or a disabled person's interest, or b the property becomes, on D's death, settled property—

i to which section 71A or 71D applies, and ii held on trusts for the benefit of B.

5 Where, immediately before D's death, the property was settled property in which D was beneficially entitled to an interest in possession, B inherits the property if B becomes beneficially entitled to it on D's death.

6 Where the property forms part of D's estate immediately before D's death as a result of the operation of section 102(3) of the Finance Act 1986 (gifts with reservation) in relation to a disposal of the property made by D by way of gift—

a subsections (2) to (5) do not apply, and b B inherits the property if the property originally comprised in the gift became comprised in B’s estate on the making of the disposal.