Paragraph 28 IHTA 1984

United Kingdom

(1)

Section 272 (general interpretation) is amended as follows.

(2)

The existing text becomes subsection (1).

(3)

In subsection (1)—

(a)

in the definition of “excluded property”, for “6 and 48” substitute “6, 48 and 48ZA”;

(b)

omit the definition of “formerly domiciled resident”.

(4)

Also in subsection (1), in the definition of “foreign-owned”—

(a)

in paragraph (a), for “domiciled outside the United Kingdom” substitute “not a long-term UK resident”;

(b)

for paragraph (b) substitute—

“(b)

if the property is comprised in a settlement, in the case of which the settlor—

(i)

is alive and is at that time not a long-term UK resident,

(ii)

died on or after 6 April 2025 and was not a long-term UK resident immediately before they died, or

(iii)

died before 6 April 2025 and was domiciled outside the United Kingdom when the property became comprised in the settlement,

and section 48ZA (9) (accumulation of income) applies for the purposes of this paragraph as it applies for the purposes of section 48ZA (4).”

(5)

Also in subsection (1), at the appropriate places insert—

““long-term UK resident” has the meaning given by sections 6A to 6C;”;

““tax year” means a year beginning with 6 April and ending with the following 5 April;”;

““the tax year 2025-26” means the tax year beginning with 6 April 2025 (and any corresponding expression in which two years are similarly mentioned is to be read in the same way);”.

(6)

After subsection (1) insert—

“(2)

A reference in this Act to a settlor’s being alive or dying is to be read, in relation to a settlor who is a body corporate, as a reference (respectively) to the body’s being in existence or ceasing to exist.”