Section 55A: Purchased settlement powers

Inheritance Tax Act 1984 · 1984 c. 51View on legislation.gov.uk

Part III: SETTLED PROPERTY — CHAPTER II: INTERESTS IN POSSESSION, REVERSIONARY INTERESTS AND SETTLEMENT POWERS

Where a person makes a disposition by which he acquires a settlement power for consideration in money or money's worth—

section 10(1) above shall not apply to the disposition;
the person shall be taken for the purposes of this Act to make a transfer of value;
the value transferred shall be determined without bringing into account the value of anything which the person acquires by the disposition; and
sections 18 and 23 to 27 above shall not apply in relation to that transfer of value.

For the purposes of this section, a person acquires a settlement power if he becomes entitled—

to a settlement power,
to exercise, or to secure or prevent the exercise of, a settlement power (whether directly or indirectly), or
to restrict, or secure a restriction on, the exercise of a settlement power (whether directly or indirectly),

as a result of transactions which include a disposition (whether to him or another) of a settlement power or of any power of a kind described in paragraph (b) or (c) above which is exercisable in relation to a settlement power.

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Reuse reviewed 21 August 2026 under Open Government Licence v3.0.