Inheritance Tax Act 1984 section 71B

Charge to tax on property to which section 71A applies

Section 71B sets out when an inheritance tax charge arises on property held in a trust for a bereaved minor, and the circumstances in which exemptions from that charge apply.

• A tax charge arises when property leaves a bereaved minor's trust or when trustees make a disposition that reduces the value of such trust property.
• No tax is charged when the bereaved minor reaches 18 (or becomes absolutely entitled earlier), dies before 18, or the property is paid or applied for the minor's advancement or benefit.
• Where an amount is paid otherwise than for the minor's benefit and other exemptions do not apply, the lower of the amount paid and the annual limit is exempt from the charge.
• Special rules determine the start date for calculating the tax charge where property has previously been held in an accumulation and maintenance trust or an age 18-to-25 trust before becoming bereaved minor's trust property.