»Ê¹ÚÌåÓýapp

Where a close company is entitled to a qualifying interest in possession (QIIP) (IHTM16000) in settled property, IHTA84/S101 (1) ‘looks throughâ€� the company and treats each participator as entitled to an appropriate share of the company’s interest. »Ê¹ÚÌåÓýapp one exception to this is in connection with a claim with the purchase of a reversion (IHTM04272) under IHTA84/S55.

If the participator’s share of the company is held beneficially, their estate (IHTM04029) includes an appropriate share of the settled property and so a transfer of value (IHTM04023) will occur when they die. A transfer of value would also be made by them in the event of a reduction in his share of the company otherwise than for full consideration.

If the participator’s share is held otherwise than in a beneficial capacity (typically as trustee of a settlement) then they are treated as entitled to the settled property only in that capacity.

If they are trustee of a settlement with non-IIP trusts then their share is treated as comprised in the settled funds to the extent that no IIP subsists under that settlement.

»Ê¹ÚÌåÓýapp same applies to the extent that there is a QIIP, but in addition IHTA84/S101 (2)treats the life tenant etc as beneficially entitled to the trustee’s share of the company’s interest. As a result a transfer of value will occur when the life tenant dies and one would also be made by him in the event of a reduction in the trustee’s share of the company otherwise than for full consideration.

It follows that where a person who had a QIIP in settled property assigns the interest to a close company wholly owned by him, there is in effect no change in the beneficial ownership and no claim arises - see IHTA84/S53 (2) and IHTA84/S101 (1).