qualifying IIP

qualifying IIP
England, Wales
Qualifying interest in possession (IIP) trusts are treated, for inheritance tax purposes, as though the assets belonged to the life tenant (see Practice note, Taxation of UK trusts: overview: Qualifying IIP trusts). They are not taxed under the relevant property regime, which imposes a number of charges on the trust during the lifetime of the trust.
From 22 March 2006, only the following are qualifying IIPs:
• An IIP to which an individual became entitled before 22 March 2006.
• An IIP to which an individual became entitled on or after 22 March 2006 and which is:
(Section 59(1), Inheritance Act 1984 (IHTA 1984).)
All other IIP trusts created on or after 22 March 2006 are subject to the relevant property regime, unless they meet the conditions for trust for bereaved minors or 18 to 25 trusts, which are subject to their own charging regimes under sections 71B and 71E of IHTA 1984 respectively.
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Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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