Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Relevant property definition

What does Relevant property mean? In UK trust practice, relevant property means trust assets that fall within the inheritance tax (IHT) “relevant property regime”, under which trustees may face ten‑yearly (periodic) and exit charges when property is distributed or appointments are made. The term is statutory and used consistently across England and Wales, Scotland and Northern Ireland under the Inheritance Tax Act 1984. Most discretionary trusts, and many lifetime trusts created on or after 22 March 2006, hold relevant property. Key exclusions include property in qualifying interest in possession trusts (for example, an immediate post‑death interest or a transitional serial interest), disabled person’s interests, bereaved minors’...

The relevant property regime for trusts under the Inheritance Tax Act 1984: recognition, exceptions, commencement, ten‑year charges, exits and related settlements

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Practice notes

Relevant property

The phrase 'relevant property' identifies a class of trust assets that falls within a distinct Inheritance tax (IHT) regime. As outlined in Practice Note: Introductory guide to the taxation of trusts, the IHT treatment of trust assets sits in two principal groupings:

beneficial entitlement
relevant property

Within the 'beneficial entitlement' grouping, trust assets are charged to IHT as though the Beneficiary owned them outright. They are regarded as the beneficiary’s and are included within their estate. This generally applies where the beneficiary enjoys a qualifying Interest in possession (QIIP), or holds an absolute entitlement to the trust assets. See Practice Notes: Qualifying interest in possession trusts—IHT treatment and Bare trusts—IHT.

In contrast, relevant property has a separate tax existence. Once it is effectively taken out of the settlor’s estate, it is not assessed as part of any other person’s estate. To balance this, a special regime applies. Relevant property can be subject to IHT at the following times:

when it becomes relevant property...

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Paul Davies

Clarke Willmott

Paul Davies is a partner in the private client team of Clarke Willmott. He is a solicitor, a chartered tax advisor, and a member of the Society of Trust and Estate Practitioners, as well as being a chartered accountant (albeit no longer practising as such). He specialises in providing advice across the range of different tax and legal issues that face high net worth individuals, executors, and trustees.Paul's work spans all areas of private client work, including wills, trusts of all kind, inheritance tax, succession planning, probate and estate administration, and lasting powers of attorney. Paul acts as a professional trustee for a number of family trusts, and is also regularly called on to act as a professional executor....

Web page updated on 22/05/2026

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