188体育

The concept of Same Day Additions (SDAs) was introduced by the Finance (No.2) Act 2015 in IHTA84/S62A. The rules for SDAs supplement the existing rules that include 鈥榬elated trusts鈥� in arriving at a value for the notional transfer (IHTM42085), for the purposes of calculating the rate of tax for charges on relevant property, by also bringing in the value for the SDA where these arise.聽

Before the introduction of SDAs, transfers of value made on the same day to trusts created on different days, did not form part of the notional transfer.聽

贰虫补尘辫濒别听

Fred intends to put 拢450,000 into three relevant property trusts. He creates three pilot trusts for 拢10 each on different days (trusts created on the same day would be 鈥榬elated鈥�). Sometime after, but on the same day, he makes a 鈥檆hargeable鈥� transfer of 拢149,990 into each of the trusts. Because transfers made on the same day are ignored in computing the settlors cumulative total of chargeable transfers, that total will be 拢10, 拢20, or 拢30 when the relevant addition is made, and so each trust will enjoy a full nil rate band.聽

The SDA聽

Same day additions (SDAs) form part of the hypothetical transfer for calculating the rate of Inheritance Tax (IHT) on exits, IHTA84/S66 (IHTM42114); ten year anniversaries (TYAs), IHTA84/S68 (IHTM42085); and between TYAs, IHTA84/S69 (IHTM42115), on or after 18 November 2015.鈥�

An SDA arises where the same person makes a transfer of value that:鈥�

• adds assets or value鈥�

• to two or more, new or existing trusts鈥�

• on or after 10 December 2014, and鈥�

• on the same day.鈥�

There are four important points to note about the rules for SDAs:鈥�

• The definition includes 鈥榓dditions of value鈥� to trusts as well as additions of new assets. Example: A value addition might occur where the settlor forgives a loan that was made to the trustees.鈥�

• Additions must be 鈥榯ransfers of value鈥� for IHT. So it does not matter if the additions are for IHT purposes chargeable, exempt, or are given relief. If the addition is not a transfer of value then it is not within the definition of a SDA and can be ignored. For example, the settlor鈥檚 estate may not been reduced by a transfer of excluded property.鈥�

• Not all trusts are included. That is because it is essential that a trust must have contained relevant property at some point in the period between the commencement of the trust and the point immediately after any same day transfers (IHTA84/S62A(3)). So, if a trust has always been a qualifying interest in possession trust or an 18/25 trust then transfers to these trusts can鈥檛 be within the SDA rule.鈥�

• If the trusts are related trusts (IHTM42230) the SDA rule does not apply (IHTA84/S62A(4)).鈥犫€€�

There are four exceptions to the SDA rules and they are set out in IHTA84/S62B (IHTM42234)鈥�