The bare necessities for minor beneficiaries

Question: When is a bare trust not a bare trust? Answer: According to HM Revenue & Customs (HMRC), when it is a trust for a minor beneficiary. Schedule 20 to the Finance Act 2006 made significant changes to the inheritance tax (IHT) treatment of interest in possession and accumulation and maintenance settlements. However, the new rules do not apply to bare trusts, that is trusts that are inflexible and where the beneficiaries have an absolute interest that cannot be taken away. This means a gift to a bare trust is still a potentially exempt transfer (Pet) and not a chargeable lifetime t...