life interest trust

life interest trust
A type of private trust where the life tenant is entitled to receive for life or a fixed period all or a fixed share of the income generated by the trust fund. On his death, the right to trust income will pass to another or the trust may come to an end because the trust capital will be distributed to the capital beneficiaries or remaindermen.
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England, Wales
Also known as an interest in possession trust.
A trust that has a beneficiary with a life interest.
Before 22 March 2006, all life interest trusts were treated for inheritance tax (IHT) purposes as though they were owned by the beneficiary with the life interest (called the life tenant). A life interest trust created on or after 22 March 2006 will only be treated in this way if it is one of the following:
In all other cases the life interest will be taxed under the relevant property regime. A life interest is also known as an interest in possession and the principal (income) beneficiary is also known as the beneficiary with the interest in possession.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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Look at other dictionaries:

  • life interest — see interest 1 Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. life interest n …   Law dictionary

  • Life interest — A life interest (or life rent in Scotland) is some form of right under a trust which lasts only for the lifetime of the person benefiting from that right. A person with a life interest is known as a life tenant.A life interest ends when the life… …   Wikipedia

  • life tenant — n: a tenant having possession of property for the duration of his or her life: one having a life estate in property Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. life tenant …   Law dictionary

  • interest in possession — England, Wales Interest in possession (IIP) is a trust law principle that has UK taxation implications. A beneficiary of a trust has an IIP if they have the immediate right to receive the income arising from the trust property, or have the use… …   Law dictionary

  • Interest in possession trust — An interest in possession trust is a form of legal arrangement which gives a person a present right to the present enjoyment of something [ Viscount Dilhorne in Pearson v IRC [1980] STC 318 at 323] . At least one of the beneficiaries of this type …   Wikipedia

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