Transitional arrangements

• Lifetime gifts made by an individual between 30 October 2024 and 6 April 2026 which the donor fails to survive by 7 years will count (in chronological order) towards use of the £2.5m relief allowance if the donor dies on or after 6th April 2026.
• Special rules apply to a ‘pre-commencement trust’ which immediately prior to 30 October held qualifying assets (ignoring for this purpose whether any relevant 2-year or 7-year ownership/occupation period had yet been met).
• A pre-commencement trust will:

○ have its own £2.5m relief allowance (i.e. even if the same settlor creates further trusts post 30 October 2024); ○ be brought into the new regime involving application of the relief cap on the next TYA which falls on or after 6 April 2026 in respect of complete quarters falling on or after 6 April 2026; ○ enjoy unlimited 100% relief from exit charges on capital leaving the trust before the next post 6th April 2026 TYA.

• A trust can be a pre-commencement trust even if not subject to the relevant property regime of TYA and exit charges immediately prior to 30 October 2024 (because of a qualifying interest in possession which later comes to an end, for example).
• For trusts settled on or after 30 October 2024:

○ the £2.5m relief allowance will not be used up by any exits made prior to 6 April 2026 ○ on calculation of the next 10-year anniversary charge, use of the allowance will only be relevant in relation to complete quarters falling on or after 6 April 2026.