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KembaraXtra – Legal Terms – Interest in Possession
An interest in possession exists where a person has a present right to enjoy property or its income, even though they may not own the underlying capital outright. This type of interest frequently arises in trust arrangements.
In inheritance tax law, interests in possession have significant consequences, as the property may be treated as part of the beneficiary’s estate. The classification of a trust as an interest in possession trust therefore has major fiscal implications.
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