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.