Your guide to UK inheritance tax and trusts 20 Glossary of terms Agricultural property relief A deduction of 50% or 100% taken from the value of agricultural property in the UK, Channel Islands or Isle of Man, when it is assessed for IHT purposes. Annuity A form of investment where an individual invests a capital sum with a life assurance company in return for a regular income. Bare or absolute trust A trust where the beneficiaries are named at outset and cannot be changed at any time in the future. At age 18 the beneficiary can demand their share of the trust fund. Beneficiary Someone who will or may benefit from a trust fund or will. Bond A single premium investment product that can be set up on a whole life or capital redemption basis. Business property relief A deduction of 50% or 100% taken from the value of certain business property when it is assessed for IHT purposes. Chargeable lifetime transfer (C LT ) A transfer of value which is made by an individual and is not an exempt or potentially exempt transfer. Discretionary trust A trust where the beneficiaries can be added to and the trustees use their discretion as to when and to whom benefits may be paid. Domicile The country where the person has their permanent home, whether or not he/she actually lives there. Domicile of origin is inherited, normally from the father. Deemed UK domicile occurs where a person has been resident in the UK for at least 15 of the last 20 tax years. An individual originally UK domiciled but who achieves a change of domicile and then returns to the UK will be UK domiciled for the period of UK residence. This may be of particular importance in the assessment of a person’s liability to IHT. Entry charge When a chargeable lifetime transfer (CLT) is created, an entry charge equivalent to half the rate payable on death is paid on the transfer of any value above the available nil-rate band. Previous CLTs will affect the amount of available nil-rate band. Estate All the assets that a person owns at the time of death. For non-UK domiciled UK residents, this is limited to their UK assets for IHT purposes, except for UK residential property owned by their foreign close company or partnership.