The commercial transactions exclusion1 outlined at I3.141 makes reference to 'connected persons' and understanding this definition is key to the exclusion.
The question of whether persons are connected is determined by reference to the definitions in the CGT legislation2, but the meanings of 'relative' and 'settlement' are extended for the purposes of IHT3. If one person is connected with another, the other is connected with him4.
A person is connected with an individual if that person is the individual's husband or wife, or is a relative, or the husband or wife of a relative, of the individual or of the individual's husband or wife5. For IHT purposes only the word 'relative' is extended to include not only brothers, sisters, ancestors and lineal descendants, but also uncles, aunts, nephews, and nieces6.
The trustees of a settlement7 are, in that capacity, connected with any individual who is a settlor8
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Web page updated on 17 Mar 2025 17:28