Maintenance Funds for heritage property

FA 1976 introduced the IHT exemption for transfers of value attributable to property transferred to a Maintenance Fund (MF). Subject to conditions, the transfer is exempt from IHT, and the MF funds are exempt from the ten-year periodic charge and from ‘exit’ charge where the funds are spent on the heritage preservation purpose. However, only 35 MFs have been created since the introduction of the exemption. The problem lies with the income tax and CGT implications of such funds, once the settlor is no longer occupying the heritage property in question. If MFs are to be made to work, both ITA 2007 s 511 and TCGA 1992 s 169D need amending.