Finance Act 1975

• (f) any certified contractual savings scheme within the meaning of section 415 of the Taxes Act;

is domiciled in the Channel Islands or the Isle of Man the rights are excluded property.

• (2) Section 45 of this Act does not apply for the purposes of this paragraph.

Visiting forces and staff of allied headquarters

6

• (1) The emoluments paid by the Government of any designated country to a member of a visiting force of that country, not being a citizen of the United Kingdom and colonies, are excluded property.

• (2) Any tangible movable property the presence of which in the United Kingdom is due solely to the presence in the United Kingdom of any such member of a visiting force as is referred to in sub-paragraph (1) above while serving as a member of the force is excluded property.

• (3) A period during which any such member of a visiting force as is referred to in sub-paragraph (1) above is in the United Kingdom by reason solely of his being such a member shall not be treated for the purposes of tax as a period of residence in the United Kingdom or as creating a change of his residence or domicile.

• (4) In the foregoing provisions of this paragraph, references to a visiting force shall apply to a civilian component of a visiting force as they apply to the force itself, and those provisions shall be construed as one with Part I of the Visiting Forces Act 1952, but so that for the purposes of this paragraph references to a designated country shall be substituted in that Act for references to a country to which a provision of that Act applies.

• (5) For the purpose of conferring on persons attached to any designated allied headquarters the like benefits as are conferred by sub-paragraphs (1) to (3) above on members of a visiting force or civilian component, any members of the armed forces of a designated country shall, while attached to any such headquarters, be deemed to constitute a visiting force of that country, and there shall be a corresponding extension of the class of persons who may be treated as members of a civilian component of such a visiting force.

• (6) In the case of persons of any category for the time being agreed between Her Majesty's Government in the United Kingdom and the other members of the North Atlantic Council, employment by a designated allied headquarters shall be treated for the purposes of sub-paragraphs (2) and (3) above as if it were service as a member of a visiting force of a designated country.

• (7) For the purposes of this paragraph—

• " allied headquarters " means any international military headquarters established under the North Atlantic Council;

• " designated " means designated for the purpose in question by or under any Order in Council made for giving effect to any international agreement.

• (8) Any Order in Council under this paragraph may be varied or revoked by a subsequent Order in Council.

• (9) Any Order in Council made under section 73 of the Finance Act 1960 which is in force immediately before the passing of this Act shall have effect for the purposes of this paragraph as if it had also been made under this paragraph, and may be varied or revoked accordingly.

Double taxation relief

7

• (1) If Her Majesty by Order in Council declares that arrangements specified in the Order have been made with the government of any territory outside the United Kingdom with a view to affording relief from double taxation in relation to capital transfer tax payable under the laws of the United Kingdom and any tax imposed under the laws of that territory which is of a similar character or is chargeable on or by reference to death or gifts inter vivos, and that it is expedient that those arrangements should have effect, the arrangements shall, notwithstanding anything in this Part of this Act, have effect so far as they provide for relief from capital transfer tax, or for determining the place where any property is to be treated as situated for the purposes of the tax.

• (2) Any arrangements to which effect is given under this paragraph may include provision for relief in cases occurring before the making of the arrangements and provisions as to property which is not itself subject to double taxation.

• (3) Any Order in Council made under this paragraph may be revoked by a subsequent Order in Council, and any such revoking Order may contain such transitional provisions as appear to Her Majesty to be necessary or expedient.

• (4) An Order under this paragraph shall not be submitted to Her Majesty in Council unless a draft of it has been laid before the House of Commons and approved by it by resolution.

• (5) Where any arrangements have effect by virtue of this paragraph, no obligation as to secrecy shall prevent the Board or an authorised officer of the Board from disclosing to any authorised officer of the government with which the arrangements are made such information as is required to be disclosed under the arrangements.

• (6) Where, under any Order in Council made or having effect as made under section 54 of the Finance (No. 2) Act 1945 or section 2 of the Finance Act (Northern Ireland) 1946 and having effect immediately before the passing of this Act, arrangements with the government of any territory outside the United Kingdom are specified, the Order shall, notwithstanding the repeal of that section, remain in force and have effect as if any provision made by those arrangements in relation to estate duty extended to capital transfer tax chargeable by virtue of section 22 of this Act, and nothing in section 45 of this Act shall be taken to affect the interpretation of any such provision ; but the Order may be amended or revoked by an Order in Council made under this paragraph.

8

Where the Board are satisfied that in any territory outside the United Kingdom any amount of tax chargeable by reason of any disposition or other event is attributable to the value of any property situated in that territory, then, if that tax is of a character similar to that of capital transfer tax or is chargeable on or by reference to death or gifts inter vivos and any capital transfer tax chargeable by reference to the same disposition or other event is also attributable to the value of that property, they shall allow a sum equal to the first-mentioned amount as a credit against that capital transfer tax.

SCHEDULE 8

Part I

Nature of relief

1

• (1) Where the value transferred by a chargeable transfer is determined by reference to the value of agricultural property in the United Kingdom and the conditions stated in paragraph 3 below are satisfied, then, if—

• (a) the value transferred would be reduced if computed in accordance with paragraph 2 below ; and

• (b) a person liable to pay the whole or part of the tax on the value transferred makes a claim in that behalf to the Board within two years of the transfer or such longer time as the Board may allow;

the value transferred shall be so computed and tax shall be chargeable accordingly, but subject to the limit imposed by paragraph 5 below.

• (2) The conditions stated in paragraph 3 below shall be deemed to be satisfied with respect to a transfer of value (in this sub-paragraph referred to as the current transfer) if—

• (a) not more than two years before the current transfer there was (or would have been had this Act then been in force) a transfer of value ; and

• (b) the value transferred by the earlier transfer was or would have been determined by reference to the value of the same agricultural property as in the case of the current transfer; and

• (c) the conditions stated in paragraph 3 below were or would have been satisfied with respect to the earlier transfer; and

• (d) the agricultural property was, at the time of the current transfer, occupied for the purposes of agriculture by the transferor or by the personal representatives of the person who was or would have been the transferor in relation to the earlier transfer.

• (3) In the following provisions of this Part of this Schedule " the unreduced value ", in relation to a chargeable transfer, means the value transferred, calculated before the reduction and as if no tax were chargeable on it.

2

Where the value transferred is to be computed in accordance with this paragraph there shall first be ascertained such part of the unreduced value as is attributable to the agricultural value of the agricultural property (in this Part of this Schedule referred to as the part eligible for relief) and the value transferred shall then be computed as if the part eligible for relief were reduced by applying to it the fraction of which—

• (a) the numerator is the multiplied rental value of the agricultural property; and

• (b) the denominator is the agricultural value of the agricultural property.

Conditions for relief

3

• (1) The conditions referred to in paragraph 1(1) above are—

• (a) that the transferor was, in not less than five of the seven years ending with 5th April immediately preceding the transfer, wholly or mainly engaged in the United Kingdom in any of the capacities mentioned in sub-paragraph (2) below (or partly in one of them and partly in another or others); and

• (b) subject to paragraph 4 below, that the agricultural property was at the time of the transfer occupied by him for the purposes of agriculture and either was so occupied by him throughout the two years immediately preceding the transfer or replaced other agricultural property and was so occupied by him for a period which, when added to any period during which he so occupied the replaced property, comprised at least two years in the five years immediately preceding the transfer.

• (2) The capacities referred to in sub-paragraph (1) above are those of—

• (a) a person who carries on farming as a trade either alone or in partnership;

• (b) a person employed in farming carried on as a trade by another person;

• (c) a director of a company carrying on farming in the United Kingdom as its main activity ; or

• (d) a person undergoing full-time education.

• (3) Where not less than 75 per cent, of the transferor's relevant income was immediately derived by him from his engagement in agriculture in the United Kingdom, the condition in sub-paragraph (1)(a) above shall be taken to be satisfied ; and for this purpose—

• (a) "relevant income" is the aggregate of income in any five of the last seven years of assessment immediately preceding the transfer which is earned income for the purposes of income tax other than income from a pension, superannuation or other allowance, deferred pay or compensation for loss of office ; and

• (b) the question what was the transferor's income shall be determined without regard to section 37 of the Taxes Act (aggregation of wife's income).

• (4) Where the agricultural property had, at some time before the transfer, been occupied by the transferor for the purposes of agriculture and was, throughout the period between that time and the transfer, so occupied by a member of his family, the conditions in sub-paragraph (1) above shall be treated as satisfied if they would have been satisfied had the transfer occurred at that time.

• (5) Where the condition in sub-paragraph (1)(b) above is satisfied but the agricultural property which was occupied by the transferor at the time of the transfer was not occupied by him for the purposes of agriculture throughout the two years immediately preceding the transfer, then if the agricultural property which it replaced had, at the time when it ceased to be so occupied, a lower agricultural value than the first-mentioned property had at the time when it was first so occupied, the part eligible for relief shall be ascertained as if the agricultural value of the first-mentioned property were reduced by applying to it the fraction of which—

• (a) the numerator is that lower agricultural value ; and

• (b) the denominator is the agricultural value which the first-mentioned property then had.

• (6) For the purposes of sub-paragraph (1) above, where the transferor became entitled to the agricultural property on the death of another person—

• (a) his occupation of the agricultural property shall be deemed to have begun on the death of that person ; and

• (b) if that other person was the transferor's spouse and the condition stated in sub-paragraph (1)(a) above was at the time of the death satisfied with respect to the spouse, it shall be treated as having then been satisfied with respect to the transferor.

• (7) For the purposes of sub-paragraph (1) above occupation by a company which is controlled by the transferor shall be treated as occupation by the transferor; and for this purpose the question whether any company is controlled by the transferor shall be determined as for the purposes of paragraph 13 of Schedule 4 to this Act.

• (8) For the purposes of this paragraph, occupation of any property by a Scottish partnership shall, notwithstanding section 4(2) of the Partnership Act 1890, be treated as occupation of it by the partners.

• (9) For the purposes of sub-paragraph (4) above, a person is a member of the transferor's family if he is the transferor's spouse or a relative of the transferor or of the transferor's spouse or is the spouse of such a relative ; and " relative " means ancestor, lineal descendant, brother, sister, uncle, aunt, nephew or niece, " spouse" includes former spouse, and an adopted person shall be treated as the child of the person or persons by whom he was adopted and an illegitimate person as the child of his mother and reputed father.

Companies

4

So far as the value transferred is determined by reference to the value of shares in or debentures of a company it shall be taken for the purposes of this Schedule to be determined by reference to the value of any agricultural property if and only if—

• (a) the agricultural property forms part of the company's assets and part of the value of the shares or debentures can be attributed to the agricultural value of the agricultural property ; and

• (b) the shares or debentures gave the transferor control of the company immediately before the transfer (the question whether they did so being determined as for the purposes of paragraph 13 of Schedule 4 to this Act); and

• (c) the main activity of the company is, and has been throughout the two years immediately preceding the transfer, farming in the United Kingdom ; and

• (d) the agricultural property was at the time of the transfer occupied by the company for the purposes of farming and either was so occupied by it throughout the two years immediately preceding the transfer or replaced other agricultural property and was so occupied by it for a period which, when added to any period during which it so occupied the replaced property, comprised at least two years in the five years immediately preceding the transfer ;

and the condition stated in paragraph (d) above shall replace that stated in paragraph 3(1)(b) above, and the references to that paragraph and to the transferor in paragraph 3(5) above shall be construed accordingly.

Limitation of relief

5

• (1) Relief under this Part of this Schedule shall be given only to the extent that either—

• (a) the part eligible for relief, when added to the part eligible for relief under any previous chargeable transfer made by the same transferor, does not exceed £250,000 ; or

• (b) the area of the agricultural property by reference to which the relief is given, together with that of any agricultural property by reference to which relief was given under previous chargeable transfers made by the same transferor, does not exceed one thousand acres.

• (2) For the purposes of sub-paragraph (1)(b) above—

• (a) where the transferor and some other person were together beneficially entitled to the agricultural property by reference to which the relief is given, the area of the property shall be taken to be such part thereof as corresponds to the transferor's share ; and

• (b) where the agricultural property by reference to which the relief is given forms part of the assets of a company, the area of the property shall be taken to be such part thereof as corresponds to the proportion which the value of the shares and debentures first mentioned in paragraph 4 above bears to the value of all the shares in and debentures of the company.

• (3) For the purposes of this paragraph chargeable transfers made by the same person on the same day shall be treated as one ; and where the relief that could otherwise be given in respect of a chargeable transfer exceeds the limit imposed by this paragraph the excess shall be attributed to the agricultural properties concerned in proportion to their respective agricultural values or areas.

Farming

6

In this Schedule " farming " has the meaning which it would have in the Tax Acts if in those Acts " farm land " included market garden land; and for the purposes of this Schedule the question whether a person carries on farming as a trade shall be determined as for the purposes of income tax or, as the case may be, corporation tax.

Agricultural property

7

In this Schedule " agricultural property" means agricultural land or pasture and includes woodland if occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture ; and also includes such cottages, farm buildings and farm-houses, together with the land occupied with them, as are of a character appropriate to the property.

Agricultural value

8

For the purposes of this Schedule the agricultural value of any agricultural property shall be taken to be the value which would be the value of the property if the property were subject to a perpetual covenant prohibiting its use otherwise than as agricultural property.

Multiplied rental value

9

• (1) For the purposes of this Schedule the multiplied rental value of any agricultural property in Great Britain is twenty times its rental value as defined below or such other multiple of that rental value as the Treasury may from time to time by order made by statutory instrument prescribe.

• (2) The rental value of any agricultural property in Great Britain is the annual rent at which the property might reasonably be expected to be let with vacant possession as an agricultural holding if the landlord undertook to bear the cost of insurance and of repairs to buildings and fixed equipment so far as such cost is not normally borne by a tenant.

• (3) The multiplied rental value of agricultural property in Northern Ireland is seven-tenths or such fraction of its agricultural value as the Treasury may from time to time by order made by statutory instrument prescribe.

• (4) The fraction to be prescribed by an order under sub-paragraph (3) above shall be such as appears to the Treasury to represent the average of reductions made under paragraph 2 above in the case of agricultural property in Great Britain in the last period of twelve months preceding the making of the order which is a period for which information adequate for ascertaining that average is available, but taking into account any order under sub-paragraph (1) above.

• (5) If the fraction first prescribed by an order under sub-paragraph (3) above is less than seven-tenths that sub-paragraph shall be deemed always to have had effect as if that fraction had been specified therein instead of seven-tenths; and so much of any tax paid as would not then have been chargeable shall be repaid.

• (6) No order shall be made under this paragraph unless a draft of it has been laid before and approved by a resolution of the House of Commons.

Channel Islands and Isle of Man

10

This Part of this Schedule applies in relation to land or activities carried on in the Channel Islands or the Isle of Man as if the land were situated or the activities were carried on in the United Kingdom ; and the multiplied rental value of agricultural property in the Channel Islands or the Isle of Man shall be the same fraction of its agricultural value as in the case of agricultural property in Northern Ireland.

Saving

11

Nothing in this Part of this Schedule shall be taken to apply to the value included under section 22(5) of this Act in the value of a person's estate immediately before his death.

Part II — Estate Duty

Nature of relief

12

Where the estate chargeable with estate duty on the death of a person dying after 12th November 1974 comprises agricultural property, other than agricultural property included (under section 2(1)(b)(i) or 2(1)(c) of the Finance Act 1894) by reason of an interest which came to an end or a gift which was made before 13th November 1974, then, if the conditions stated in paragraph 3 above (as modified by paragraph 16 below) are satisfied and—

• (a) the principal value of the agricultural property would be reduced if computed in accordance with paragraph 13 below ; and

• (b) the person accountable for estate duty in respect of the agricultural property makes a claim in that behalf to the Board within six months of the passing of this Act or such longer time as the Board may allow ;

the principal value of that property shall be so computed and estate duty charged accordingly, but subject to the limit imposed by paragraph 15 below.

13

• (1) Where the principal value of any agricultural property is to be computed in accordance with this paragraph it shall be computed, subject to sub-paragraph (2) below, as if the agricultural value of the property were equal to its multiplied rental value.

• (2) Where paragraph 3(5) above (as modified by paragraph 16 below) applies the principal value of the agricultural property shall be computed as if it were reduced by such proportion of the difference between it and the multiplied rental value of the property as is equal to the fraction mentioned in that paragraph.

Companies

14

Where an estate comprises shares in or debentures of a company the principal value of which falls to be estimated in accordance with section 55 of the Finance Act 1940 or section 15 of the Finance (No. 2) Act (Northern Ireland) 1946, and the conditions stated in sub-paragraphs (a), (c) and (d) of paragraph 4 above (as modified by paragraph 16 below) are satisfied with respect to the company, any agricultural property and the shares or debentures, paragraphs 12 and 13 above shall apply, with the necessary modifications, in relation to the principal value of the shares or debentures, and estate duty chargeable in respect thereof.

Limitation of relief

15

Relief under this Part of this Schedule shall be given only to the extent that either—

• (a) the agricultural value of the agricultural property does not exceed £250,000 or

• (b) the area of the agricultural property does not exceed one thousand acres.

Supplementary

16

• (1) For the purposes of relief under this Part of this Schedule—

• (a) paragraphs 3, 4 and 5(2) above shall apply as if for references to the transferor and the transfer there were substituted references to the deceased and his death ;

• (b) paragraph 3(5) above shall apply with the further modification specified in sub-paragraph (2) below ;

• (c) paragraph 5(2) above shall apply for the purposes of paragraph 15 above ; and

• (d) paragraph 9(5) above shall apply as if for the reference to tax there were substituted a reference to estate duty.

• (2) For the purposes of relief under this Part of this Schedule paragraph 3(5) above shall apply as if it required the principal value of the agricultural property to be computed in accordance with paragraph 13(2) above.

SCHEDULE 9

Nature of relief

1

• (1) Subject to the following provisions of this Schedule, where any part of the value of a person's estate immediately before his death is attributable to the value of land in the United Kingdom on which trees or underwood are growing but which is not agricultural property within the meaning of Schedule 8 to this Act, and the conditions stated in paragraph 5 below are satisfied, then, if the person liable for the whole or part of the tax so elects—

• (a) the value of the trees or underwood shall be left out of account in determining the value transferred on the death ; but

• (b) tax shall be charged in the circumstances mentioned in paragraph 2 below in accordance with paragraph 3 below.

• (2) An election under this paragraph must be made by notice in writing to the Board within two years of the death or such longer time as the Board may allow.

Tax chargeable on disposal of trees or underwood

2

• (1) Subject to the following provisions of this paragraph, where, under paragraph 1 above, the value of any trees or underwood has been left out of account in determining the value transferred on the death of any person, and the whole or any part of the trees or underwood is disposed of, whether together with or apart from the land on which they were growing, then, if the disposal occurs before any part of the value transferred on the death of any other person is attributable to the value of that land, tax shall be charged in accordance with paragraph 3 below.

• (2) The person liable for the tax chargeable under this paragraph shall be the person who is entitled to the proceeds of the sale or would be so entitled if the disposal were a sale.

• (3) Sub-paragraph (1) above does not apply to a disposal made by any person to his spouse.

• (4) Where tax has been charged under this paragraph on the disposal of any trees or underwood tax shall not again be charged in relation to the same death on a further disposal of the same trees or underwood.

Basis and rate of tax chargeable under paragraph 2

3

Where the value of any trees or underwood has been left out of account in determining the value transferred on the death of any person and tax is chargeable under paragraph 2 above on a disposal of the trees or underwood, it shall be charged on the following amount, namely.—

• (a) if the disposal is a sale for full consideration in money or money's worth, on the net proceeds of the sale ; and

• (b) in any other case, on the net value, at the time of the disposal, of the trees or underwood ;

and at the rate or rates at which it would have been chargeable on that death if that amount, and any amount on which tax was previously chargeable under that paragraph in relation to the death, had been included in the value transferred on death and the amount on which the tax is chargeable had formed the highest part of that value.

Credit for tax charged under paragraph 2

4

Where a disposal on which tax is chargeable under paragraph 2 above is a chargeable transfer, the value transferred by it shall be calculated as if the value of the trees or underwood had been reduced by the tax chargeable under that paragraph.

Conditions of relief

5

• (1) The conditions referred to in paragraph 1 above are that the deceased either was beneficially entitled to the land throughout the five years immediately preceding his death or became beneficially entitled to it otherwise than for a consideration in money or money's worth and, subject to sub-paragraph (2) below, that—

• (a) if the land is situated in Great Britain, the land is managed in accordance with a plan approved by the Forestry Commissioners under a forestry dedication covenant or forestry dedication agreement within the meaning of the Forestry Act 1967; and

• (b) if the land is situated in Northern Ireland, either a grant with respect to the land has been made under section 2 of the Forestry Act (Northern Ireland) 1953 or the land is managed in accordance with a plan approved under section 3(1)(c) of that Act in connection with the Planting and Maintenance of Woodlands Scheme administered by the Department of Agriculture for Northern Ireland for the purposes of those sections.

• (2) In the case of a person dying before 1st January 1976 paragraphs (a) and (b) of sub-paragraphs (1) above do not apply and, in the case of a person dying before 1st January 1981—

• (a) the condition in sub-paragraph (1)(a) above shall be deemed to be satisfied if a forestry dedication covenant or a forestry dedication agreement in respect of the land has been offered to the Forestry Commissioners and the offer has not been refused ; and

• (b) the condition in sub-paragraph (1)(b) above shall be taken to be satisfied if a grant has been applied for or a plan for the management of the land has been submitted to the Department of Agriculture for Northern Ireland for approval and the application or approval has not been refused.

Interpretation

6

• (1) In this Schedule—

• (a) references to the value transferred on a death are references to the value transferred by the chargeable transfer made on that death ;

• (b) references to the net proceeds of sale or the net value of any trees or underwood are references to the proceeds of sale or value after deduction of any expenses allowable under this Schedule so far as those expenses are not allowable for the purposes of income tax ; and

• (c) references to the disposal of any trees or underwood include references to the disposal of any interest in the trees or underwood (and references to a disposal of the same trees or underwood shall, where the case so requires, be construed as referring to a disposal of the same interest).

• (2) The expenses allowable under this Schedule are, in relation to any trees or underwood the value of which has been left out of account on any death.—

• (a) the expenses incurred in disposing of the trees or underwood ; and

• (b) the expenses incurred in replanting within three years of a disposal to replace the trees or underwood disposed of; and

• (c) the expenses incurred in replanting to replace trees or under wood previously disposed of, so far as not allowable on the previous disposal.

SCHEDULE 10

PART I — —General

Liabilities

1

• (1) Except as otherwise provided by this Part of this Act, in determining the value of a transferor's estate at any time his liabilities at that time shall be taken into account.

• (2) The liabilities to be taken into account in determining the value of a transferor's estate immediately after a transfer of value include his liability for tax on the value transferred but not his liability (if any) for any other tax or duty resulting from the transfer ; and in computing his liability for tax—

• (a) no allowance shall be made for the fact that the tax will not be due immediately ; and

• (b) any tax recovered otherwise than from the transferor or from a person liable for it under section 25(8) of this Act shall be treated as having been paid in discharge of a liability in respect of which the transferor had a right to reimbursement.

• (3) Except in the case of a liability imposed by law, a liability incurred by the transferor shall be taken into account only to the extent that it was incurred for a consideration in money or money's worth.

• (4) Subject to sub-paragraph (2) above, where a liability falls to be discharged after the time at which it is to be taken into account it shall be valued as at the time at which it is to be taken into account.

• (5) A liability in respect of which there is a right to reimbursement shall be taken into account only to the extent (if any) that reimbursement cannot reasonably be expected to be obtained.

2

A liability which is an incumbrance on any property shall, so far as possible, be taken to reduce the value of that property.

3

Where a liability taken into account is a liability to a person resident outside the United Kingdom which neither—

• (a) falls to be discharged in the United Kingdom ; nor

• (b) is an incumbrance on property in the United Kingdom,

it shall, so far as possible, be taken to reduce the value of property outside the United Kingdom.

Tax on capital gains borne by donee

4

• (1) Where a chargeable transfer is or includes a disposal of an asset and on the disposal a gain accrues to the transferor for the purposes of Part III of the Finance Act 1965, then, if—

• (a) the whole or part of the gain is a chargeable gain or a development gain ; and

• (b) the whole or part of any capital gains tax or income tax chargeable on the gain is borne by the donee (within the meaning of paragraph 19 of Schedule 7 to that Act);

the amount of the tax so borne shall be treated as reducing the value transferred by the chargeable transfer.

• (2) Where the chargeable transfer is made under Schedule 5 to this Act, sub-paragraph (1) above shall have effect as if for the reference to the transferor there were substituted a reference to the trustee.

Restriction on freedom to dispose

5

• (1) Where, by a contract made at any time, the right to dispose of any property has been excluded or restricted, then, in determining the value of the property for the purpose of the first relevant event happening after that time.—

• (a) the exclusion or restriction shall be taken into account only to the extent (if any) that consideration in money or money's worth was given for it; but

• (b) if the contract was a chargeable transfer or was part of associated operations which together were a chargeable transfer, an allowance shall be made for the value transferred thereby (calculated as if no tax had been chargeable on it) or by so much thereof as is attributable to the exclusion or restriction.

• (2) Where the contract was-made before 27th March 1974 sub-paragraph (1) above applies only if the first relevant event is a transfer made on death.

• (3) In this paragraph " relevant event", in relation to any property, means—

• (a) a chargeable transfer in the case of which the whole or part of the value transferred is attributable to the value of the property ; and

• (b) anything which would be such a chargeable transfer but for this paragraph.

Incidental expenses incurred by transferor

6

In determining the value transferred by a transfer of value, expenses incurred by the transferor in making the transfer (but not his liability for tax)—

• (a) shall, if borne by him, be left out of account;

• (b) shall, if borne by a person benefiting from the transfer be treated as reducing the value transferred.

Valuation of related property

7

• (1) Where the value of any property comprised in a person's estate would be less than the appropriate portion of the value of the aggregate of that and any related property, it shall be the appropriate portion of the value of that aggregate.

• (2) For the purposes of this paragraph, property is related to the property comprised in a person's estate if—

• (a) it is comprised in the estate of his spouse ; or

• (b) it is, or is part of, the property comprised in a settlement made by him or his spouse before 27th March 1974, and no interest in possession subsists in that property or part.

• (3) The appropriate portion of the value of the aggregate mentioned in sub-paragraph (1) above is such portion thereof as would be attributable to the value of the first-mentioned property if the value of that aggregate were equal to the sums of the values of that and any related property, the value of each property being determined as if it did not form part of that aggregate.

• (4) For the purposes of sub-paragraph (3) above the proportion which the value of a smaller number of shares of any class bears to the value of a greater number thereof shall be taken to be that which the smaller number bears to the greater; and similarly with stock, debentures and units of any other description of property.

• (5) Shares shall not be treated for the purposes of sub-paragraph (4) above as being of the same class unless they are so treated by the practice of a recognised stock exchange or would be so treated if dealt with on such a stock exchange.

Value of lessor's interest

8

Where, under paragraph 1(3) of Schedule 5 to this Act, a lease of property is to be treated as a settlement, the value of the lessor's interest in the property shall be taken to be such part of the value of the property as bears to it the same proportion as the value of the consideration, at the time the lease was granted, bore to what would then have been the value of a full consideration in money or money's worth.

Value transferred on death

9

• (1) In determining the value of a person's estate immediately before his death—

• (a) changes in the value of his estate which have occurred by reason of the death and fall within sub-paragraph (2) below shall be taken into account as if they had occurred before the death; and

• (b) allowance shall be made for reasonable funeral expenses; and

• (c) where there is a liability to make payments or transfer assets under such a disposition as is mentioned in section 40 of this Act, the liability shall be computed as if the amount or value of the payments or assets were reduced by the chargeable portion thereof (as defined in that section); and

• (d) an allowance against the value of property situated outside the United Kingdom shall be made for any expense incurred in administering or reallsing the property which is shown to be attributable to the situation of the property, but the allowance shall not exceed five per cent, of the value of the property.

• (2) A change falls within this sub-paragraph if it is an addition to the property comprised in the estate or an increase or decrease of the value of any property so comprised; but the termination on the death of any interest or the passing of any interest by survivorship does not fall within this sub-paragraph.

• (3) Part II of this Schedule shall apply with respect to the valuation of qualifying investments (as defined in that Part) which are comprised in a person's estate immediately before his death and are sold by the appropriate person (as so defined) within the period of twelve months immediately following the date of the death.

Value of amounts due

10

In determining the value of a right to receive a sum due under any obligation it shall be assumed that the obligation will be duly discharged, except if or to the extent that recovery of the sum is impossible or not reasonably practicable and has not become so by any act or omission of the person to whom the sum is due.

Value of life policies, etc.

11

• (1) Subject to the following provisions of this paragraph, in determining in connection with a transfer of value the value of a policy of insurance on a person's life or of a contract for an annuity payable on a person's death, that value shall be taken to be not less than—

• (a) the total of the premiums or other consideration which, at any time before the transfer of value, has been paid under the policy or contract or any policy or contract for which it was directly or indirectly substituted ; less

• (b) any sum which, at any time before the transfer of value, has been paid under, or in consideration for the surrender of any right conferred by, the policy or contract or a policy or contract for which it was directly or indirectly substituted.

• (2) Sub-paragraph (1) above does not apply where the transfer of value is made on the death of the person whose life was insured or, as the case may be, on whose death the annuity is payable.

• (3) Sub-paragraph (1) above does not apply where the policy is one under which the sum assured becomes payable only if the person whose fife is insured dies before the expiry of a specified term or both before the expiry of a specified term and during the life of a specified person and which, if that specified term ends, or can, under the policy, be extended so as to end, more than three years after the making of the insurance, satisfies the condition that, if neither the person whose life is insured nor the specified person dies before the expiry of the specified term—

• (a) the premiums are payable during at least two-thirds of that term and at yearly or shorter intervals ; and

• (b) the premiums payable in any one period of twelve months are not more than twice the premiums payable in any other such period.

• (4) Where the policy is one under which—

• (a) the benefit secured is expressed in units the value of which is published and subject to fluctuation ; and

• (b) the payment of each premium secures the allocation to the policy of a specified number of such units ;

then, if the value, at the time of the transfer of value, of the units allocated to the policy on the payment of premiums is less than the aggregate of what the respective values of those units were at the time of allocation, the value to be taken under sub-paragraph (1) above as a minimum shall be reduced by the amount of the difference.

Farm cottages

12

In determining the value of any agricultural property which includes cottages occupied by persons employed solely for agricultural purposes in connection with the property, no account shall be taken of any value attributable to the fact that the cottages are suitable for the residential purposes of persons not so employed.

Open market price of unquoted shares and securities

13

• (1) In determining the price which unquoted shares or securities might reasonably be expected to fetch if sold in the open market it shall be assumed that in that market there is available to any prospective purchaser of the shares or securities all the information which a prudent prospective purchaser might reasonably require if he were proposing to purchase them from a willing vendor by private treaty and at arm's length.

• (2) In this paragraph " unquoted shares or securities " means shares or securities which are not quoted on a recognised stock exchange.

PART II — —Valuation of Certain Securities Sold Within Twelve Months of Death

Interpretation

14

• (1) In this Part of this Schedule—

• " the appropriate person ", in relation to any qualifying investments comprised in a person's estate immediately before his death, means the person liable for tax attributable to the value of those investments or, if there is more than one such person, and one of them is in fact paying the tax, that person;

• " the loss on sale " means the amount determined in accordance with paragraph 15 below ;

• " qualifying investments " means shares or securities which at the date of the death in question are quoted on a recognised stock exchange, holdings in a unit trust which at that date is an authorised unit trust (as denned in section 358 of the Taxes Act) and shares in any common investment fund established under section 1 of the Administration of Justice Act 1965 ;

• " relevant proportion ", in relation to the investments to which a claim relates, or any of them, means the proportion by which the loss on sale is reduced under paragraph 17 below;

• " sale value ", in relation to any qualifying investments, means their value for the purposes of paragraph 15(b) below ;

• " value on death ", in relation to any qualifying investments, means their value for the purposes of paragraph 15(a) below.

• (2) Any reference in this Part of this Schedule to the investments to which a claim relates is a reference to all the qualifying investments which, on the making of the claim, are taken into account under paragraph 15 below in determining the loss on sale.

The relief

15

On a claim being made in that behalf by the appropriate person there shall be determined for the purposes of this Part of this Schedule the amount (if any) by which—

• (a) the aggregate of the values which, apart from this Part of this Schedule, would be the values for the purposes of tax of all the qualifying investments comprised in a person's estate immediately before his death which are sold by the appropriate person within the period of twelve months immediately following the date of the death

exceeds

• (b) the aggregate of the values of those investments at the time they were so sold, taking the value of any particular investments for this purpose as the price for which they were so sold or, if it is greater, the best consideration which could reasonably have been obtained for them at the time of the sale.

16

Subject to the following provisions of this Part of this Schedule, in determining the tax chargeable on the death in question, the value of the investments to which the claim relates shall be treated as reduced by an amount equal to the loss on sale.

17

Subject to paragraph 18 below, if a claim is made under this Part of this Schedule and, at any time during the period beginning on the date of the death in question and ending two months after the date of the last sale made as mentioned in paragraph 15(a) above, the person making the claim purchases any qualifying investments in the same capacity as that in which he makes the claim, the loss on sale of the investments to which the claim relates shall be treated for the purposes of paragraph 16 above as reduced by the proportion which the aggregate of the purchase prices of all the qualifying investments so purchased bears to the aggregate of the values referred to in paragraph 15(b) above (or, if the aggregate of those purchase prices equals or exceeds the aggregate of those values, the loss on sale shall be extinguished).

18

• (1) If a claim is made under this Part of this Schedule by any person in a capacity other than that of personal representative or trustee—

• (a) paragraph 17 above shall have effect in his case as if for the words " in the same capacity as that in which he makes the claim" there were substituted the words " otherwise than in the capacity of personal representative or trustee " , and

• (b) no account shall be taken under that paragraph of any qualifying investments purchased by him unless they are of the same description as one of the qualifying investments to which the claim relates.

• (2) For the purposes of this paragraph and the following paragraphs, two investments, not being investments in an authorised unit trust or common investment fund, shall not be treated as of the same description if they are separately quoted on a recognised stock exchange, and an investment in one authorised unit trust or common investment fund shall not be treated as of the same description as an investment in another authorised unit trust or common investment fund.

The appropriate person

19

For the purposes of this Part of this Schedule—

• (a) the personal representatives of the deceased, and

• (b) the trustees of a settlement,

shall each be treated as a single and continuing body of persons (distinct from the persons who may from time to time be the personal representatives or trustees).

20

A claim made by the appropriate person under paragraph 15 above shall specify the capacity in which he makes the claim, and any reference in the preceding provisions of this Part of this Schedule to qualifying investments which are sold by him is a reference to investments which, immediately before their sale, were held by him in the capacity in which he makes the claim.

Valuation on sale and purchase

21

In any case where, for the purposes of this Part of this Schedule, it is necessary to determine the price at which any investments were purchased or sold or the best consideration that could reasonably have been obtained on the sale of any investments, no account shall be taken of expenses (whether by way of commission, stamp duty or otherwise) which are incidental to the sale or purchase.

22

• (1) Subject to sub-paragraph (2) below, for the purposes of this Part of this Schedule where any investments are sold or purchased by the appropriate person the date on which they are so sold or purchased shall be taken to be the date on which he entered into a contract to sell or purchase the investments.

• (2) If the sale or purchase of any investments by the appropriate person results from the exercise (whether by him or by any other person) of an option, then, for the purposes of this Part of this Schedule, the date on which the investments are sold or purchased shall be taken to be the date on which the option was granted.

Value of part of a fund

23

• (1) In any case where—

• (a) part only of a holding of qualifying investments is comprised in a person's estate, and

• (b) investments included in that holding are sold by the appropriate person within the period of twelve months immediately following the date of the death,

this Part of this Schedule shall apply as if the entirety of the holding were comprised in the estate and, if a claim is made under paragraph 15 above in respect of the investments referred to in paragraph (b) above, the taxable fraction of the value of the investments to which the claim relates, as determined under this Part of this Schedule, shall be the value of that part of those investments which is comprised in the estate.

• (2) In sub-paragraph (1) above, " taxable fraction" means the fraction of which the numerator is the value, as determined apart from this Part of this Schedule, of the part of the holding referred to in paragraph (a) of that sub-paragraph and the denominator is the value, as so determined, of the entirety of that holding.

Exchanges of qualifying investments

24

• (1) Subject to sub-paragraph (3) below, if, within the period of twelve months immediately following the date of the death in question, the appropriate person exchanges (with or without any payment by way of equality of exchange) any qualifying investments comprised in the deceased's estate immediately before his death, then, regardless of the nature of the property taken in exchange, if the market value of those investments is at the date of the exchange greater than their value on death, they shall be treated for the purposes of this Part of this Schedule as having been sold at the date of the exchange for a price equal to that market value.

• (2) For the purposes of this paragraph, the market value of any investments at any time means the value which they would (apart from this Part of this Schedule) have for the purposes of tax if they were comprised in the estate of a person who died at that time.

• (3) This paragraph does not apply in any case where the exchange falls within paragraph 27(1) below.

Aggregation of capital receipts with sale price of investments

25

• (1) For the purposes of paragraph 15(b) above, if—

• (a) at any time after the death in question (whether during or after the expiry of the period of twelve months immediately following the date of the death) the appropriate person receives any capital payment or payments which is or are attributable to any qualifying investments comprised in the deceased's estate immediately before his death, and

• (b) those investments are sold by him within that period;

the price for which those investments were sold or, as the case may be, the best consideration referred to in paragraph 15(b) above shall be taken to be increased by an amount equal to the capital payment: or, as the case may be, the aggregate of the capital payments, referred to in paragraph (a) above.

• (2) If the appropriate person receives or becomes entitled to receive in respect of any qualifying investments a provisional allotment of shares in or debentures of a company and he disposes of his rights, the amount of the consideration for the disposal shall be treated for the purposes of this paragraph as a capital payment attributable to those investments.

• (3) In this paragraph " capital payment", in relation to any investment, does not include the price paid on the sale of the investments but, subject to that, includes any money or money's worth which does not constitute income for the purposes of income tax.

Payment of calls

26

For the purposes of paragraph 15(a) above if—

• (a) at any time after the death in question (whether during or after the expiry of the period of twelve months immediately following the date of the death) the appropriate person pays an amount in pursuance of a call in respect of any qualifying investments comprised in the deceased's estate immediately before his death, and

• (b) those investments are sold by the appropriate person within that period,

the value on death of those investments shall be the aggregate of the amount so paid and their value as determined apart from this Part of this Schedule.

Effect of changes in a holding between death and sale

27

• (1) This paragraph applies in any case where, within the period of twelve months immediately following the date of the death in question, there occurs it relation to any qualifying investments comprised in the deceased's estate immediately before his death (in this paragraph referred to as "the original holding") a transaction to which paragraph 4 of Schedule 7 to the Finance Act 1965 applies, that is to say—

• (a) a reorganisation, within the meaning of that paragraph, or reduction of the share capital of a company; or

• (b) the conversion of securities within the meaning of paragraph 5 of that Schedule ; or

• (c) the issue by a company of shares or debentures in exchange for shares in or debentures of another company in such circumstances that paragraph 6 of that Schedule applies ; or

• (d) the issue by a company of shares or debentures under such an arrangement as is referred to in paragraph 7 of that Schedule;

or any transaction relating to a unit trust scheme which corresponds to any of the transactions referred to in paragraphs (a) to (d) above and to which paragraph 4 of that Schedule applies by virtue of section 45(8) of the Finance Act 1965.

• (2) Subject to sub-paragraph (3) below, where this paragraph applies the holding of investments which, as the result of the transaction, constitutes a new holding, within the meaning of paragraph 4 of the said Schedule 7, shall be treated for the purposes of this Part of this Schedule as being the same as the original holding ; and references in the following provisions of this paragraph to the new holding shall be construed accordingly.

• (3) If, in a case where this paragraph applies, the appropriate person gives, or becomes liable to give, as part of or in connection with the transaction concerned, any consideration for the new holding or any part of it, then, for the purposes of sub-paragraph (5) below, the value on death of the new holding shall be treated as the aggregate of—

• (a) the value on death of the original holding, and

• (b) an amount equal to that consideration,

and in any other case the value on death of the new holding shall be taken to be the same as the value on death of the original holding.

• (4) For the purposes of sub-paragraph (3) above, there shall not be treated as consideration given for the new holding or any part of it—

• (a) any surrender, cancellation or other alteration of any of the investments comprised in the original holding or of the rights attached thereto, or

• (b) any consideration consisting of any application, in paying up the new holding or any part of it, of assets of the company concerned or of any dividend or other distribution declared out of those assets but not made.

• (5) If, in a case where this paragraph applies, the appropriate person sells, within the period referred to in sub-paragraph (1) above, any investments comprised in the new holding, the value on death of those investments shall be determined by the formula—

$$Vs(H−S)(Vs+Vr)$ where— Vs is the sale value of the investments, Vr is the market value at the time of the sale of any investments remaining in the new holding after the sale, H is the value on death of the new holding, and S is the value on death of any investments which were originally comprised in the new holding but have been sold on a previous occasion or occasions.$

• (6) Sub-paragraph (2) of paragraph 24 above shall apply for the purposes of sub-paragraph (5) above as it applies for the purposes of that paragraph.

Effect of purchase, etc., of investments of the same description

28

• (1) If, at any time within the period of twelve months immediately following the date of the death in question, the appropriate person sells any investments which form part of a holding of investments which are all of the same description and consist of—

• (a) investments comprised in the deceased's estate immediately before his death, and

• (b) investments acquired by the appropriate person, by purchase or otherwise, after the death but not in the circumstances in which paragraph 27 above applies,

the investments so sold shall be apportioned for the purposes of this Part of this Schedule between those falling within paragraph (a) and those falling within paragraph (b) above in the same proportion as, immediately before the sale, the investments comprised in the holding and falling within paragraph (a) above bore to the investments so comprised and falling within paragraph (b) above.

• (2) For the purposes of this paragraph, if the appropriate person holds investments of any description in the capacity of personal representative or trustee, the investments shall not be treated as forming part of the same holding as investments which, though of the same description, are held by him otherwise than in that capacity.

Attribution of values to specific investments

29

• (1) This paragraph shall have effect in determining the value for the purposes of tax (and, accordingly, the market value for the purposes of capital gains tax under section 26 of the Finance Act 1965) of any investment (in this paragraph referred to as a " specific investment") which is included among the investments to which a claim relates.

• (2) Subject to the following provisions of this paragraph, the value of a specific investment shall be its sale value.

• (3) Subject to the following provisions of this paragraph, in a case where the calculation of the loss on sale of the investments to which a claim relates is affected by paragraph 17 above—

• (a) if the value on death of a specific investment exceeds its sale price, the value of that investment shall be the aggregate of its sale value and an amount equal to the relevant proportion of the difference between its sale price and its value on death ; and

• (b) if the sale price of a specific investment exceeds its value on death, the value of the investment shall be its sale value less an amount equal to the relevant proportion of the difference between its value on death and its sale price.

• (4) For the purposes of sub-paragraphs (2) and (3) above, the sale value of a specific investment in respect of which an amount has been paid in pursuance of a call, as mentioned in paragraph 26 above, shall be reduced by the amount so paid in respect of that investment.

• (5) In a case where, by virtue of sub-paragraph (3) of paragraph 27 above, the value on death of the new holding, within the meaning of that paragraph, includes an amount equal to the consideration referred to in that sub-paragraph, the sale value of any specific investment comprised in the new holding shall be reduced, for the purposes of sub-paragraphs (2) and (3) above, by an amount which bears to that consideration the like proportion as the value on death of the specific investment sold bears to the value on death of the whole of the new holding.

• (6) In sub-paragraph (3) above " sale price", in relation to a specific investment, means the price for which the investment was sold by the appropriate person or, if it is greater, the best consideration which could reasonably have been obtained for the specific investment at the time of the sale ; and paragraph 25 above shall apply for the purposes of this sub-paragraph as it applies for the purposes of paragraph 15(b) above.

Limitation of loss on sale

30

In any case where, apart from this paragraph, the loss on sale of any investments—

• (a) in respect of which an amount has been paid in pursuance of a call as mentioned in paragraph 26 above, or

• (b) which are sold as mentioned in paragraph 27(5) above,

would exceed their value as determined apart from this Part of this Schedule, their sale value shall be treated for the purposes of paragraphs 16 and 29 above as being of such an amount that the loss on sale would be equal to their value as so determined.

SCHEDULE 11

PART I — —Great Britain

1

In Part I of Schedule 17 to the Finance Act 1969 (determination of amount of estate duty on estate) for paragraph (b) there shall be substituted the following paragraph:

(b) in any other case shall be the same amount as the amount of capital transfer tax which would, under section 37 of the Finance Act 1975, be charged on that aggregate principal value if it were the value transferred by a chargeable transfer made on death and the transferor had made no previous chargeable transfer

.

2

• (1) In section 121(1)(c) of the Finance Act 1972 (which gives relief for a surviving spouse up to a limit of £15,000) the words “up to a limit of £15,000” shall be omitted.

• (2) In Schedule 26 to that Act (provisions supplementary to section 121)—

• (a) in paragraph 15—

• (i) in sub-paragraph (a) after the words “paragraph (a)” there shall be inserted the words “ or (c) ” ; and

• (ii) in sub-paragraph (b) the words “or (c)” shall be omitted ;

• (b) in paragraph 17—

• (i) in sub-paragraph (a) after the words “paragraph (a)” there shall be inserted the words “ or (c) ” ; and

• (ii) in sub-paragraph (b) the words “or (c)” (in each place where those words appear) shall be omitted ;

• (c) in paragraph 19, in sub-paragraph (a) the words “or (c)” shall be omitted ; and

• (d) in paragraph 20, the words “or (c)” shall be omitted.

• (3) Where one party to a marriage dies after 12th November 1974 and subsequently (but before the passing of this Act) the other party dies, section 32(2) of the Finance Act 1954 shall have effect in relation to the death of that other party with the omission of the words inserted by paragraph 26 of Schedule 26 to the Finance Act 1972.

• (4) The preceding provisions of this paragraph do not apply where, immediately before the death, the deceased but not his spouse was domiciled in the United Kingdom.

3

Section 23 of the Finance Act 1925 and section 28 of the Finance Act 1954 (reduced rates on agricultural property and certain business assets) shall not have effect except in relation to property which, by reason of an interest which came to an end or a gift which was made before 13th November 1974, passes on death by virtue of section 2(1)(b)(i) or section 2(1)(c) of the Finance Act 1894.

PART II — —Northern Ireland

4

In Part I of Schedule 1 to the (determination of amount of estate duty payable on estate) for paragraph (b) there shall be substituted the following paragraph:

(b) in any other case shall be the same amount as the amount of capital transfer tax which would, under section 37 of the Finance Act 1975, be charged on that aggregate principal value if it were the value transferred by a chargeable transfer made on death and the transferor had made no previous chargeable transfer

.

5

• (1) In Article 5(1)(c) of the Finance (Northern Ireland) Order 1972 (which gives relief for a surviving spouse up to a limit of £15,000) the words “up to a limit of £15,000” shall be omitted.

• (2) In Schedule 2 to that Order (provisions supplementary to Article 5)—

• (a) in paragraph 15—

• (i) in sub-paragraph (a) after the words “sub-paragraph (a)” there shall be inserted the words “ or (c) ” ; and

• (ii) in sub-paragraph (b) the words “or (c)” shall be omitted ;

• (b) in paragraph 17—

• (i) in sub-paragraph (a) after the words “sub-paragraph (a)” there shall be inserted the words “ or (c) ” ; and

• (ii) in sub-paragraph (b) the words “or (c)” (in each place where those words appear) shall be omitted ;

• (c) in paragraph 19, in sub-paragraph (a) the words “or (c)” shall be omitted ; and

• (d) in paragraph 20, the words “or (c)” shall be omitted.

• (3) Where one party to a marriage dies after 12th November 1974 and subsequently (but before the passing of this Act) the other party dies, section 2(1) of the (N.I.).Finance Act (Northern Ireland) 1954 shall have effect in relation to the death of that other party with the omission of the words inserted by paragraph 26 of Schedule 2 to the Finance (Northern Ireland) Order 1972.

• (4) The preceding provisions of this paragraph do not apply where, immediately before the death, the deceased but not his spouse was domiciled in the United Kingdom.

6

Section 3 of the (N.I.).Finance (No. 2) Act (Northern Ireland) 1947 and section 3 of the Finance Act (Northern Ireland) 1954 (reduced rates on agricultural property and certain business assets) shall not have effect except in relation to property which, by reason of an interest which came to an end or a gift which was made before 13th November 1974, passes on death by virtue of section 2(1)(b)(i) or section 2(1)(c) of the Finance Act 1894.

SCHEDULE 12

General

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

The amendments made by the following paragraphs—

• (a) so far as they relate to estate duty, have effect in relation to deaths occurring after the passing of this Act, and

• (b) so far as they relate to capital transfer tax, have effect in relation to transfers of values whenever made.

The Local Registration of Title (Ireland) Act 1891

3

• (1) In the Local Registration of Title (Ireland) Act 1891, the following subsection shall be added at the end of section 45—

(5) The registering authority may, upon the application of the Board of Inland Revenue and without the concurrence of the registered owner, register an Inland Revenue charge (within the meaning of Part Ill of the Finance Act 1975) as a burden under this section affecting the land or any interest therein subject to that charge.

.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Colonial Probates Act 1892

4

In section 2(1) of the Colonial Probates Act 1892 after the words “deceased person” there shall be inserted the words “ then (subject to section 156A of the Supreme Court of Judicature (Consolidation) Act 1925, section 42 of the Probate and Legacy Duties Act 1808 and section 99A of the Probates and Letters of Administration Act (Ireland) 1857) ”.

The Land Registration Act 1925

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Inheritance (Family Provision) Act 1938

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Finance Act 1946

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Crown Proceedings Act 1947

8

In section 14(1) of the Crown Proceedings Act 1947—

• (a) in paragraph (a), for the words “death duties” there shall be substituted the words “ capital transfer tax ” ; and

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

In section 14 of the Crown Proceedings Act 1947, as applied to the Crown in right of Her Majesty’s Government in the United Kingdom by the Northern Ireland (Crown Proceedings) Order 1949, in paragraph (c) and (d) after the words “value added tax” there shall be inserted the words “ and capital transfer tax ”.

Small Estates (Representation) Act 1961

10

• (1) In relation to Scotland section 1 of the Small Estates (Representation) Act 1961 shall be amended as provided by the following sub-paragraphs.

• (2) For subsection (2) there shall be substituted the following subsection—

(2) Gross estate in this Act and in the enactments specified in the First Schedule to this Act means the aggregate of the property heritable and moveable included in the deceased’s estate, and for the purposes of this Act and those enactments the value of the net estate shall be taken to be the value of the gross estate less reasonable funeral expenses and the aggregate of all liabilities enforceable against the deceased which were incurred forhis benefit, and in respect of which he had no right of recourse.

• (3) Subsection (3) shall be omitted.

The Licensing Act 1964

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Finance Act 1965

12

For section 25A of the Finance Act 1965 there shall be substituted the following section:—

(25A) (1) Where the value of any asset comprised in a gift inter vivos is by virtue of section 22(5) of the Finance Act 1975 included in the value of the estate of any person for the purposes of capital transfer tax, and at the time of that person's death the asset— (a) is owned by the donee, or (b) is property settled by the gift or property which for the purposes of section 38 of the Finance Act 1957 or section 1 of the Finance Act (Northern Ireland) 1957 would by virtue of subsection (9) thereof be treated as property settled by the gift, then, subject to subsection (2) below, the asset shall for the purposes of this Part of this Act be deemed to be disposed of and immediately re-acquired at that time by the donee or trustee for a consideration equal to the value so included; but no chargeable gain shall accrue on the disposal. (2) Where the value so included is reduced by virtue of section 35 of the Finance Act 1968 or section 1 of the Finance Act (Northern Ireland) 1968, the appropriate portion only of the asset shall be deemed to be so disposed of and re-acquired ; and for this purpose the appropriate portion is the reduced value so included divided by the value before the reduction.

13

For section 26 of that Act there shall be substituted the following section:—

(26) Where on the death of any person capital transfer tax is chargeable on the value of his estate immediately before his death and the value of an asset forming part of that estate has been ascertained (whether in any proceedings or otherwise) for the purposes of that tax, the value so ascertained shall be taken for the purposes of this Part of this Act to be the market value of that asset at the date of the death.

14

• (1) Section 31 of that Act shall be amended as follows.

• (2) In subsection (1) for the words from "under section 15(2)" to the end there shall be substituted the words " the asset is property falling within paragraph 13(2)(f) of Schedule 6 to the Finance Act 1975 and the Treasury give a direction in relation to it under paragraph 13(1) of that Schedule ".

• (3) In subsection (3) for the words " the said section 40 applies " there shall be substituted the words " section 31 of the Finance Act 1975 applies or might apply " and for the words " section 48(1) of the Finance Act 1950 " there shall be substituted the words " section 31(2) of the Finance Act 1975 ".

• (4) In subsection (5) for the words from the beginning to " tax on chargeable gains " there shall be substituted the words " If there is a sale of the asset and capital transfer tax is chargeable under section 32(2) of the Finance Act 1975 or would be chargeable if an undertaking under section 31 of that Act as well as under subsection (3) of this section had been given ".

• (5) For subsection (6) there shall be substituted the following subsection:—

(6) A gain shall not be a chargeable gain if it accrues on the disposal of an object with respect to which an undertaking under subsection (3) of this section or section 31 of the Finance Act 1975 has been given, and the disposal is such as is referred to in section 32(3)(a) of that Act or is a disposal to the Board under paragraph 17 of Schedule 4 to that Act.

• (6) In subsection (7) for the words from " until the asset" to " 1930 and " there shall be substituted the words " until the person entitled to the asset dies or it is disposed of, whether by sale or gift or otherwise ; and if the asset subject to the undertaking is disposed of otherwise than on sale, and without a further undertaking being given under that subsection " ; and at the end of the subsection there shall be added the words " References in this subsection to a disposal shall be construed without regard to any provision of this Part of this Act under which an asset is deemed to be disposed of ".

• (7) In subsection (8) for the words " estate duty becomes payable " there shall be substituted the words " capital transfer tax becomes chargeable " and for the words " the estate duty" there shall be substituted the words " that tax ".

• (8) Subsection (9) shall be omitted.

15

In section 32 of that Act for the words from "if under section 40 " to the end of subsection (1) there shall be substituted the words " if the asset is property falling under paragraph 13(2)(a), (b), (c), (d) or (e) of Schedule 6 to the Finance Act 1975 and the Treasury give a direction in relation to it under paragraph 13(1) of that Schedule " ; and subsection (3) shall be omitted.

The Income and Corporation Taxes Act 1970

16

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Finance Act 1971

17

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Land Charges Act 1972

18

• (1) The Land Charges Act 1972 shall be amended as follows.

• (2) In section 2(4)(ii), for the words “the Finance Act 1894 or” there shall be substituted the words “ Part III of the Finance Act 1975 or under ”, and for the words “death duties” there shall be substituted the words “ capital transfer tax ”.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) In section 3(6), for the word “duties” there shall be substituted the word “ tax ”.

• (5) In section 4(6), after the words “money’s worth” there shall be inserted the words “ (or, in the case of an Inland Revenue charge, a purchaser within the meaning of Part III of the Finance Act 1975) ”.

• (6) In section 17(1), for the words “will” and “death duties” there shall be substituted the words “ and will ”.

The Finance Act 1974

19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Inheritance (Family Provision) Act (Northern Ireland) 1960

20

• (1) In section 5(1) of the Inheritance (Family Provision) Act (Northern Ireland) 1960, for the words “estate duty” there shall be substituted the words “ capital transfer tax ”.

• (2) In section 9(1) of that Act, in the definition of “net estate”, for the words “estate duty” there shall be substituted the words “ capital transfer tax ”.

The Land Registration Act (Northern Ireland) 1970

21

In Schedule 6 to the Land Registration Act (Northern Ireland) 1970 the following paragraph shall be added at the end of Part II—

(7) Notwithstanding anything in paragraph 3 above, the registering authority may, upon the application of the Board of Inland Revenue and without the concurrence of the registered owner or an order of the court, register an Inland Revenue charge (within the meaning of Part III of the Finance Act 1975) as a Schedule 6 burden affecting the land or any interest therein subject to that charge.

.

SCHEDULE 13

PART I — DEATH DUTIES

PART II — MISCELLANEOUS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

13

16

20

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1–11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part I—Great Britain

PART II—Northern Ireland

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Enactments of the Parliament of Northern Ireland

These repeals have effect—

1

The repeal in the Taxes Management Act 1970 takes effect on 16th May 1975.

2

The repeals in section 21 of the Income and Corporation Taxes Act 1970 have effect for the year 1976-77 and subsequent years of assessment.

3

The repeals in sections 394 to 398 of the Income and Corporation Taxes Act 1970 have effect in relation to the events mentioned in paragraph 8 of Schedule 2 to this Act.

4

The repeal in the Vehicles (Excise) Act (Northern Ireland) 1972 has effect as from 31st July 1974.

5

The repeals of Schedule 25 to the Finance Act 1972 and section 51 of the Finance Act 1974 have effect in relation to disposals made after 26th March 1974.

Editorial notes

[^c1007997]: EDITORIAL NOTE1984 (C) = Capital Transfer Tax Act 1984/Inheritance Tax Act 1984 (c.51, SIF 65)

[^c1007998]: The text of ss 5–18, 52(1)(2), 54, 57, 59(1)(2)(3)(b)(4)(5), Schs. 1–30, 6, para 12, Sch. 12 paras 1, 2, 16, 19, Sch. 13 was taken from SIF Group 63:1 (Income, Corporation and Capital Gains Taxes: Income and Corporation Taxes), ss. 19, 49(2), 59(1)(4), Sch 4 para 38 Sch 8 Pt II from SIF Group 65 (Inheritance Tax) and ss. 55, 56, 59(1)(4)(5), Sch 13 from SIF Group 99:3 (Public Finance and Economic Controls: National Debt); provisions omitted from SIF have been dealt with as referred to in other commentary

[^c1007999]: Act partly in force at Royal Assent, partly retrospective, see individual sections; all provisions so far as unrepealed wholly in force at 1.2.1991

[^c1008000]: General amendments to Tax Acts, Income Tax Acts, and/or Corporation Tax Acts made by legislation after 1.2.1991 are noted against Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) but not against each Act

[^c1008001]: S. 1 repealed by Finance (No. 2) Act 1979 (c. 47, SIF 63:1), s. 25(5), sch. 5 pt. I

[^c1008002]: S. 2 repealed by Finance (No. 2) Act 1975 (c. 45, SIF 63:1), ss. 17(7), 75(5), sch. 14 pt. IV

[^c1008003]: S. 3 repealed by Value Added Tax Act 1983 (c. 55, SIF 40:2), s. 50(2), sch. 11

[^c1008004]: S. 4 repealed by Customs and Excise Management Act 1979 (c. 2, SIF 40:1), s. 177(3), sch. 6 pt. I

[^c1008005]: Ss. 5–12, 16, 17 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 31

[^c1008006]: Ss. 13–15 repealed by Capital Allowances Act (c. 1, SIF 63:1), s. 164(4), Sch. 2

[^c1008007]: Ss. 5–12, 16, 17 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844, Sch. 31

[^c1008008]: S. 18 repealed by Finance Act 1981 (c. 35, SIF 63:1) s. 139(6), Sch. 19 Pt. VII, in relation to any period of account ending on or after 14 November 1980; See Finance Act 1981 (c. 35, SIF 63:1) s. 35, Schs. 9, 10 (transitional)

[^c1008011]: S. 19(1) repealed by Capital Transfer Tax Act 1984 (c. 51, SIF 18), Sch. 9

[^c1008012]: Ss. 20–47, 49(3)(5), 51 repealed by Capital Transfer Tax Act 1984 (c. 51, SIF 65) ss. 274, 277, schs. 7, 9

[^c1008013]: The text of s. 48 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

[^c1008014]: S. 48 amended by Companies Consolidation (Consequential Provisions) Act 1985 (c. 9, SIF 27), sch. 2, and (retrosp.) by Finance Act 1989 (c. 26, SIF 63:1), s. 180(1)(4)

[^c1008015]: 1971 c. 68.

[^c1008016]: 1971 c. 27 (N.I.).

[^c1008017]: 1948 c. 38.

[^c1008018]: 1894 c. 30.

[^c1008019]: S. 49 amended by Capital Transfer Tax Act 1984 (c. 51, SIF 65), s. 276, sch. 8 para. 4

[^c1008020]: Ss. 20–47, 49(3)(5), 51 repealed by Capital Transfer Tax Act 1984 (c. 51, SIF 65) ss. 274, 277, schs. 7, 9

[^c1008021]: 1910 c. 8

[^c1008023]: The text of ss. 50, 52(3), 54(1), 57(1)(a)(b), (2)(in part), 58, Sch. 4 para. 38(2), Sch. 8 Pt. II (ss. 12–16), Sch. 11, Sch. 13 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

[^c1008024]: 1894 c. 30.

[^c1008025]: 1881 c. 12.

[^c1008026]: Ss. 20–47, 49(3)(5), 51 repealed by Capital Transfer Tax Act 1984 (c. 51, SIF 65) ss. 274, 277, schs. 7, 9

[^c1008027]: The text of ss. 50, 52(3), 54(1), 57(1)(a)(b), (2)(in part), 58, Sch. 4 para. 38(2), Sch. 8 Pt. II (ss. 12–16), Sch. 11, Sch. 13 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.

[^c1008009]: Pt. III (ss. 19–52) modified by Finance Act 1977 (c. 36, SIF 63:1), s. 49(2)(5)

[^c1008010]: Pt. III (ss. 19–52) applied by Finance Act 1978 (c. 42, SIF 63:1), s. 68

[^c1008028]: S. 53 repealed with savings by Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 158, Sch. 8

[^c1008030]: S. 54 repealed (29.4.1996 with effect as in accordance with Sch. 22) by 1996 c. 8, s. 205, Sch. 41 Pt. V(12)

[^c1008031]: S. 55 repealed by Finance Act 1984 (c. 43, SIF 99:3), s. 128(6), Sch. 23 Pt. XIV

[^c1008035]: S. 56 repealed (1.4.2001) by 2000 c. 20, ss. 3(4), 29(2), Sch. 2; S.I. 2000/3349, art. 3(1)(b) (with transitional provisions in art. 5)