Inheritance Tax Act 1984

If in determining the value on death of any interest to which the claim relates, any other interests, whether in the same or other land, were taken into account, an addition shall be made to the sale price of the interest; and the amount of the addition shall be equal to the difference between the value on death of the interest and the value which would have been the value on death if no other interests had been taken into account.

Sales to beneficiaries etc. and exchanges

196

• (1) This section applies where a person who makes a claim under this Chapter, acting in the same capacity as that in which he makes the claim—

• (a) sells an interest to which section 191(1) would apply but for section 191(3), or

• (b) within the period of three years immediately following the date of the death exchanges (with or without any payment by way of equality of exchange) any interest in land which was comprised in the deceased’s estate immediately before his death.

and the sale price of the interest, or in the case of an exchange its market value at the date of the exchange, exceeds its value on death.

• (2) Where this section applies, an addition shall be made to the sale price of any interest to which the claim relates; and the amount of the addition—

• (a) if the claim relates to one interest only, shall be equal to the excess referred to in subsection (1) above, and

• (b) if the claim relates to more than one interest, shall be equal to the appropriate fraction of that excess.

• (3) In subsection (2) above “the appropriate fraction” in relation to any interest to which the claim relates is the fraction of which—

• (a) the numerator is the difference between the value on death of that interest and its sale price (as adjusted under sections 193 to 195 above) and

• (b) the denominator is the aggregate of that difference and the corresponding differences for all the other interests to which the claim relates;

and the aggregate referred to in paragraph (b) above shall be calculated without regard to which is the greater, in the case of any particular interest, of its value on death and its sale price.

Compulsory acquisition more than three years after death

197

• (1) If after the end of the period of three years immediately following the date of the death an interest in land is acquired from the appropriate person in pursuance of a notice to treat served before the death or within that period by an authority possessing powers of compulsory acquisition, this Chapter shall apply in relation to the interest as it applies in relation to interests sold within that period.

• (2) Subsection (1) above shall not have effect in relation to an interest if its sale value would exceed its value on death.

• (3) In determining the period referred to in section 192(1) above, no account shall be taken of the sale of an interest in relation to which subsection (1) above has effect; and if the claim relates only to such interests, section 192 shall not apply in relation to the claim.

Date of sale or purchase

198

• (1) Subject to the following subsections, the date on which an interest in land is sold or purchased by the appropriate person shall for the purposes of this Chapter be taken to be the date on which he enters into a contract to sell or purchase it.

• (2) If the sale or purchase of any interest by the appropriate person results from the exercise (whether by him or by any other person) of an option granted not more than six months earlier, the date on which the interest is sold or purchased shall be taken to be the date on which the option was granted.

• (3) If an interest is acquired from the appropriate person in pursuance of a notice to treat served by an authority possessing powers of compulsory acquisition, the date on which the interest is sold shall, subject to subsection (4) below, be taken to be the date on which compensation for the acquisition is agreed or otherwise determined (variations on appeal being disregarded for this purpose) or, if earlier, the date when the authority enter on the land in pursuance of their powers.

• (4) If an interest in land is acquired from the appropriate person—

• (a) in England, Scotland or Wales by virtue of a general vesting declaration within the meaning of the Compulsory Purchase (Vesting Declarations) Act 1981 or, in Scotland, Schedule 24 to the Town and Country Planning (Scotland) Act 1972, or

• (b) in Northern Ireland, by way of a vesting order,

the date on which it is sold by the appropriate person shall be taken to be the last day of the period specified in the declaration or, in Northern Ireland, the date on which the vesting order becomes operative.

PART VII — LIABILITY

General rules

Dispositions by transferor

199

• (1) The persons liable for the tax on the value transferred by a chargeable transfer made by a disposition (including any omission treated as a disposition under section 3(3) above) of the transferor are—

• (a) the transferor;

• (b) any person the value of whose estate is increased by the transfer;

• (c) so far as the tax is attributable to the value of any property, any person in whom the property is vested (whether beneficially or otherwise) at any time after the transfer, or who at any such time is beneficially entitled to an interest in possession in the property;

• (d) where by the chargeable transfer any property becomes comprised in a settlement, any person for whose benefit any of the property or income from it is applied.

• (2) Subsection (1)(a) above shall apply in relation to—

• (a) the tax on the value transferred by a potentially exempt transfer; and

• (b) so much of the tax on the value transferred by any other chargeable transfer made within seven years of the transferor’s death as exceeds what it would have been had the transferor died more than seven years after the transfer,

with the substitution for the reference to the transferor of a reference to his personal representatives.

• (3) A purchaser of property, and a person deriving title from or under such a purchaser, shall not by virtue of subsection (1)(c) above be liable for tax attributable to the value of the property unless the property is subject to an Inland Revenue charge.

• (4) For the purposes of this section—

• (a) any person who takes possession of or intermeddles with, or otherwise acts in relation to, property so as to become liable as executor or trustee (or, in Scotland, any person who intromits with property or has become liable as a vitious intromitter), and

• (b) any person to whom the management of property is entrusted on behalf of a person not of full legal capacity,

shall be treated as a person in whom the property is vested.

• (5) References in this section to any property include references to any property directly or indirectly representing it.

Transfer on death

200

• (1) The persons liable for the tax on the value transferred by a chargeable transfer made (under section 4 above) on the death of any person are . . . —

• (a) so far as the tax is attributable to the value of property which either—

• (i) was not immediately before the death comprised in a settlement, or

• (ii) was so comprised and consists of land in the United Kingdom which devolves upon or vests in the deceased’s personal representatives,

the deceased’s personal representatives;

• (b) so far as the tax is attributable to the value of property which, immediately before the death, was comprised in a settlement, the trustees of the settlement;

• (c) so far as the tax is attributable to the value of any property, any person in whom the property is vested (whether beneficially or otherwise) at any time after the death, or who at any such time is beneficially entitled to an interest in possession in the property;

• (d) so far as the tax is attributable to the value of any property which, immediately before the death, was comprised in a settlement, any person for whose benefit any of the property or income from it is applied after the death.

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) A purchaser of property, and a person deriving title from or under such a purchaser, shall not by virtue of subsection (1)(c) above be liable for tax attributable to the value of the property unless the property is subject to an Inland Revenue charge.

• (3) For the purposes of subsection (1) above a person entitled to part only of the income of any property shall, notwithstanding anything in section 50 above, be deemed to be entitled to an interest in the whole of the property.

• (4) Subsections (4) and (5) of section 199 above shall have effect for the purposes of this section as they have effect for the purposes of that section.

Settled property

201

• (1) The persons liable for the tax on the value transferred by a chargeable transfer made under Part III of this Act are—

• (a) the trustees of the settlement;

• (b) any person entitled (whether beneficially or not) to an interest in possession in the settled property;

• (c) any person for whose benefit any of the settled property or income from it is applied at or after the time of the transfer;

• (d) where the transfer is made during the life of the settlor and the trustees are not for the time being resident in the United Kingdom, the settlor.

• (2) Where the chargeable transfer is made within seven years of the transferor’s death but is not a potentially exempt transfer, subsection (1)(d) above shall not apply in relation to so much of the tax as exceeds what it would have been had the transferor died more than seven years after the transfer.

• (3) Subsection (1)(d) above shall not apply in relation to a settlement made before 11th December 1974 if the trustees were resident in the United Kingdom when the settlement was made, but have not been resident there at any time during the period between 10th December 1974 and the time of the transfer.

• (3A) Subsection (1)(d) above shall not apply in relation to the tax chargeable on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer in a case where the settlement was made before 17th March 1987 if the trustees were resident in the United Kingdom when the settlement was made, but have not been resident there at any time between 16th March 1987 and the death of the transferor.

• (4) Where more than one person is a settlor in relation to a settlement and the circumstances so require, subsection (1)(d) above shall have effect in relation to it as if the settled property were comprised in separate settlements.

• (4A) Where—

• (a) a charge to tax arises under or by virtue of section 74A, or

• (b) in a case where paragraphs (a) to (d) of section 74A are satisfied, a charge to tax arises under section 64 or 65 in respect of the relevant settled property (within the meaning of section 74A),

subsection (1) of this section has effect as if the persons listed in that subsection included the individual mentioned in section 74A(1)(b)(i).

• (5) For the purposes of this section trustees of a settlement shall be regarded as not resident in the United Kingdom unless the general administration of the settlement is ordinarily carried on in the United Kingdom and the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are for the time being resident in the United Kingdom.

• (6) References in this section to any property include references to any property directly or indirectly representing it.

Close companies

202

• (1) The persons liable for tax chargeable by virtue of section 94(1) or section 99(2) above are—

• (a) the company making the transfer of value concerned, and

• (b) so far as the tax remains unpaid after it ought to have been paid, the persons to whom any amounts have been apportioned under section 94 above and any individual (whether such a person or not) the value of whose estate is increased by the company’s transfer.

• (2) A person to whom not more than 5 per cent of the value transferred by the company’s transfer is apportioned shall not as such be liable for any of the tax; and each of the other persons to whom any part of that value has been apportioned shall be so liable only for such part of the tax as corresponds to that part of that value.

• (3) A person the value of whose estate is increased by the company’s transfer shall not as such be liable for a greater amount than the amount of the increase.

• (4) No person other than those liable under this section shall be liable for any tax chargeable by virtue of section 94(1) or section 99(2) above.

Liability of spouse

203

• (1) Where—

• (a) a transferor is liable for any tax on the value transferred by a chargeable transfer, and

• (b) by another transfer of value made by him on or after 27th March 1974 (“the spouse or civil partner transfer”) any property became the property of a person (“the transferee”) who at the time of both transfers was his spouse or civil partner ,

the transferee is liable for so much of the tax as does not exceed the market value of the property at the time of the spouse or civil partner transfer or, in a case where subsection (2) below applies the lower market value mentioned in paragraph (c) of that subsection.

• (2) This subsection applies where—

• (a) the chargeable transfer is made after the spouse or civil partner transfer; and

• (b) the property (“the transferred property”) which became the property of the transferee either remains the transferee’s property at the date of the chargeable transfer or has before that date been sold by the transferee by a qualifying sale; and

• (c) the market value of the transferred property on the relevant date (that is to say, the date of the chargeable transfer or, as the case may be, of the qualifying sale) is lower than its market value at the time of the spouse or civil partner transfer; and

• (d) the transferred property is not tangible movable property.

• (3) In this section “qualifying sale” has the same meaning as in section 131 above; and, subject to subsection (4) below, sections 133 to 140 above shall have effect for the purposes of this section as they have effect for the purposes of section 131.

• (4) In their application by virtue of subsection (3) above, sections 133 to 140 above shall have effect as if—

• (a) references to the chargeable transfer were references to the spouse or civil partner transfer,

• (b) references to the transferee’s spouse or civil partner were omitted, and

• (c) references to section 131 above were references to this section.

Limitation of liability

204

• (1) A person shall not be liable under section 200(1)(a) above for any tax as a personal representative of a deceased person, except to the extent of the following assets, namely—

• (a) so far as the tax is attributable to the value of any property other than such as is mentioned in paragraph (b) below, the assets (other than property so mentioned) which he has received as personal representative or might have so received but for his own neglect or default; and

• (b) so far as the tax is attributable to property which, immediately before the death, was comprised in a settlement and consists of land in the United Kingdom, so much of that property as is at any time available in his hands for the payment of the tax, or might have been so available but for his own neglect or default.

• (2) A person shall not be liable for tax as trustee in relation to any property, except to the extent of—

• (a) so much of the property as he has actually received or disposed of or as he has become liable to account for to the persons beneficially entitled thereto, and

• (b) so much of any other property as is for the time being available in his hands as trustee for the payment of the tax or might have been so available but for his own neglect or default.

• (3) A person not liable as mentioned in subsection (1) or (2) above but liable for tax as a person in whom property is vested or liable for tax as a person entitled to a beneficial interest in possession in any property shall not be liable for the tax except to the extent of that property.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) A person liable for tax as a person for whose benefit any settled property, or income from any settled property, is applied, shall not be liable for the tax except to the extent of the amount of the property or income (reduced in the case of income by the amount of any income tax borne by him in respect of it, and in the case of other property in respect of which he has borne income tax by virtue of Chapter 2 of Part 13 of the Income Tax Act 2007 by the amount of that tax).

• (6) Where a person is liable for any tax—

• (a) under section 199 above otherwise than as transferor or personal representatives of the transferor, or

• (b) under section 201 above otherwise than as trustee of the settlement,

he shall be liable only if the tax remains unpaid after it ought to have been paid and, in a case where any part of the value transferred is attributable to the tax on it, shall be liable to no greater extent than he would have been had the value transferred been reduced by the tax remaining unpaid.

• (7) Where the tax exceeds what it would have been had the transferor died more than seven years after the transfer, subsection (6) above shall not apply in relation to the excess.

• (8) A person liable by virtue of section 199(2) above for any tax as personal representative of the transferor shall be liable only to the extent that either—

• (a) in consequence of subsections (2), (3) and (5) above, no person falling within paragraphs (b) to (d) of section 199(1) above is liable for the tax, or

• (b) the tax remains unpaid twelve months after the end of the month in which the death of the transferor occurs,

and, subject to that, shall be liable only to the extent of the assets mentioned in subsection (1) above.

• (9) Where by virtue of subsection (3) of section 102 of the Finance Act 1986 the estate of a deceased person is treated as including property which would not apart from that subsection form part of his estate, a person shall be liable under section 200(1)(a) above as personal representative for tax attributable to the value of that property only if the tax remains unpaid twelve months after the end of the month in which the death occurs and, subject to that, only to the extent of the assets mentioned in subsection (1) above.

More than one person liable

205

Except as otherwise provided, where under this Act two or more persons are liable for the same tax, each of them shall be liable for the whole of it.

Special cases

Gifts to political parties

206

Conditional exemption, etc.

207

• (1) Where tax is chargeable under section 32 above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (2) or subsection (3)(a) of that section, the person liable for the tax is the person who, if the property were sold—

• (a) in a case within subsection (2) of that section, at the time the tax becomes chargeable, and

• (b) in a case within subsection (3)(a), immediately after the death,

would be entitled to receive (whether for his benefit or not) the proceeds of sale or any income arising from them.

• (2) Where tax is chargeable under section 32 above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (3)(b) of that section, the person liable for the tax is the person by whom or for whose benefit the property is disposed of.

• (2A) Where tax is chargeable under section 32A above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (3) or subsection (4)(a) of that section, the person liable for the tax is the person who, if the property were sold—

• (a) in a case within subsection (3) of that section, at the time the tax becomes chargeable, and

• (b) in a case within subsection (4)(a), immediately after the death,

would be entitled to receive (whether for his benefit or not) the proceeds of sale or any income arising from them.

• (2B) Where tax is chargeable under section 32A above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (4)(b) of that section, the person liable for the tax is the person by whom or for whose benefit the property is disposed of.

• (3) The persons liable for tax charged under section 79(3A) above are—

• (a) the trustees of the settlement concerned, and

• (b) any person for whose benefit any of the property or income from it is applied at or after the time of the event occasioning the charge.

• (4) The person liable for tax chargeable under paragraph 1(1) or 3(1) of Schedule 5 to this Act is the person who, if the property were sold at the time the tax becomes chargeable, would be entitled to receive (whether for his benefit or not) the proceeds of sale or any income arising from them.

• (5) The person liable for tax chargeable under paragraph 1(2) or 3(2) of Schedule 5 to this Act is the person by whom or for whose benefit the property is disposed of.

Woodlands

208

The person liable for tax chargeable under section 126 above in relation to a disposal is the person who is entitled to the proceeds of sale or would be so entitled if the dispoal were a sale.

Succession in Scotland

209

• (1) A person shall not be liable under section 200(1)(a) above for tax attributable to the value of any heritable property in Scotland which is vested in him as executor in the circumstances and for the purposes mentioned in subsection (1) or (2) of section 18 of the Succession (Scotland) Act 1964.

• (2) The persons liable for tax chargeable under section 147(4) above are the person who claims legitim or rights under section 131 of the Civil Partnership Act 2004 and any person mentioned in section 200(1)(c) above.

• (3) Section 200(1)(a) shall not apply in relation to tax chargeable under section 147(4) above, but section 204(1) shall apply in relation to the person who claims legitim or rights under section 131 of the Civil Partnership Act 2004 as it applies in relation to the personal representatives of a deceased person.

Pension rights, etc.

210

• (1) Where any tax chargeable on a transfer of value is attributable to the value of an interest satisfying the conditions of paragraphs (a) and (b) of section 151(2) above, the persons liable for the tax shall not include the trustees of the scheme or fund concerned but shall, if the transfer is made on the death of the person entitled to the interest, include his personal representatives.

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

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

Burden of tax, etc.

Burden of tax on death

211

• (1) Where personal representatives are liable for tax on the value transferred by chargeable transfer made on death, the tax shall be treated as part of the general testamentary and administration expenses of the estate, but only so far as it is attributable to the value of property in the United Kingdom which—

• (a) vests in the deceased’s personal representatives, and

• (b) was not immediately before the death comprised in a settlement.

• (2) Subsection (1) above shall have effect subject to any contrary intention shown by the deceased in his will.

• (3) Where any amount of tax paid by personal representatives on the value transferred by a chargeable transfer made on death does not fall to be borne as part of the general testamentary and administration expenses of the estate, that amount shall, where occasion requires, be repaid to them by the person in whom the property to the value of which the tax is attributable is vested.

• (4) References in this section to tax include references to interest on tax.

Powers to raise tax

212

• (1) Where a person is liable, otherwise than as transferor, and otherwise than under section 203 above, for tax attributable to the value of any property he shall, for the purpose of paying the tax or raising the amount of it when paid, have power, whether or not the property is vested in him, to raise the amount of the tax by sale or mortgage of, or a terminable charge on, that property or any part of it.

• (2) A person having a limited interest in any property who pays the tax attributable to the value of that property shall be entitled to the like charge as if the tax so attributable had been raised by means of a mortgage to him.

• (3) Any money held on the trusts of a settlement may be expended in paying the tax attributable to the value of any property comprised in the settlement and held on the same trusts.

• (4) References in this section to tax include references to interest on tax and to costs properly incurred in respect of tax.

Refund by instalments

213

Where a person has paid to the Board any tax which is or might at his option have been payable by instalments and he is entitled to recover the whole or part of it from another person, that other person shall, unless otherwise agreed between them, be entitled to refund the tax or that part by the same instalments (with the same interest thereon) as those by which it might have been paid to the Board.

Certificates of tax paid

214

• (1) On an application being made in such form as the Board may prescribe by a person who has paid or borne the tax attributable to the value of any property, being tax for which he is not ultimately liable, the Board shall grant a certificate specifying the tax paid and the debts and incumbrances allowed in valuing the property.

• (2) Except to the extent of any repayment which may be or become due from the Board, a certificate under subsection (1) above shall be conclusive as between any person by whom the tax specified in the certificate falls to be borne and the person seeking to recover the tax from him; and any repayment of the tax falling to be made by the Board shall be duly made if made to the person producing the certificate.

• (3) References in this section to tax include references to interest on tax.

PART VIII — ADMINISTRATION AND COLLECTION

Management

General

215

The tax shall be under the care and management of the Board.

Accounts and information

Delivery of accounts

216

• (1) Except as otherwise provided by this section or by regulations under section 256 below, the personal representatives of a deceased person and every person who—

• (a) is liable as transferor for tax on the value transferred by a chargeable transfer, or would be so liable if tax were chargeable on that value, or

• (b) is liable as trustee of a settlement for tax on the value transferred by a transfer of value, or would be so liable if tax were chargeable on that value, or

• (bb) is liable under section 199(1)(b) above for tax on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer, or would be so liable if tax were chargeable on that value, or

• (bc) is liable under section 200(1)(c) above for tax on the value transferred by a chargeable transfer made on death, so far as the tax is attributable to the value of property which, apart from section 102(3) of the Finance Act 1986, would not form part of the deceased’s estate, or would be so liable if tax were chargeable on the value transferred on the death, or

• (bca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (bd) is liable under section 201(1)(b), (c) or (d) above for tax on the value transferred by a potentially exempt transfer which is made under section 52 above and which proves to be a chargeable transfer, or would be so liable if tax were chargeable on that value, or

• (c) is liable as trustee of a settlement for tax on an occasion on which tax is chargeable under Chapter III of Part III of this Act (apart from section 79), or would be so liable if tax were chargeable on the occasion,

shall deliver to the Board an account specifying to the best of his knowledge and belief all appropriate property and the value of that property.

• (2) Where in the case of the estate of a deceased person no grant of representation or confirmation has been obtained in the United Kingdom before the expiration of the period of twelve months from the end of the month in which the death occurred—

• (a) every person in whom any of the property forming part of the estate vests (whether beneficially or otherwise) on or at any time after the deceased’s death or who at any such time is beneficially entitled to an interest in possession in any such property, and

• (b) where any of the property is at any such time comprised in a settlement and there is no person beneficially entitled to an interest in possession in that property, every person for whose benefit any of that property (or income from it) is applied at any such time,

shall deliver to the Board an account specifying to the best of his knowledge and belief the appropriate property vested in him, in which he has an interest or which (or income from which) is applicable for his benefit and the value of that property.

• (3) Subject to subsections (3A) and (3B) below, where an account is to be delivered by personal representatives (but not where it is to be delivered by a person who is an executor of the deceased only in respect of settled land in England and Wales), the appropriate property is—

• (a) all property which formed part of the deceased’s estate immediately before his death . . . , other than property which would not, apart from section 102(3) of the Finance Act 1986, form part of his estate; and

• (b) all property to which was attributable the value transferred by any chargeable transfers made by the deceased within seven years of his death.

• (3A) If the personal representatives, after making the fullest enquiries that are reasonably practicable in the circumstances, are unable to ascertain the exact value of any particular property, their account shall in the first instance be sufficient as regards that property if it contains—

• (a) a statement to that effect;

• (b) a provisional estimate of the value of the property; and

• (c) an undertaking to deliver a further account of it as soon as its value is ascertained.

• (3B) The Board may from time to time give such general or special directions as they think fit for restricting the property to be specified in pursuance of subsection (3) above by any class of personal representatives.

• (4) Where subsection (3) above does not apply the appropriate property is any property to the value of which the tax is or would be attributable . . . .

• (5) Except in the case of an account to be delivered by personal representatives, a person shall not be required to deliver an account under this section with respect to any property if a full and proper account of the property, specifying its value, has already been delivered to the Board by some other person who—

• (a) is or would be liable for the tax attributable to the value of the property, and

• (b) is not or would not be liable with him jointly as trustee;

and a person within subsection (2) above shall not be required to deliver an account under that subsection if he or another person within that subsection has satisfied the Board that an account will in due course be delivered by the personal representatives.

• (6) An account under the preceding provisions of this section shall be delivered—

• (a) in the case of an account to be delivered by personal representatives, before the expiration of the period of twelve months from the end of the month in which the death occurs, or, if it expires later, the period of three months beginning with the date on which the personal representatives first act as such;

• (aa) in the case of an account to be delivered by a person within subsection (1)(bb) or (bd) above, before the expiration of the period of twelve months from the end of the month in which the death of the transferor occurs;

• (ab) in the case of an account to be delivered by a person within subsection (1)(bc) above, before the expiration of the period of twelve months from the end of the month in which the death occurs;

• (ac) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ad) in the case of an account to be delivered by a person within subsection (1)(c) above, before the expiration of the period of six months from the end of the month in which the occasion concerned occurs;

• (b) in the case of an account to be delivered by a person within subsection (2) above, before the expiration of the period of three months from the time when he first has reason to believe that he is required to deliver an account under that subsection;

• (c) in the case of an account to be delivered by any other person, before the expiration of the period of twelve months from the end of the month in which the transfer is made or, if it expires later, the period of three months beginning with the date on which he first becomes liable for tax.

• (7) A person liable for tax under section 32 or 32A, 79 or 126 above or under Schedule 5 to this Act shall deliver an account under this section before the expiration of the period of six months from the end of the month in which the event by reason of which the tax is chargeable occurs.

Defective accounts

217

If a person who has delivered an account under section 216 above discovers at any time that the account is defective in a material respect by reason of anything contained in or omitted from it he shall, within six months of that time, deliver to the Board a further account containing such information as may be necessary to remedy the defect.

Non-resident trustees

218

• (1) Where any person, in the course of a trade or profession carried on by him, other than the profession of a barrister, has been concerned with the making of a settlement and knows or has reason to believe—

• (a) that the settlor was a long-term UK resident, and

• (b) that the trustees of the settlement are not or will not be resident in the United Kingdom,

he shall, within three months of the making of the settlement, make a return to the Board stating the names and addresses of the settlor and of the trustees of the settlement.

• (2) A person shall not be required to make a return under this section in relation to—

• (a) any settlement made by will, or

• (b) any other settlement, if such a return in relation to that settlement has already been made by another person or if an account has been delivered in relation to it under section 216 above.

• (3) For the purposes of this section trustees of a settlement shall be regarded as not resident in the United Kingdom unless the general administration of the settlement is ordinarily carried on in the United Kingdom and the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are for the time being resident in the United Kingdom.

Power to require information

219

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

Inspection of property

220

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

Determinations , reviews and appeals

Notices of determination

221

• (1) Where it appears to the Board that a transfer of value has been made or where a claim under this Act is made to the Board in connection with a transfer of value, the Board may give notice in writing to any person who appears to the Board to be the transferor or the claimant or to be liable for any of the tax chargeable on the value transferred, stating that they have determined the matters specified in the notice.

• (2) The matters that may be specified in a notice under this section in relation to any transfer of value are all or any of the following—

• (a) the date of the transfer;

• (b) the value transferred and the value of any property to which the value transferred is wholly or partly attributable;

• (c) the transferor;

• (d) the tax chargeable (if any) and the persons who are liable for the whole or part of it;

• (e) the amount of any payment made in excess of the tax for which a person is liable and the date from which and the rate at which tax or any repayment of tax overpaid carries interest; and

• (f) any other matter that appears to the Board to be relevant for the purposes of this Act.

• (3) A determination for the purposes of a notice under this section of any fact relating to a transfer of value—

• (a) shall, if that fact has been stated in an account or return under this Part of this Act and the Board are satisfied that the account or return is correct, be made by the Board in accordance with that account or return, but

• (b) may, in any other case, be made by the Board to the best of their judgment.

• (4) A notice under this section shall state the time within which and the manner in which an appeal against any determination in it may be made.

• (5) Subject to any variation by agreement in writing or on appeal, a determination in a notice under this section shall be conclusive for the purposes of this Act against the person on whom the notice is served; and if the notice is served on the transferor and specifies a determination of the value transferred by the transfer of value or previous transfers of value, the determination, so far as relevant to the tax chargeable in respect of later transfers of value (whether or not made by the transferor) shall be conclusive also against any other person, subject however to any adjustment under section 240 or 241 below.

• (6) References in this section to transfers of value or to the values transferred by them shall be construed as including references to—

• (a) chargeable events by reference to which tax is chargeable under section 32 or 32A of this Act,

• (b) occasions on which tax is chargeable under Chapter III of Part III of this Act,

• (c) disposals on which tax is chargeable under section 126 of this Act,

or to the amounts on which tax is then chargeable.

Appeals against determinations

222

• (1) A person on whom a notice under section 221 above has been served may, within thirty days of the service, appeal against any determination specified in it by notice in writing given to the Board and specifying the grounds of appeal.

• (2) Sections 223D, 223G and 223H provide for notification of the appeal to the tribunal.

• (3) Where—

• (a) it is so agreed between the appellant and the Board, or

• (b) the High Court, on an application made by the appellant, is satisfied that the matters to be decided on the appeal are likely to be substantially confined to questions of law and gives leave for that purpose,

the appeal may be notified to the High Court.

• (4) An appeal on any question as to the value of land in the United Kingdom may be notified to the appropriate . . . tribunal.

• (4ZA) The appeal may be notified under subsection (3) or (4) only if it could be notified to the tribunal under section 223D, 223G or 223H.

• (4A) If and so far as the question in dispute on any appeal under this section which has been notified to the tribunal or the High Court is a question as to the value of land in the United Kingdom, the question shall be determined on a reference to the appropriate . . . tribunal.

• (4B) In this section the appropriate tribunal means—

• (a) where the land is in England or Wales, the Upper Tribunal;

• (b) where the land is in Scotland, the Lands Tribunal for Scotland;

• (c) where the land is in Northern Ireland, the Lands Tribunal for Northern Ireland.

• (5) In the application of this section to Scotland, for references to the High Court there shall be substituted references to the Court of Session.

Appeals out of time

223

• (1) This section applies in a case where—

• (a) notice of appeal may be given to HMRC under section 222, but

• (b) no notice is given before the relevant time limit.

• (2) Notice may be given after the relevant time limit if—

• (a) HMRC agree, or

• (b) where HMRC do not agree, the tribunal gives permission.

• (3) If the following conditions are met, HMRC shall agree to notice being given after the relevant time limit.

• (4) Condition A is that the appellant has made a request in writing to HMRC to agree to the notice being given.

• (5) Condition B is that HMRC are satisfied that there was reasonable excuse for not giving the notice before the relevant time limit.

• (6) Condition C is that HMRC are satisfied that request under subsection (4) was made without unreasonable delay after the reasonable excuse ceased.

• (7) If a request of the kind referred to in subsection (4) is made, HMRC must notify the appellant whether or not HMRC agree to the appellant giving notice of appeal after the relevant time limit.

• (8) In this section “relevant time limit”, in relation to notice of appeal, means the time before which the notice is to be given (but for this section).

Procedure before Special Commissioners

224

If an appeal is notified to the tribunal, the tribunal must confirm the determination appealed against (or that determination as varied on a review under section 223E) unless the tribunal is satisfied that it ought to be varied (or further varied) or quashed.

Statement of case for opinion of High Court

225

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

Payment

Payment: general rules

226

• (1) Except as otherwise provided by the following provisions of this Part of this Act, the tax on the value transferred by a chargeable transfer shall be due six months after the end of the month in which the chargeable transfer is made or, in the case of a transfer made after 5th April and before 1st October in any year otherwise than on death, at the end of April in the next year.

• (2) Personal representatives shall, on delivery of their account, pay all the tax for which they are liable and may, on delivery of that account, also pay any part of the tax chargeable on the death for which they are not liable, if the persons liable for it request them to make the payment.

• (3) So much of the tax chargeable on the value transferred by a chargeable transfer made within seven years . . . of the death of the transferor as—

• (a) exceeds what it would have been had the transferor died more than seven years after the transfer . . .

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

shall be due six months after the end of the month in which the death occurs.

• (3A) Without prejudice to subsection (3) above, the tax chargeable on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer shall be due six months after the end of the month in which the transferor’s death occurs.

• (3B) So much (if any) of the tax chargeable on the value transferred by a chargeable transfer made under Chapter III of Part III of this Act within the period of seven years ending with the settlor’s death as exceeds what it would have been had the settlor died more than seven years after the date of the transfer shall be due six months after the end of the month in which the death occurs.

• (3C) Tax chargeable under Chapter 3 of Part 3 of this Act on the value transferred by a chargeable transfer, other than any for which the due date is given by subsection (3B) above, is due six months after the end of the month in which the chargeable transfer is made.

• (4) Tax chargeable under section 32, 32A, 79 or 126 above or under Schedule 5 to this Act . . . shall be due six months after the end of the month in which the event by reason of which it is chargeable occurs.

• (5) The Board may in the first instance, and without prejudice to the recovery of the remainder of the tax, accept or demand payment of an amount by reference to the value stated in an account delivered to the Board under section 216 or 217 above.

• (6) Nothing in this section shall be taken to authorise the recovery from, or require the payment by, any person of tax in excess of his liability as limited by section 204 above.

Payment by instalments-land, shares and businesses

227

• (1) Where any of the tax payable on the value transferred by a chargeable transfer is attributable to the value of qualifying property and—

• (a) the transfer is made on death, or

• (b) the tax so attributable is borne by the person benefiting from the transfer, or

• (c) the transfer is made under Part III of this Act and the property concerned continues to be comprised in the settlement,

the tax so attributable may, if the person paying it by notice in writing to the Board so elects, be paid by ten equal yearly instalments.

• (1A) Subsection (1) above does not apply to—

• (a) tax payable on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer, or

• (b) additional tax becoming payable on the value transferred by any chargeable transfer by reason of the transferor’s death within seven years of the transfer,

except to the extent that the tax is attributable to the value of property which satisfies one of the conditions specified in subsection (1C) below and, in the case of property consisting of unquoted shares or unquoted securities, the further condition specified in section 228(3A) below.

• (1AA) In subsection (1A) above “unquoted”, in relation to any shares or securities, means not listed on a recognised stock exchange.

• (1B) In this section“the transferee” means the person whose property the qualifying property became on the transfer or, where on the transfer the qualifying property became comprised in a settlement in which no qualifying interest in possession (within the meaning of Chapter III of Part III of this Act) subsists, the trustees of the settlement.

• (1C) The conditions referred to in subsection (1A) above are—

• (a) that the property was owned by the transferee throughout the period beginning with the date of the chargeable transfer and ending with the death of the transferor (or, if earlier, the death of the transferee), or

• (b) that for the purposes of determining the tax, or additional tax, due by reason of the death of the transferor, the value of the property is reduced in accordance with the provisions of Chapter I or Chapter II or Part V of this Act by virtue of section 113B or section 124B above.

• (2) In this section “qualifying property” means—

• (a) land of any description, wherever situated;

• (b) shares or securities to which section 228 below applies;

• (c) a business or an interest in a business.

• (3) The first of the instalments referred to in subsection (1) above shall be payable—

• (a) if the chargeable transfer was made on death, six months after the end of the month in which the death occurred, and

• (b) in any other case, at the time when the tax would be due if it were not payable by instalments;

and interest under section 233 below on the unpaid portion of the tax shall be added to each instalment and paid accordingly, except as otherwise provided in section 234 below.

• (4) Notwithstanding the making of an election under this section, the tax for the time being unpaid, with interest to the time of payment, may be paid at any time; and if at any time (whether before or after the date when the first instalment is payable) the whole or any part of the property concerned is sold, the tax unpaid (or, in the case of a sale of part, the proportionate part of that tax) shall become payable forthwith (or, if the sale precedes the date when the first instalment is payable, on that date) together with any interest accrued under section 233 below.

• (5) References in subsection (4) above to the sale of property shall have effect—

• (a) in a case within subsection (1)(b) above other than a case within subsection (1A) above where the transferee dies before the transferor, as if they included references to any chargeable transfer in which the value transferred is wholly or partly attributable to the value of the property, other than a transfer made on death, and

• (b) in a case within subsection (1)(c) above, as references to the property ceasing to be comprised in the settlement.

• (6) For the purposes of subsection (4) above—

• (a) the sale of an interest or part of an interest in a business shall be treated as a sale of part of the business, and

• (b) the payment, under a partnership agreement or otherwise, of a sum in satisfaction of the whole or part of an interest in a business otherwise than on a sale shall be treated as a sale of the interest or part at the time of payment.

• (7) For the purposes of this section—

• (a) the value of a business or of an interest in a business shall be taken to be its net value;

• (b) the net value of a business is the value of the assets used in the business (including goodwill) reduced by the aggregate amount of any liabilities incurred for the purposes of the business;

• (c) in ascertaining the net value of an interest in a business, no regard shall be had to assets or liabilities other than those by reference to which the net value of the business would have fallen to be ascertained if the tax had been attributable to the entire business; and

• (d) “business” includes a business carried on in the exercise of a profession or vocation, but does not include a business carried on otherwise than for gain.

Shares etc. within section 227

228

• (1) This section applies—

• (a) to shares or securities of a company which immediately before the chargeable transfer gave control of the company—

• (i) in the case of a transfer on death, to the deceased,

• (ii) in the case of a transfer under Chapter III of Part III of this Act, to the trustees, and

• (iii) in any other case, to the transferor;

• (b) to shares or securities of a company which do not fall under paragraph (a) above and are unquoted, if the chargeable transfer is made on death and the condition stated in subsection (2) below is satisfied;

• (c) to shares or securities of a company which do not fall under paragraph (a) above and are unoquoted, if the Board are satisfied that the tax attributable to their value cannot be paid on one sum without undue hardship (assuming, in the case of a chargeable transfer made otherwise than on death, that the shares or securities would be retained by the persons liable to pay the tax);

• (d) to shares of a company which do not fall under paragraph (a) above and are unquoted, if the conditions stated in subsection (3) below are satisfied.

• (2) The condition mentioned in subsection (1)(b) above is that not less than 20 per cent of so much of the tax chargeable on the value transferred as is tax for which the person paying the tax attributable as mentioned in section 227(1) above is liable (in the same capacity) consists of tax attributable to the value of the shares or securities or such other tax (if any) as may by virtue of section 227 be paid by instalments.

• (3) The conditions mentioned in subsection (1)(d) above are that so much of the value transferred (calculated, if the transfer is not made on death, as if no tax were chargeable on it) as is attributable to the shares exceeds £20,000, and that either—

• (a) the nominal value of the shares is not less than 10 per cent of the nominal value of all the shares of the company at the time of the transfer, or

• (b) the shares are ordinary shares and their nominal value is not less than 10 per cent of the nominal value of all ordinary shares of the company at that time.

• (3A) The further condition referred to in section 227(1A) above is that the shares or securities remained unquoted throughout the period beginning with the date of the chargeable transfer and ending with the death of the transferor (or, if earlier, the death of the transferee).

• (4) In this section “ordinary shares” means shares which carry either—

• (a) a right to dividends not restricted to dividends at a fixed rate, or

• (b) a right to conversion into shares carrying such a right as is mentioned in paragraph (a) above.

• (5) In this section “unquoted”, in relation to any shares or securities, means not listed on a recognised stock exchange.

Payment by instalments-woodlands

229

Tax chargeable on such a chargeable transfer as is mentioned in section 129 above may, if the person paying the tax by notice in writing to the Board so elects, be paid by ten equal yearly instalments, of which the first shall be payable six months after the end of the month in which the transfer is made.

Acceptance of property in satisfaction of tax

230

• (1) The Board may, if they think fit and the Secretary of State agrees, on the application of any person liable to pay tax or interest payable under section 233 below, accept in satisfaction of the whole or any part of it any property to which this section applies.

• (2) This section applies to any such land as may be agreed upon between the Board and the person liable to pay tax.

• (3) This section also applies to any objects which are or have been kept in any building—

• (a) if the Board have determined to accept or have accepted that building in satisfaction or part satisfaction of tax or of estate duty, or

• (b) if the building or any interest in it belongs to Her Majesty in right of the Crown or of the Duchy of Lancaster, or belongs to the Duchy of Cornwall or belongs to a Government department or is held for the purposes of a Government department, or

• (c) if the building is one of which the Secretary of State is guardian under the Ancient Monuments and Archaeological Areas Act 1979 , or of which the Welsh Ministers are guardians under Part 2 of the Historic Environment (Wales) Act 2023 or of which the Department of the Environment for Northern Ireland is guardian under the Historic Monuments and Archaeological Objects (Northern Ireland) Order 1995, or

• (d) if the building belongs to any body within Schedule 3 to this Act,

in any case where it appears to the Secretary of State desirable for the objects to remain associated with the building.

• (4) This section also applies to—

• (a) any picture, print, book, manuscript, work of art, scientific object or other thing which the Secretary of State is satisfied is pre-eminent for its national, scientific, historic or artistic interest, and

• (b) any collection or group of pictures, prints, books, manuscripts, works of art, scientific objects or other things if the Secretary of State is satisfied that the collection or group, taken as a whole, is pre-eminent for its national, scientific, historic or artistic interest.

• (5) In this section—

• . . .

• “national interest” includes interest within any part of the United Kingdom;

and in determining under subsection (4) above whether an object or collection or group of objects is pre-eminent, regard shall be had to any significant association of the object, collection or group with a particular place.

• (6) The functions of the Ministers under this section in relation to the acceptance, in satisfaction of tax, of property in which there is a Scottish interest may be exercised separately.

• (7) For the purposes of subsection (6) a Scottish interest in the property exists–

• (a) where the property is located in Scotland; or

• (b) the person liable to pay the tax has expressed a wish or imposed a condition on his offer of the property in satisfaction of tax that it be displayed in Scotland or disposed of or transferred to a body or institution in Scotland.

Powers to transfer property in satisfaction of tax

231

• (1) Where a person has power to sell any property in order to raise money for the payment of tax, he may agree with the Board for the property to be accepted in satisfaction of that tax in pursuance of section 230 above; and, except as regards the nature of the consideration and its receipt and application, any such agreement shall be subject to the same provisions and shall be treated for all purposes as a sale made in the exercise of the said power, and any conveyance or transfer made or purporting to be made to give effect to such an agreement shall have effect accordingly.

• (2) The references in subsection (1) above to tax include references to interest payable under section 233 below.

• (3) This section shall not affect paragraph 1(4) or 3(4) of Schedule 5 to this Act.

Administration actions

232

Where proceedings are pending in any court for the administration of any property to the value of which any tax charged on the value transferred by a chargeable transfer is attributable, the court shall provide, out of any such property in the possession or control of the court, for the payment of any of the tax so attributable, or interest on it, which remains unpaid.

Interest

Interest on unpaid tax

233

• (1) If—

• (a) an amount of tax charged on the value transferred by a chargeable transfer not within paragraph (aa) below and made after 5th April and before 1st October in any year and otherwise than on death remains unpaid after the end of the period ending with April in the next year, or

• (aa) an amount of tax charged under Chapter 3 of Part 3 of this Act on the value transferred by a chargeable transfer remains unpaid after the end of the period of six months beginning with the end of the month in which the chargeable transfer was made, or

• (b) an amount of tax charged on the value transferred by a chargeable transfer not within paragraph (a) or (aa) above remains unpaid after the end of the period of six months beginning with the end of the month in which the chargeable transfer was made, or

• (c) an amount of tax chargeable under section 32, 32A, 79(3A) or 126 above or under Schedule 5 to this Act . . . remains unpaid after the end of the period of six months beginning with the end of the month in which the event occasioning the charge occurs,

then, subject to subsection (1A) below it shall carry interest from the end of that period at the rate applicable under section 178 of the Finance Act 1989.

• (1A) If, under section 30 above, the Board agree to accept property in satisfaction of any tax on terms that the value to be attributed to the property for the purposes of that acceptance is determined as at a date earlier than that on which the property is actually accepted, the terms may provide that the amount of tax which is satisfied by the acceptance of the property shall not carry interest under this section from that date.

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

• (3) Interest payable under this section shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest on instalments

234

• (1) Where tax payable on the value transferred by a chargeable transfer—

• (a) is payable by instalments under section 227 above and is attributable to the value of any shares, securities, business or interest in a business, or to value treated as reduced under Chapter II of Part V of this Act, or

• (b) is payable by instalments under section 229 above,

it shall, for the purposes of any interest to be added to each instalment, be treated as carrying interest from the date at which the instalment is payable.

• (2) Subsection (1) above shall not apply to tax attributable to the value of shares or securities of a company falling within paragraph (a) of subsection (3) below (not being tax attributable to value treated as reduced under Chapter II of Part V of this Act) unless it also falls within paragraph (b) or (c) of that subsection.

• (3) The companies referred to in subsection (2) above are—

• (a) any company whose business consists wholly or mainly of one or more of the following, that is to say, dealing in securities, stocks or shares, land or buildings, or making or holding investments;

• (b) any company whose business consists wholly or mainly in being a holding company (as defined in section 1159 of and Schedule 6 to the Companies Act 2006) of one or more companies not falling within paragraph (a) above;

• (c) any company—

• (i) whose business is wholly that of a market maker or is that of a discount house and (in either case) is carried on in the United Kingdom, or

• (ii) which is of a description set out in regulations under section 107(5) of the Finance Act 1986.

• (4) In this section “market maker” means a person who—

• (a) holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities, stocks or shares at a price specified by him, and

• (b) is recognised as doing so by the Council of The Stock Exchange.

Interest on overpaid tax

235

• (1) Any repayment of an amount paid in excess of a liability for tax or for interest on tax shall carry interest from the date on which the payment was made until the order for repayment is issued at the rate applicable under section 178 of the Finance Act 1989.

• (2) Interest paid under this section shall not constitute income for any tax purposes.

Special cases

236

• (1) Section 233 above shall apply in relation to—

• (a) the amount by which tax chargeable on the value transferred by a chargeable transfer made within seven years of the transferor’s death exceeds what it would have been had the transferor died more than seven years after the transfer, . . .

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

as if the chargeable transfer had been made on the death of the transferor.

• (1A) Section 233 above shall apply in relation to the amount (if any) by which—

• (a) the tax chargeable on the value transferred by a chargeable transfer made under Chapter III of Part III of this Act within the period of seven years ending with the settlor’s death,

exceeds

• (b) what that tax would have been had the settlor died more than seven years after the date of the transfer,

as if the chargeable transfer had been made on the death of the settlor.

• (2) Tax overpaid or underpaid in consequence of—

• (a) section 146(1) above, or section 19(1) of the Inheritance (Provision for Family and Dependants) Act 1975, or

• (b) the corresponding provision of the Inheritance (Provision for Family and Dependants) (Northern Ireland) Order 1979,

shall not carry interest for any period before the order there mentioned is made.

• (3) Tax repayable on a claim under section 146(2), . . . or 150 above shall carry interest (which shall not constitute income for any tax purposes) at the rate applicable under section 178 of the Finance Act 1989 from the date on which the claim is made.

• (4) Tax repayable under section 147(2) above shall carry interest (which shall not constitute income for any tax purposes) at the rate applicable under section 178 of the Finance Act 1989 from the date on which the tax was paid; and tax charged by virtue of section 147(4) above shall carry interest at that rate from the end of the period mentioned in section 233(1)(b) above.

Inland Revenue charge for unpaid tax

Imposition of charge

237

• (1) Except as otherwise provided, where any tax charged on the value transferred by a chargeable transfer, or any interest on it, is for the time being unpaid a charge for the amount unpaid (to be known as an Inland Revenue charge) is by virtue of this section imposed in favour of the Board on—

• (a) any property to the value of which the value transferred is wholly or partly attributable, and

• (b) where property becomes comprised in a settlement by virtue of the chargeable transfer or the chargeable transfer is made under Part III of this Act, any property comprised in the settlement.

• (2) References in subsection (1) above to any property include references to any property directly or indirectly representing it.

• (2A) Where tax is charged by virtue of Schedule A1 on the value transferred by a chargeable transfer, the reference in subsection (1)(a) to property to the value of which the value transferred is wholly or partly attributable includes the UK residential property interest (within the meaning of that Schedule) to which the charge to tax relates.

• (3) Where the chargeable transfer is made on death, personal or movable property situated in the United Kingdom which was beneficially owned by the deceased immediately before his death and vests in his personal representatives is not subject to the Inland Revenue charge; and for this purpose “personal property” does not include leaseholdsand undivided shares in land held on trust for sale, whether statutory or not, and the question whether any property was beneficially owned by the deceased shall be determined without regard to section 49(1) above.

• (3A) In the case of a potentially exempt transfer which proves to be a chargeable transfer—

• (a) property concerned, or an interest in property concerned, which has been disposed of to a purchaser before the transferor’s death is not subject to the Inland Revenue charge, but

• (b) property concerned which has been otherwise disposed of before the death and property which at the death represents any property or interest falling within paragraph (a) above shall be subject to the charge;

and in this subsection “property concerned” means property to the value of which the value transferred by the transfer is wholly or partly attributable.

• (3B) Subsection (3C) below applies to any tax charged—

• (a) under section 32, 32A or 79(3A) above in respect of any property,

• (b) under paragraph 8 of Schedule 4 to this Act in respect of any property, or

• (c) under paragraph 1 or 3 of Schedule 5 to this Act with respect to any object or property.

• (3C) Where any tax to which this subsection applies, or any interest on it, is for the time being unpaid, a charge for the amount unpaid is also by virtue of this section imposed in favour of the Board—

• (a) except where the event giving rise to the charge was a disposal to a purchaser of the property or object in question, on that property or object; and

• (b) in the excepted case, on any property for the time being representing that property or object.

• (4) No heritable property situated in Scotland is subject to the Inland Revenue charge, but where such property is disposed of any other property for the time being representing it is subject to the charge to which the first-mentioned property would have been subject but for this subsection.

• (5) The Inland Revenue charge imposed on any property shall take effect subject to any incumbrance on it which is allowable as a deduction in valuing that property for the purposes of the tax.

• (6) Except as provided by section 238 below, a disposition of property subject to an Inland Revenue charge shall take effect subject to that charge.

Effect of purchases

238

• (1) Where property subject to an Inland Revenue charge, or an interest in such property, is disposed of to a purchaser, then if at the time of the disposition—

• (a) in the case of land in England and Wales, the charge was not registered as a land charge or, in the case of registered land, was not protected by notice on the register, or

• (b) in the case of land in Northern Ireland the title to which is registered under the Land Registration Act (Northern Ireland) 1970, the charge was not entered as a burden on the appropriate register maintained under that Act or was not protected by a caution or inhibition under that Act or, in the case of other land in Northern Ireland, the purchaser had no notice of the facts giving rise to the charge, or

• (c) in the case of personal property situated in the United Kingdom other than such property as is mentioned in paragraph (a) or (b) above, and of any property situated outside the United Kingdom, the purchaser had no notice of the facts giving rise to the charge, or

• (d) in the case of any property, a certificate of discharge had been given by the Board under section 239 below and the purchaser had no notice of any fact invalidating the certificate,

the property or interest shall then cease to be subject to the charge but the property for the time being representing it shall be subject to it.

• (2) Where property subject to an Inalnd Revenue charge, or an interest in such property, is disposed of to a purchaser in circumstances where it does not then cease to be subject to the charge, it shall cease to be subject to it at the end of the period of six years beginning with the later of—

• (a) the date on which the tax became due, and

• (b) the date on which a full and proper account of the property was first delivered to the Board in connection with the chargeable transfer concerned.

• (3) In this section “the time of the disposition” means—

• (a) in relation to registered land—

• (i) if the disposition is required to be completed by registration, the time of registration, and

• (ii) otherwise, the time of completion,

• (b) in relation to other property, the time of completion.

Certificates of discharge

Certificates of discharge

239

• (1) Where application is made to the Board by a person liable for any tax on the value transferred by a chargeable transfer which is attributable to the value of property specified in the application, the Board, on being satisfied that the tax so attributable has been or will be paid, may give a certificate to that effect, and shall do so if the chargeable transfer is one made on death or the transferor has died.

• (2) Where tax is or may be chargeable on the value transferred by a transfer of value and—

• (a) application is made to the Board after the expiration of two years from the transfer (or, if the Board think fit to entertain the application, at an earlier time) by a person who is or might be liable for the whole or part of the tax, and

• (b) the applicant delivers to the Board, if the transfer is one made on death, a full statement to the best of his knowledge and belief of all property included in the estate of the deceased immediately before his death and, in any other case, a full and proper account under this Part of this Act,