LegalizeReform history
Inheritance Tax Act 1984
74 versions
· 1984-07-31
2025-04-06
Inheritance Tax Act 1984
2025-03-21
Inheritance Tax Act 1984
2025-03-20
Inheritance Tax Act 1984
2024-11-04
Inheritance Tax Act 1984
2024-10-30
Inheritance Tax Act 1984
2024-10-21
Inheritance Tax Act 1984
2024-05-24
Inheritance Tax Act 1984
2022-06-06
Inheritance Tax Act 1984
2021-07-26
Inheritance Tax Act 1984
2021-06-10
Inheritance Tax Act 1984
2020-12-31
Inheritance Tax Act 1984
2020-07-22
Inheritance Tax Act 1984
2019-02-12
Inheritance Tax Act 1984
2018-04-01
Inheritance Tax Act 1984
2017-11-16
Inheritance Tax Act 1984
2016-09-15
Inheritance Tax Act 1984
2015-11-19
Inheritance Tax Act 1984
2015-11-18
Inheritance Tax Act 1984
2015-04-06
Inheritance Tax Act 1984
2015-03-26
Inheritance Tax Act 1984
2014-07-17
Inheritance Tax Act 1984
2014-04-06
Inheritance Tax Act 1984
2013-07-17
Inheritance Tax Act 1984
2013-04-01
Inheritance Tax Act 1984
2012-12-31
Inheritance Tax Act 1984
2012-07-17
Inheritance Tax Act 1984
2012-06-20
Inheritance Tax Act 1984
2012-04-01
Inheritance Tax Act 1984
2011-07-19
Inheritance Tax Act 1984
2011-06-16
Inheritance Tax Act 1984
2010-04-08
Inheritance Tax Act 1984
2010-04-01
Inheritance Tax Act 1984
2010-01-12
Inheritance Tax Act 1984
2010-01-01
Inheritance Tax Act 1984
2009-12-01
Inheritance Tax Act 1984
2009-10-31
Inheritance Tax Act 1984
2009-10-01
Inheritance Tax Act 1984
2009-07-21
Inheritance Tax Act 1984
2009-06-01
Inheritance Tax Act 1984
2009-04-06
Inheritance Tax Act 1984
2009-04-01
Inheritance Tax Act 1984
2009-03-28
Inheritance Tax Act 1984
2008-07-21
Inheritance Tax Act 1984
2008-04-06
Inheritance Tax Act 1984
2008-04-01
Inheritance Tax Act 1984
2007-10-09
Inheritance Tax Act 1984
2007-07-19
Inheritance Tax Act 1984
2007-04-06
Inheritance Tax Act 1984
2006-10-01
Inheritance Tax Act 1984
2006-07-19
Inheritance Tax Act 1984
2006-05-02
Inheritance Tax Act 1984
2006-04-06
Inheritance Tax Act 1984
2006-04-03
Inheritance Tax Act 1984
2006-03-22
Inheritance Tax Act 1984
2005-12-05
Inheritance Tax Act 1984
2005-04-07
Inheritance Tax Act 1984
2005-04-06
Inheritance Tax Act 1984
2005-03-16
Inheritance Tax Act 1984
2004-12-31
Inheritance Tax Act 1984
2004-11-01
Inheritance Tax Act 1984
2004-07-22
Inheritance Tax Act 1984
Changes on 2004-07-22
@@ -5044,3180 +5044,3212 @@
- (2) The taxpayer shall be liable—
- (a) to a penalty of £100; and
- (b) to a further penalty not exceeding £60 for every day after the day on which the failure has been declared by a court or the Special Commissioners and before the day on which the account is delivered.
- (3) If—
- (a) proceedings in which the failure could be declared are not commenced before the end of the relevant period, and
- (b) the taxpayer has not delivered the account by the end of that period,
he shall be liable to a further penalty of £100.
- (4) In subsection (3) above “*the relevant period*” means the period of six months beginning immediately after the end of the period given by section 216(6) or (7) or section 217 above (whichever is applicable).
- (4A) Without prejudice to any penalties under subsections (2) and (3) above, if—
- (a) the failure by the taxpayer to deliver the account continues after the anniversary of the end of the period given by section 216(6) or (7) (whichever is applicable), and
- (b) there would have been a liability to tax shown in the account,
the taxpayer shall be liable to a penalty of an amount not exceeding £3,000.
- (5) If the taxpayer proves that his liability to tax does not exceed a particular amount, the penalty under subsection (2)(a) above, together with any penalty under subsection (3) above, shall not exceed that amount.
- (6) A person shall not be liable to a penalty under subsection (2)(b) above if he delivers the account required by section 216 or 217 before proceedings in which the failure could be declared are commenced.
- (7) A person who has a reasonable excuse for failing to deliver an account shall not be liable by reason of that failure to a penalty under this section, unless he fails to deliver the account without unreasonable delay after the excuse has ceased.
#### Failure to appear before Special Commissioners, etc.
##### 246
#### Provision of incorrect information
##### 247
- (1) If any person liable for any tax on the value transferred by a chargeable transfer fraudulently or negligently delivers, furnishes or produces to the Board any incorrect account, information or document, he shall be liable to a penalty not exceeding the difference mentioned in subsection (2) below.
- (2) The difference referred to in subsection (1) above is the amount by which the tax for which that person is liable exceeds what would be the amount of that tax if the facts were as shown in the account, information or document.
- (3) Any person not liable for tax on the value transferred by a chargeable transfer who fraudulently or negligently furnishes or produces to the Board any incorrect information or document in connection with the transfer shall be liable to a penalty not exceeding £3,000.
- (4) Any person who assists in or induces the delivery, furnishing or production in pursuance of this Part of this Act of any account, information or document which he knows to be incorrect shall be liable to a penalty not exceeding £3,000 .
#### Failure to remedy errors
##### 248
- (1) If after any account, information or document has been delivered, furnished or produced by any person without fraud or negligence it comes to his notice that it was incorrect in any material respect it shall be treated for the purposes of section 247 above as having been negligently delivered, furnished or produced unless the error is remedied without unreasonable delay.
- (2) If after any account, information or document has been delivered, furnished or produced by any person in pursuance of this Part of this Act it comes to the notice of any other person that it contains an error whereby tax for which that other person is liable has been or might be underpaid, that other person shall inform the Board of the error; and if he fails to do so without unreasonable delay he shall be liable to the penalty to which he would be liable under section 247 above if the account, information or document had been delivered, furnished or produced by him and the case were one of negligence.
#### Recovery of penalties
##### 249
- (1) All proceedings for the recovery of penalties under this Part of this Act shall be commenced by the Board, or in Scotland, by the Board or the Lord Advocate.
- (2) Any such proceedings may be commenced either before the Special Commissioners or in the High Court or the Court of Session and shall, if brought in the High Court, be deemed to be civil proceedings by the Crown within the meaning of Part II of the Crown Proceedings Act 1947 or, as the case may be, that Part as for the time being in force in Northern Ireland.
- (3) Where any such proceedings are brought before the Special Commissioners, an appeal shall lie from their decision to the High Court or, as the case may be, the Court of Session—
- (a) by either party, on a question of law, and
- (b) by the defendant (or, in Scotland, defender) against the amount of any penalty awarded; and on appeal under paragraph (b) above the Court may either confirm the decision or reduce or increase the sum awarded.
- (4) Proceedings under this section before the Special Commissioners shall be by way of information in writing made to them, and upon summons issued by them to the defendant (or defender) to appear before them at a time and place stated in the summons, and they shall hear and determine each case in a summary way.
- (5) References in this section to the Court of Session are references to that Court as the Court of Exchequer in Scotland.
#### Time limit for recovery
##### 250
- (1) No proceedings for the recovery of a penalty under this Part of this Act shall be brought after the end of the period of three years beginning with the date on which the amount of the tax properly payable in respect of the chargeable transfer concerned was notified by the Board to the person or one of the persons liable for the tax or any part of it.
- (2) Where the person who has incurred any such penalty has died, any proceedings for the recovery of the penalty which have been or could have been commenced against him may be continued or commenced against his personal representatives, and any penalty awarded in proceedings so continued or commenced shall be a debt due from and payable out of his estate.
#### Summary award
##### 251
- (1) An appeal shall lie to the High Court or the Court of Session against the summary determination by the Special Commissioners of a penalty under regulation 24 of the Special Commissioners (Jurisdiction and Procedure) Regulations 1994 in proceedings relating to inheritance tax.
- (2) On such an appeal the Court may either confirm or reverse the determination of the Special Commissioners or reduce or increase the sum determined.
#### Effect of award by Special Commissioners
##### 252
Any penalty awarded by the Special Commisioners shall be recoverable by the Board as a debt due to the Crown.
#### Mitigation of penalties
##### 253
The Board may in their discretion mitigate any penalty, or stay or compound any proceedings for recovery of any penalty, and may also, after judgment, further mitigate or entirely remit the penalty.
### Miscellaneous
#### Evidence
##### 254
- (1) For the purposes of the preceding provisions of this Part of this Act, a notice under section 221 above specifying any determination which can no longer be varied or quashed on appeal shall be sufficient evidence of the matters determined.
- (2) In any proceedings for the recovery of tax or interest on tax, a certificate by an officer of the Board—
- (a) that the tax or interest is due, or
- (b) that, to the best of his knowledge and belief, it has not been paid,
shall be sufficient evidence that the sum mentioned in the certificate is due or, as the case may be, unpaid; and a document purporting to be such a certificate shall be deemed to be such a certificate unless the contrary is proved.
#### Determination of questions on previous view of law
##### 255
Where any payment has been made and accepted in satisfaction of any liability for tax and on a view of the law then generally received or adopted in practice, any question whether too little or too much has been paid or what was the right amount of tax payable shall be determined on the same view, notwithstanding that it appears from a subsequent legal decision or otherwise that the view was or may have been wrong.
#### Regulations about accounts, etc.
##### 256
- (1) The Board may make regulations—
- (a) dispensing with the delivery of accounts under section 216 above in such cases as may be specified in or determined under the regulations;
- (aa) requiring persons who by virtue of regulations under paragraph (a) above are not required to deliver accounts under section 216 above to produce to the Board, in such manner as may be specified in or determined under the regulations, such information or documents as may be so specified or determined
- (b) discharging, subject to such restrictions as may be so specified or determined , property from an Inland Revenue charge and persons from further claims for tax in cases other than those mentioned in section 239 above;
- (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (d) modifying section 264(8) below in cases where the delivery of an account has been dispensed with under the regulations.
- (1A) Regulations under subsection (1)(aa) may in particular—
- (a) provide that information or documents must be produced to the Board by producing it or them to—
- (i) a probate registry in England and Wales;
- (ii) the sheriff in Scotland;
- (iii) the Probate and Matrimonial Office in Northern Ireland;
- (b) provide that information or documents produced as specified in paragraph (a) is or are to be treated for any or all purposes of this Act as produced to the Board;
- (c) provide for the further transmission to the Board of information or documents produced as specified in paragraph (a).
- (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (3) Regulations under this section may contain such supplementary or incidental provisions as the Board think fit and may make different provision for different cases .
- (3A) Regulations under this section may only be made—
- (a) in relation to England and Wales or Northern Ireland, after consulting the Lord Chancellor;
- (b) in relation to Scotland, after consulting the Scottish Ministers.
- (4) The power to make regulations under this section shall be exercisable by statutory instrument, which shall be subject to annulment in pursuance of a resolution of the House of Commons.
#### Form etc. of accounts
##### 257
- (1) All accounts and other documents required for the purposes of this Act shall be in such form and shall contain such particulars as may be prescribed by the Board.
- (2) All accounts to be delivered to the Board under this Act shall be supported by such books, papers and other documents, and verified (whether on oath or otherwise) in such manner, as the Board may require.
- (3) For the purposes of this Act, an account delivered to a probate registry pursuant to arrangements made between the President of the Family Division and the Board or delivered to the Probate and Matrimonial Office in Northern Ireland pursuant to arrangements made between the Lord Chancellor and the Board shall be treated as an account delivered to the Board.
#### Service of documents
##### 258
A notice or other document which is to be served on a person under this Act may be delivered to him or left at his usual or last known place of residence or served by post, addressed to him at his usual or last known place of residence or his place of business or employment.
#### Inspection of records
##### 259
Section 16 of the Stamp Act 1891, section 56 of the Finance Act 1946 and section 27 of the Finance (No.2) Act (Northern Ireland) 1946 (inspection of public records and records of unit trusts) shall apply in relation to inheritance tax as they apply in relation to stamp duties.
#### Inland Revenue Regulation Act 1890
##### 260
Sections 21, 22 and 35 of the Inland Revenue Regulation Act 1890 (proceedings for fines, etc.) shall not apply in relation to inheritance tax.
#### Scotland: inventories
##### 261
In the application of this Part of this Act to Scotland, references to an account required to be delivered to the Board by the personal representatives of a deceased person, however expressed, shall be construed as references to such an inventory or additional inventory as is mentioned in section 38 of the Probate and Legacy Duties Act 1808 which has been duly exhibited as required by that section.
## PART IX — MISCELLANEOUS AND SUPPLEMENTARY
### Miscellaneous
#### Tax chargeable in certain cases of future payments, etc.
##### 262
- (1) Where a disposition made for a consideration in money or money’s worth is a transfer of value and any payments made or assets transferred by the transferor in pursuance of the disposition are made or transferred more than one year after the disposition is made, tax (if any) shall be charged as if—
- (a) any payment made or asset transferred in pursuance of the disposition were made or transferred in pursuance of a separate disposition made, without consideration, at the time the payment is made or the asset is transferred, and
- (b) the amount of the payment made or the value of the asset transferred in pursuance of each of those separate dispositions were the chargeable portion of the payment or asset.
- (2) For the purposes of this section the chargeable portion of any payment made or any asset transferred at any time shall be such portion of its value at that time as is found by applying to it the fraction of which—
- (a) the numerator is the value actually transferred by the disposition first mentioned in subsection (1) above (calculated as if no tax were payable on it), and
- (b) the denominator is the value, at the time of that disposition, of the aggregate of the payments made or to be made and assets transferred or to be transferred by the transferor in pursuance of it.
#### Annuity purchased in conjunction with life policy
##### 263
- (1) Where—
- (a) a policy of life insurance is issued in respect of an insurance made after 26th March 1974 or is after that date varied or substituted for an earlier policy, and
- (b) at the time the insurance is made or at any earlier or later date an annuity on the life of the insured is purchased, and
- (c) the benefit of the policy is vested in a person other than the person who purchased the annuity,
then, unless it is shown that the purchase of the annuity and the making of the insurance (or, as the case may be, the substitution or variation) were not associated operations, the person who purchased the annuity shall be treated as having made a transfer of value by a disposition made at the time the benefit of the policy became so vested (to the exclusion of any transfer of value which, apart from this section, he might have made as a result of the vesting, or of the purchase and the vesting being associated operations).
- (2) The value transferred by that transfer of value shall be equal to whichever of the following is less, namely,—
- (a) the aggregate of—
- (i) the value of the consideration given for the annuity, and
- (ii) any premium paid or other consideration given under the policy on or before the transfer; and
- (b) the value of the greatest benefit capable of being conferred at any time by the policy, calculated as if that time were the date of the transfer.
- (3) The preceding provisions of this section shall apply, with the necessary modifications, where a contract for an annuity payable on a person’s death is after 26th March 1974 made or varied or substituted for or replaced by such a contract or a policy of life insurance as they apply where a policy of life insurance is issued, varied or substituted as mentioned in subsection (1) above.
#### Transfers reported late
##### 264
- (1) This section has effect where a person has made a transfer of value (“the earlier transfer”) which—
- (a) is not notified to the Board in an account under section 216 above or by information furnished under section 219 above before the expiration of the period specified in section 216 for the delivery of accounts, and
- (b) is not discovered until after payment has been accepted by the Board in full satisfaction of the tax on the value transferred by another transfer of value (“the later transfer”) made by him on or after the day on which he made the earlier transfer.
- (2) Where the earlier transfer is made in the period of ten years ending with the date of the later transfer there shall be charged on the value transferred by the earlier transfer, in addition to any tax chargeable on it apart from this section, an amount of tax equal to the difference, if any, between—
- (a) the tax which, having regard to the earlier transfer, was properly chargeable on the value transferred by the later transfer, and
- (b) the payment accepted by the Board in full satisfaction of the tax chargeable on that value;
and any such difference shall not be chargeable on the value transferred by the later transfer.
- (3) Where in the period mentioned in subsection (2) above there have been two or more earlier transfers the reference in paragraph (a) of that subsection to the earlier transfer shall be construed as a reference to both or all of those transfers, but the amount of tax chargeable under that subsection in respect of each of them shall, subject to subsection (4) below, be reduced in the proportion which the value transferred by it bears to the aggregate of the values transferred by it and the other or others.
- (4) Where the earlier transfers mentioned in subsection (3) above include a settled transfer, that is to say, a transfer in the case of which an amount in full satisfaction of the tax chargeable in respect of it under subsection (2) above has been paid to and accepted by the Board before the discovery of one or more of the other earlier transfers,—
- (a) no further tax shall be chargeable under subsection (2) above in respect of the settled transfer in consequence of regard being had under paragraph (a) of that subsection to the subsequently discovered transfer or transfers;
- (b) the amount so paid and accepted shall reduce the amount chargeable under subsection (2) above in respect of the subsequently discovered transfer or transfers; and
- (c) if there are two or more subsequently discovered transfers, the value transferred by the settled transfer shall be disregarded in calculating under subsection (3) above the reduction in the amount of tax chargeable in respect of each of them.
- (5) Where the later transfer referred to in subsection (2) above is itself an earlier transfer in relation to another later transfer the references in paragraphs (a) and (b) of that subsection to tax chargeable on the value transferred by it are references to tax so chargeable apart from this section.
- (6) Subsection (2) above shall not increase the amount in respect of which interest is payable under section 233 above in relation to the earlier transfer in respect of any period falling before the expiration of six months from the date on which it was discovered.
- (7) Where, apart from this subsection, the earlier transfer would be wholly or partly exempt by reason of some or all of the value transferred by it falling within a limit applicable to an exemption, then, if tax has been accepted as mentioned in subsection (1)(b) above on the basis that the later transfer is partly exempt by reason of part of the value thereby transferred falling within that limit—
- (a) tax shall not be chargeable on that part of the value transferred by the later transfer, but
- (b) a corresponding part of the value transferred by the earlier transfer shall be treated as falling outside that limit.
- (8) Subsection (1)(b) above shall apply to a transfer in respect of which no tax is chargeable because the rate of tax applicable under section 7 above is nil as if payment had been accepted when the transfer was notified in an account under section 216 above, and subsection (2)(b) above shall apply in relation to any such transfer as if the amount of the payment were nil.
- (9) For the purposes of this section a transfer is discovered—
- (a) if it is notified under the provisions mentioned in subsection (1)(a) above after the expiration of the period there mentioned, on the date on which it is so notified;
- (b) in any other case, on the date on which the Board give notice of a determination in respect of the transfer under section 221 above.
#### Chargeable transfers affecting more than one property
##### 265
Where the value transferred by a chargeable transfer is determined by reference to the values of more than one property the tax chargeable on the value transferred shall be attributed to the respective values in the proportions which they bear to their aggregate, but subject to section 54B(3) above and to any provision reducing the amount of tax attributable to the value of any particular property.
#### More than one chargeable transfer on one day
##### 266
- (1) Where the value transferred by more than one chargeable transfer made by the same person on the same day depends on the order in which the transfers are made, they shall be treated as made in the order which results in the lowest value chargeable.
- (2) Subject to subsection (1) above, the rate at which the tax is charged on the values transferred by two or more chargeable transfers made by the same person on the same day shall be the effective rate at which tax would have been charged if those transfers had been a single chargeable transfer of the same total value.
- (3) The chargeable transfers referred to in subsections (1) and (2) above do not include a transfer made on the death of the transferor.
- (4) Chargeable transfers under Chapter III of Part III of this Act shall if they relate to the same settlement be treated for the purposes of subsections (1) and (2) above as made by the same person.
#### Persons treated as domiciled in United Kingdom
##### 267
- (1) A person not domiciled in the United Kingdom at any time (in this section referred to as “the relevant time”) shall be treated for the purposes of this Act as domiciled in the United Kingdom (and not elsewhere) at the relevant time if—
- (a) he was domiciled in the United Kingdom within the three years immediately preceding the relevant time, or
- (b) he was resident in the United Kingdom in not less than seventeen of the twenty years of assessment ending with the year of assessment in which the relevant time falls.
- (2) Subsection (1) above shall not apply for the purposes of section 6(2) or (3) or 48(4) above and shall not affect the interpretation of any such provision as is mentioned in section 158(6) above.
- (3) Paragraph (a) of subsection (1) above shall not apply in relation to a person who (apart from this section) has not been domiciled in the United Kingdom at any time since 9th December 1974, and paragraph (b) of that subsection shall not apply in relation to a person who has not been resident there at any time since that date; and that subsection shall be disregarded—
- (a) in determining whether settled property which became comprised in the settlement on or before that date is excluded property,
- (b) in determining the settlor’s domicile for the purposes of section 65(8) above in relation to settled property which became comprised in the settlement on or before that date, and
- (c) in determining for the purposes of section 65(8) above whether the condition in section 82(3) above is satisfied in relation to such settled property.
- (4) For the purposes of this section the question whether a person was resident in the United Kingdom in any year of assessment shall be determined as for the purposes of income tax . . ..
### Interpretation
#### Associated operations
##### 268
- (1) In this Act “*associated operations*” means, subject to subsection (2) below, any two or more operations of any kind, being—
- (a) operations which affect the same property, or one of which affects some property and the other or others of which affect property which represents, whether directly or indirectly, that property, or income arising from that property, or any property representing accumulations of any such income, or
- (b) any two operations of which one is effected with reference to the other, or with a view to enabling the other to be effected or facilitating its being effected, and any further operation having a like relation to any of those two, and so on.
whether those operations are effected by the same person or different persons, and whether or not they are simultaneous; and “*operation*” includes an omission.
- (2) The granting of a lease for full consideration in money or money’s worth shall not be taken to be associated with any operation effected more than three years after the grant, and no operation effected on or after 27th March 1974 shall be taken to be associated with an operation effected before that date.
- (3) Where a transfer of value is made by associated operations carried out at different times it shall be treated as made at the time of the last of them; but where any one or more of the earlier operations also constitute a transfer of value made by the same transferor, the value transferred by the earlier operations shall be treated as reducing the value transferred by all the operations taken together, except to the extent that the transfer constituted by the earlier operations but not that made by all the operations taken together is exempt under section 18 above.
#### Control of company
##### 269
- (1) For the purposes of this Act a person has control of a company at any time if he then has the control of powers of voting on all questions affecting the company as a whole which if exercised would yield a majority of the votes capable of being exercised on them.
- (2) For the purposes of this Act shares or securities shall be deemed to give a person control of a company if, together with any shares or securities which are related property within the meaning of section 161 above, they would be sufficient to give him control of the company (as defined in subsection (1) above).
- (3) Where shares or securities are comprised in a settlement, any powers of voting which they give to the trustees of the settlement shall for the purposes of subsection (1) above be deemed to be given to the person beneficially entitled in possession to the shares or securities (except in a case where no individual is so entitled).
- (4) Where a company has shares or securities of any class giving powers of voting limited to either or both of—
- (a) the question of winding up the company, and
- (b) any question primarily affecting shares or securities of that class,
the reference in subsection (1) above to all questions affecting the company as a whole shall have effect as a reference to all such questions except any in relation to which those powers are capable of being exercised.
#### Connected persons
##### 270
For the purposes of this Act any question whether a person is connected with another shall be determined as, for the purposes of the 1992 Act, it falls to be determined under section 286 of that Act, but as if in that section “*relative*” included uncle, aunt, nephew and niece and “*settlement*”, “*settlor*” and “*trustee*” had the same meanings as in this Act.
#### Property of corporations sole
##### 271
References in this Act (except section 59) to property to which a person is beneficially entitled do not include references to property to which a person is entitled as a corporation sole.
#### General interpretation
##### 272
In this Act, except where the context otherwise requires,—
- “*amount*” includes value;
- “*authorised unit trust*” means a scheme which is a unit trust scheme for the purposes of section 469 of the Taxes Act 1988 (see subsection (7) of that section) and in the case of which an order under section 243 of the Financial Services and Markets Act 2000 is in force;
- “*barrister*” includes a member of the Faculty of Advocates;
- “*the Board*” means the Commissioners of Inland Revenue;
- “*charity*” and “*charitable*” have the same meanings as in the Income Tax Acts;
- “*conditionally exempt transfer*” shall be construed in accordance with section 30(2) above;
- “*disposition*” includes a disposition effected by associated operations;
- “*estate*” shall be construed in accordance with sections 5, 55 and 151(4) above;
- “*estate duty*” includes estate duty under the law of Northern Ireland;
- “*excluded property*” shall be construed in accordance with sections 6 and 48 above;
- “*Government department*” includes a Northern Ireland department;
- “*heritable security*” means any security capable of being constituted over any interest in land by disposition or assignation of that interest in security of any debt and of being recorded in the General Register of Sasines;
- “*incumbrance*” includes any heritable security, or other debt or payment secured upon heritage;
- “*Inland Revenue charge*” means a charge imposed by virtue of section 237 above;
- “*land*” does not include any estate interest or right by way of mortgage or other security;
- “*local authority*” has the meaning given by section 842A of the Taxes Act 1988;
- “*mortgage*” includes a heritable security and a security constituted over any interest in movable property;
- “*open-ended investment company*” means an open-ended investment company within the meaning given by section 236 of the Financial Services and Markets Act 2000 which is incorporated in the United Kingdom;
- “*personal representatives*” includes any person by whom or on whose behalf an application for a grant of administration or for the resealing of a grant made outside the United Kingdom is made, and any such person as mentioned in section 199(4)(a) above;
- “*property*” includes rights and interests of any description but does not include a settlement power ;
- “*purchaser*” means a purchaser in good faith for consideration in money or money’s worth other than a nominal consideration and includes a lessee, mortgagee or other person who for such consideration acquires an interest in the property in question;
- “*quoted*”, in relation to any shares or securities, means listed on a recognised stock exchange or dealt in on the Unlisted Securities Market and “*unquoted*”, in relation to any shares or securities, means neither so listed nor so dealt in;
- “*reversionary interest*” has the meaning given by section 47 above;
- “*settlement power*” has the meaning given by section 47A above;
- “*settlement*” and “*settled property*” shall be construed in accordance with section 43 above;
- “*settlor*” shall be construed in accordance with section 44 above;
- “*Special Commissioners*” has the same meaning as in the Taxes Management Act 1970;
- “*tax*” means inheritance tax;
- “*the Taxes Act 1970*” means the Income and Corporation Taxes Act 1970;
- “*The Taxes Act 1988*” means the Income and Corporation Taxes Act 1988;
- “*trustee*” shall be construed in accordance with section 45 above.
- and
- “*the 1992 Act*” means the Taxation of Chargeable Gains Act 1992.
### Supplementary
#### Transition from estate duty
##### 273
Schedule 6 to this Act shall have effect.
#### Commencement
##### 274
- (1) This Act shall come into force on 1st January 1985, but shall not apply to transfers of value made before that date or to other events before that date on which capital transfer tax is chargeable or would be chargeable but for an exemption, exception or relief.
- (2) Subsection (1) above shall have effect subject to section 275 below, to Schedule 7 to this Act and to any other provision to the contrary.
#### Continuity, and construction of references to old and new law
##### 275
- (1) The continuity of the operation of the law relating to capital transfer tax shall not be affected by the substitution of this Act for the repealed enactments.
- (2) Any reference, whether express or implied, in any enactment, instrument or document (including this Act and any enactment amended by Schedule 8 to this Act) to, or to things done or falling to be done under or for the purposes of, any provision of this Act shall, if and so far as the nature of the reference permits, be construed as including, in relation to the times, circumstances or purposes in relation to which the corresponding provision in the repealed enactments has or had effect, a reference to, or as the case may be, to things done or falling to be done under or for the purposes of, that corresponding provision.
- (3) Any reference, whether express or implied, in any enactment, instrument or document (including the repealed enactments and enactments, instruments and documents passed or made after the passing of this Act) to, or to things done or falling to be done under or for the purposes of, any of the repealed enactments shall, if and so far as the nature of the reference permits, be construed as including, in relation to the times, circumstances or purposes in relation to which the corresponding provision of this Act has effect, a reference to, or as the case may be, to things done or falling to be done under or for the purposes of, that corresponding provision.
- (4) Subsection (2) above shall have effect without prejudice to section 17(2) of the Interpretation Act 1978.
- (5) In this section “*the repealed enactments*” means the enactments repealed by this Act.
#### Consequential amendments
##### 276
Schedule 8 to this Act shall have effect.
#### Repeals
##### 277
The enactments mentioned in Schedule 9 to this Act are hereby repealed to the extent specified in the third column of that Schedule.
#### Short title
##### 278
This Act may be cited as the Inheritance Tax Act 1984.
## SCHEDULE 1
## SCHEDULE 2
### Interpretation
##### 1
In this Schedule—
- (a) references to a reduction are to a reduction of tax by the substitution of a new Table in Schedule 1 to this Act, and
- (b) references to something happening before or after a reduction are to its happening before or, as the case may be, on or after the date on which the Table giving effect to the reduction comes into force.
### Death within three years of chargeable transfer
##### 2
Where a person who has made a chargeable transfer other than a potentially exempt transfer) before a reduction dies after that reduction (or after that and one or more subsequent reductions) and within seven years of the transfer, additional tax shall be chargeable by reason of his death only if, and to the extent that, it would have been so chargeable if . . . the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had applied to that transfer.
### Settlement without interest in possession
##### 3
Where tax is chargeable under section 65 of this Act on any occasion after a reduction and the rate at which it is charged is determined under section 69 by reference to the rate that was (or would have been) charged under section 64 on an occasion before that reduction (or before that and one or more other reductions), the rate charged on the later occasion shall be determined as if . . . the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had been in force on the earlier occasion.
### Disposal of trees etc. following exemption on death
##### 4
Where the value of any trees or underwood has been left out of account under Chapter III of Part V of this Act in determining the value transferred by the chargeable transfer made on a death before a reduction and tax is chargeable under section 126 on a disposal of the trees or underwood after that reduction (or after that and one or more subsequent reductions) the rate or rates mentioned in section 128 shall be determined as if . . . the Tables in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had applied to that transfer.
### Conditionally exempt transfers
##### 5
Where tax is chargeable under section 32 or 32A of this Act by reason of a chargeable event occurring after a reduction and the rate or rates at which it is charged fall to be determined under the provisions of section 33(1)(b)(ii) by reference to a death which occurred before that reduction (or before that and one or more other reductions) those provisions shall apply as if the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had been in force at the time of the death.
### Maintenance funds for historic buildings
##### 6
Where tax is chargeable under paragraph 8 of Schedule 4 to this Act on any occasion after a reduction and the rate at which it is charged falls to be determined under paragraph 14 of that Schedule by reference to a death which occurred before that reduction (or before that and one or more other reductions) paragraph 14 shall apply as if the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had been in force at the time of the death.
### Mutual transfers
##### 7
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## SCHEDULE 3
## SCHEDULE 4
## PART I — TREASURY DIRECTIONS
### Giving of directions
##### 1
- (1) If the conditions mentioned in paragraph 2(1) below are fulfilled in respect of settled property, the Treasury shall, on a claim made for the purpose, give a direction under this paragraph in respect of the property.
- (2) The Treasury may give a direction under this paragraph in respect of property proposed to be comprised in a settlement or to be held on particular trusts in any case where, if the property were already so comprised or held, they would be obliged to give the direction.
- (3) Property comprised in a settlement by virtue of a transfer of value made before the coming into force of section 94 of the Finance Act 1982 and exempt under section 84 of the Finance Act 1976 shall be treated as property in respect of which a direction has been given under this paragraph.
### Conditions
##### 2
- (1) The conditions referred to in paragraph 1 above are—
- (a) that the Treasury are satisfied—
- (i) that the trusts on which the property is held comply with the requirements mentioned in paragraph 3 below, and
- (ii) that the property is of a character and amount appropriate for the purposes of those trusts; and
- (b) that the trustees—
- (i) are approved by the Treasury,
- (ii) include a trust corporation, a solicitor, an accountant
or a member of such other professional body as the Treasury may allow in the case of the property concerned, and
- (iii) are, at the time the direction is given, resident in the United Kingdom.
- (2) For the purposes of this paragraph trustees shall be regarded as resident in the United Kingdom if—
- (a) the general administration of the trusts is ordinarily carried on in the United Kingdom, and
- (b) the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are resident in the United Kingdom;
and where a trustee is a corporation, the question whether the trustee is resident in the United Kingdom shall, for the purposes of paragraph (b) above, be determined as for the purposes of corporation tax.
- (3) In this paragraph—
- “*accountant*” means a member of an incorporated society of accountants;
- “*trust corporation*” means a person that is a trust corporation for the purposes of the Law of Property Act 1925 or for the purposes of Article 9 of the Administration of Estates (Northern Ireland) Order 1979.
##### 3
- (1) The requirements referred to in paragraph 2(1)(a)(i) above are (subject to paragraph 4 below)—
- (a) that none of the property held on the trusts can at any time in the period of six years beginning with the date on which it became so held be applied otherwise than—
- (i) for the maintenance, repair or preservation of, or making provision for public access to, property which is for the time being qualifying property, for the maintenance, repair or preservation of property held on the trusts or for such improvement of property so held as is reasonable having regard to the purposes of the trusts, or for defraying the expenses of the trustees in relation to the property so held;
- (ii) as respects income not so applied and not accumulated, for the benefit of a body within Schedule 3 to this Act or of a qualifying charity; and
- (b) that none of the property can, on ceasing to be held on the trusts at any time in that period or, if the settlor dies in that period, at any time before his death, devolve otherwise than on any such body or charity; and
- (c) that income arising from property held on the trusts cannot at any time after the end of that period be applied except as mentioned in paragraph (a)(i) or (ii) above.
- (2) Property is qualifying property for the purposes of subparagraph (1) above if—
- (a) it has been designated under section 34(1) of the Finance Act 1975 or section 77(1)(b), (c), (d) or (e) of the Finance Act 1976 or section 31(1)(b), (c), (d) or (e) of this Act; and
- (b) the requisite undertaking has been given with respect to it under section 34 of the Finance Act 1975 or under section 76, 78(5)(b) or 82(3) of the Finance Act 1976 or under section 30, 32(5)(b), 32A(6), (8)(b) or (9)(b) or 79(3) of this Act or paragraph 5 of Schedule 5 to this Act; and
- (c) tax has not (since the last occasion on which such an undertaking was given) become chargeable with respect to it under the said section 34 or under section 78 or 82(3) of the Finance Act 1976 or under section 32, 32A or 79(3) of this Act or paragraph 3 of Schedule 5 to this Act.
- (3) If it appears to the Treasury that provision is, or is to be, made by a settlement for the maintenance, repair or preservation of any such property as is mentioned in subsection (1)(b), (c), (d) or (e) of section 31 of this Act they may, on a claim made for the purpose—
- (a) designate that property under this sub-paragraph, and
- (b) accept with respect to it an undertaking such as is described in subsection (4), or (as the case may be) undertaking such as described in subsections (4) and (4A) of that section;
and, if they do so, sub-paragraph (2) above shall have effect as if the designation were under that section and the undertaking or undertakings under section 30 of this Act and as if the reference to tax becoming chargeable were a reference to the occurrence of an event on which tax would become chargeable under section 32 or 32A of this Act if there had been a conditionally exempt transfer of the property when the claim was made and the undertaking or undertakings had been given under section 30.
- (4) A charity is a qualifying charity for the purposes of sub-paragraph (1) above if it exists wholly or mainly for maintaining, repairing or preserving for the public benefit buildings of historic or architectural interest, land of scenic, historic or scientific interest or objects of national, scientific, historic or artistic interest; and in this sub-paragraph “*national interest*” includes interest within any part of the United Kingdom.
- (5) Designations, undertakings and acceptances made under section 84(6) of the Finance Act 1976 or section 94(3) of the Finance Act 1982 shall be treated as made under sub-paragraph (3) above.
- (5A) In the case of property which, if a direction is given under paragraph 1 above, will be property to which paragraph 15A below applies, sub-paragraph (1)(b) above shall have effect as if for the reference to the settlor there were substituted a reference to either the settlor or the person referred to in paragraph 15A(2).
##### 4
- (1) Paragraphs (a) and (b) of paragraph 3(1) above do not apply to property which—
- (a) was previously comprised in another settlement, and
- (b) ceased to be comprised in that settlement and became comprised in the current settlement in circumstances such that by virtue of paragraph 9(1) below there was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it;
and in relation to any such property paragraph 3(1)(c) above shall apply with the omission of the words “at any time after the end of that period”.
- (2) Sub-paragraph (1) above shall not have effect if the time when the property comprised in the previous settlement devolved otherwise than on any such body or charity as is mentioned in paragraph 3(1)(a) above fell before the expiration of the period of six years there mentioned; but in such a case paragraph 3(1) above shall apply to the current settlement as if for the references to that period of six years there were substituted references to the period beginning with the date on which the property became comprised in the current settlement and ending six years after the date on which it became held on the relevant trusts of the previous settlment (or, where this sub-paragraph has already had effect in relation to the property, the date on which it became held on the relevant trusts of the first settlement in the series).
### Withdrawal
##### 5
If in the Treasury’s opinion the facts concerning any property or its administration cease to warrant the continuance of the effect of a direction given under paragraph 1 above in respect of the property, they may at any time by notice in writing to the trustees withdraw the direction on such grounds, and from such date, as may be specified in the notice; and the direction shall cease to have effect accordingly.
### Information
##### 6
Where a direction under paragraph 1 above has effect in respect of property, the trustees shall from time to time furnish the Treasury with such accounts and other information relating to the property as the Treasury may reasonably require.
### Enforcement of trusts
##### 7
Where a direction under paragraph 1 above has effect in respect of property, the trusts on which the property is held shall be enforceable at the suit of the Treasury and the Treasury shall, as respects the appointment, removal and retirement of trustees, have the rights and powers of a beneficiary.
## PART II — PROPERTY LEAVING MAINTENANCE FUNDS
### Charge to tax
##### 8
- (1) This paragraph applies to settled property which is held on trusts which comply with the requirements mentioned in paragraph 3(1) above, and in respect of which a direction given under paragraph 1 above has effect.
- (2) Subject to paragraphs 9 and 10 below, there shall be a charge to tax under this paragraph—
- (a) where settled property ceases to be property to which this paragraph applies, otherwise than by virtue of an application of the kind mentioned in paragraph 3(1)(a)(i) or (ii) above or by devolving on any such body or charity as is mentioned in paragraph 3(1)(a)(ii);
- (b) in a case in which paragraph (a) above does not apply, where the trustees make a disposition (otherwise than by such an application) as a result of which the value of settled property to which this paragraph applies is less than it would be but for the disposition.
- (3) Subsections (4), (5) and (10) of section 70 of this Act shall apply for the purposes of this paragraph as they apply for the purposes of that section (with the substitution of a reference to sub-paragraph (2)(b) above for the reference in section 70(4) to section 70(2)(b)).
- (4) The rate at which tax is charged under this paragraph shall be determined in accordance with paragraphs 11 to 15 below.
- (5) The devolution of property on a body or charity shall not be free from charge by virtue of sub-paragraph (2)(a) above if, at or before the time of devolution, an interest under the settlement in which the property was comprised immediately before the devolution is or has been acquired for a consideration in money or money’s worth by that or another such body or charity; but for the purposes of this sub-paragraph any acqusition from another such body or charity shall be disregarded.
- (6) For the purposes of sub-paragraph (5) above a body or charity shall be treated as acquiring an interest for a consideration in money or money’s worth if it becomes entitled to the interest as a result of transactions which include a disposition for such consideration (whether to that body or charity or to another person) of that interest or of other property.
### Exceptions from charge
##### 9
- (1) Tax shall not be charged under paragraph 8 above in respect of property which, within the permitted period after the occasion on which tax would be chargeable under that paragraph, becomes comprised in another settlement as a result of a transfer of value which is exempt under section 27 of this Act.
- (2) In sub-paragraph (1) above “*the permitted period*” means the period of thirty days except in a case where the occasion referred to is the death of the settlor, and in such a case means the period of two years.
- (3) Sub-paragraph (1) above shall not apply to any property if the person who makes the transfer of value has acquired it for a consideration in money or money’s worth; and for the purposes of this sub-paragraph a person shall be treated as acquiring any property for such consideration if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.
- (4) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after it becomes comprised in the other settlement (less the amount of any consideration for its transfer received by the person who makes the transfer of value), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
- (5) The reference in sub-paragraph (4) above to the amount on which tax would be charged is a reference to the amount on which it would be charged apart from—
- (a) section 70(5)(b) of this Act (as applied by paragraph 8(3) above), and
- (b) Chapters I and II of Part V of this Act;
and the reference in that sub-paragraph to the amount on which tax is charged is a reference to the amount on which it would be charged apart from section 70(5)(b) and those Chapters.
##### 10
- (1) Tax shall not be charged under paragraph 8 above in respect of property which ceases to be property to which that paragraph applies on becoming—
- (a) property to which the settlor or his spouse is beneficially entitled, or
- (b) property to which the settlor’s widow or widower is beneficially entitled if the settlor has died in the two years preceding the time when it becomes such property.
- (2) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after it becomes property of a description specified in paragraph (a) or (b) of that sub-paragraph (less the amount of any consideration for its transfer received by the trustees), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
- (3) The reference in sub-paragraph (2) above to the amount on which tax would be charged is a reference to the amount on which it would be charged apart from—
- (a) section 70(5)(b) of this Act (as applied by paragraph 8(3) above), and
- (b) Chapters I and II of Part V of this Act;
and the reference in sub-paragraph (2) above to the amount on which tax is charged is a reference to the amount on which it would be charged apart from section 70(5)(b) and those Chapters.
- (4) Sub-paragraph (1) above shall not apply in relation to any property if, at or before the time when it becomes property of a description specified in paragraph (a) or (b) of that sub-paragraph, an interest under the settlement in which the property was comprised immediately before it ceased to be property to which paragraph 8 above applies is or has been acquired for a consideration in money or money’s worth by the person who becomes beneficially entitled.
- (5) For the purposes of sub-paragraph (4) above a person shall be treated as acquiring an interest for a consideration in money or money’s worth if he becomes entitled to the interest as a result of transactions which include a disposition for such consideration (whether to him or to another person) of that interest or of other property.
- (6) Sub-paragraph (1) above shall not apply in respect of property if it was relevant property before it became (or last became) property to which paragraph 8 above applies and, by virtue of paragraph 16(1) or 17(1) below, tax was not chargeable (or, but for paragraph 16(2) or 17(4), would not have been chargeable) under section 65 of this Act in respect of its ceasing to be relevant property before becoming (or last becoming) property to which paragraph 8 above applies.
- (7) Sub-paragraph (1) above shall not apply in respect of property if—
- (a) before it last became property to which paragraph 8 above applies it was comprised in another settlement in which it was property to which that paragraph applies, and
- (b) it ceased to be comprised in the other settlement and last became property to which that paragraph applies in circumstances such that by virtue of paragraph 9(1) above there was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it.
- (8) Sub-paragraph (1) above shall not apply unless the person who becomes beneficially entitled to the property is domiciled in the United Kingdom at the time when he becomes so entitled.
### Rates of charge
##### 11
- (1) This paragraph applies where tax is chargeable under paragraph 8 above and—
- (a) the property in respect of which the tax is chargeable was relevant property before it became (or last became) property to which that paragraph applies, and
- (b) by virtue of paragraph 16(1) or 17(1) below tax was not chargeable (or, but for paragraph 16(2) or 17(4), would not have been chargeable) under section 65 of this Act in respect of its ceasing to be relevant property on or before becoming (or last becoming) property to which paragraph 8 above applies.
- (2) Where this paragraph applies, the rate at which the tax is charged shall be the aggregate of the following percentages—
- (a) 0.25 per cent. for each of the first forty complete successive quarters in the relevant period,
- (b) 0.20 per cent. for each of the next forty,
- (c) 0.15 per cent. for each of the next forty,
- (d) 0.10 per cent. for each of the next forty, and
- (e) 0.05 per cent. for each of the next forty.
- (3) In sub-paragraph (2) above “*the relevant period*” means the period beginning with the latest of—
- (a) the date of the last ten-year anniversary of the settlement in which the property was comprised before it ceased (or last ceased) to be relevant property,
- (b) the day on which the property became (or last became) relevant property before it ceased (or last ceased) to be such property, and
- (c) 13th March 1975,
and ending with the day before the event giving rise to the charge.
- (4) Where the property in respect of which the tax is chargeable has at any time ceased to be and again become property to which paragraph 8 above applies in circumstances such that by virtue of paragraph 9(1) above there was no charge to tax in respect of it (or, but for paragraph 9(4), there would have been no charge), it shall for the purposes of this paragraph be treated as having been property to which paragraph 8 above applies throughout the period mentioned in paragraph 9(1).
##### 12
- (1) This paragraph applies where tax is chargeable under paragraph 8 above and paragraph 11 above does not apply.
- (2) Where this paragraph applies, the rate at which the tax is charged shall be the higher of—
- (a) the first rate (as determined in accordance with paragraph 13 below), and
- (b) the second rate (as determined in accordance with paragraph 14 below).
##### 13
- (1) The first rate is the aggregate of the following percentages—
- (a) 0.25 per cent. for each of the first forty complete successive quarters in the relevant period,
- (b) 0.20 per cent. for each of the next forty,
- (c) 0.15 per cent. for each of the next forty,
- (d) 0.10 per cent. for each of the next forty, and
- (e) 0.05 per cent. for each of the next forty.
- (2) In sub-paragraph (1) above “*the relevant period*” means the period beginning with the day on which the property in respect of which the tax is chargeable became (or first became) property to which paragraph 8 above applies, and ending with the day before the event giving rise to the charge.
- (3) For the purposes of sub-paragraph (2) above, any occasion on which property became property to which paragraph 8 above applies, and which occurred before an occasion of charge to tax under that paragraph in respect of the property, shall be disregarded.
- (4) The reference in sub-paragraph (3) above to an occasion of charge to tax under paragraph 8 does not include a reference to—
- (a) the occasion by reference to which the rate is being determined in accordance with this Schedule, or
- (b) an occasion which would not be an occasion of charge but for paragraph 9(4) above.
##### 14
- (1) If the settlor is alive, the second rate is the effective rate at which tax would be charged, on the amount on which it is chargeable, in accordance with the appropriate provision of section 7 of this Act if the amount were the value transferred by a chargeable transfer made by him on the occasion on which the tax becomes chargeable.
- (1A) The rate or rates of tax determined under sub-paragraph (1) above in respect of any occasion shall not be affected by the death of the settlor after that occasion.
- (2) If the settlor is dead, the second rate is (subject to sub-paragraph (3) below) the effective rate at which tax would have been charged, on the amount on which it is chargeable, in accordance with the appropriate provision of section 7 of this Act if the amount had been added to the value transferred on his death and had formed the highest part of it.
- (3) If the settlor died before 13th March 1975, the second rate is the effective rate at which tax would have been charged, on the amount on which it is chargeable (“the chargeable amount”), in accordance with the appropriate provision of section 7 of this Act if the settlor had died when the event occasioning the charge under paragraph 8 above occurred, the value transferred on his death had been equal to the amount on which estate duty was chargeable when he in fact died, and the chargeable amount had been added to that value and had formed the highest part of it.
- (4) Where, in the case of a settlement (“the current settlement”), tax is chargeable under paragraph 8 above in respect of property which—
- (a) was previously comprised in another settlement, and
- (b) ceased to be comprised in that settlement and became comprised in the current settlement in circumstances such that by virtue of paragraph 9(1) above was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it,
then, subject to sub-paragraph (5) below, references in sub-paragraphs (1) to (3) above to the settlor shall be construed as references to the person who was the settlor in relation to the settlement mentioned in paragraph (a) above (or, if the Board so determine, the person who was the settlor in relation to the current settlement).
- (5) Where, in the case of a settlement (“the current settlement”), tax is chargeable under paragraph 8 above in respect of property which—
- (a) was previously comprised at different times in other settlements (“the previous settlements”), and
- (b) ceased to be comprised in each of them, and became comprised in another of them or in the current settlement, in circumstances such that by virtue of paragraph 9(1) above there was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it,
references in sub-paragraphs (1) to (3) above to the settlor shall be construed as references to the person who was the settlor in relation to the previous settlement in which the property was first comprised (or, if the Board so determine, any person selected by them who was the settlor in relation to any of the other previous settlements or the current settlement).
- (6) Sub-paragraph (7) below shall apply if—
- (a) in the period of seven years preceding a charge under paragraph 8 above (the “current charge”), there has been another charge under that paragraph where tax was charged at the second rate, and
- (b) the person who is the settlor for the purposes of the current charge is the settlor for the purposes of the other charge (whether or not the settlements are the same and, if the settlor is dead, whether or not he has died since the other charge);
and in sub-paragraph (7) below the other charge is referred to as the “previous charge”.
- (7) Where this sub-paragraph applies, the amount on which tax was charged on the previous charge (or, if there have been more than one, the aggregate of the amounts on which tax was charged on each)—
- (a) shall, for the purposes of calculating the rate of the current charge under sub-paragraph (1) above, be taken to be the value transferred by a chargeable transfer made by the settlor immediately before the occasion of the current charge, and
- (b) shall, for the purposes of calculating the rate of the current charge under sub-paragraph (2) or (3) above, be taken to increase the value there mentioned by an amount equal to that amount (or aggregate).
- (8) References in sub-paragraphs (1) to (3) above to the effective rate are to the rate found by expressing the tax chargeable as a percentage of the amount on which it is charged.
- (9) For the purposes of sub-paragraph (1) above the appropriate provision of section 7 of this Act is subsection (2), and for the purposes of sub-paragraphs (2) and (3) above it is (if the settlement was made on death) subsection (1) and (if not) subsection (2).
##### 15
Where property is, by virtue of paragraph 1(3) above, treated as property in respect of which a direction has been given under paragraph 1, it shall for the purposes of paragraphs 11 to 14 above be treated as having become property to which paragraph 8 above applies when the transfer of value mentioned in paragraph 1(3) was made.
## PART III — PROPERTY BECOMING COMPRISED IN MAINTENANCE FUNDS
##### 16
- (1) Tax shall not be charged under section 65 of this Act in respect of property which ceases to be relevant property on becoming property in respect of which a direction under paragraph 1 above then has effect.
- (2) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after it becomes property in respect of which the direction has effect (less the amount of any consideration for its transfer received by the trustees of the settlement in which it was comprised immediately before it ceased to be relevant property), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
- (3) Sub-paragraph (1) above shall not apply in relation to any property if, at or before the time when it becomes property in respect of which the direction has effect, an interest under the settlement in which it was comprised immediately before it ceased to be relevant property is or has been acquired for a consideration in money or money’s worth by the trustees of the settlement in which it becomes comprised on ceasing to be relevant property.
- (4) For the purposes of sub-paragraph (3) above trustees shall be treated as acquiring an interest for a consideration in money or money’s worth if they become entitled to the interest as a result of transactions which include a disposition for such consideration (whether to them or to another person) of that interest or of other property.
##### 17
- (1) Tax shall not be charged under section 65 of this Act in respect of property which ceases to be relevant property if within the permitted period an individual makes a transfer of value—
- (a) which is exempt under section 27 of this Act, and
- (b) the value transferred by which is attributable to that property.
- (2) In sub-paragraph (1) above “*the permitted period*” means the period of thirty days beginning with the day on which the property ceases to be relevant property except in a case where it does so on the death of any person, and in such a case means the period of two years beginning with that day.
- (3) Sub-paragraph (1) above shall not apply if the individual has acquired the property concerned for a consideration in money or money’s worth; and for the purposes of this sub-paragraph an individual shall be treated as acquiring any property for such consideration if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.
- (4) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after the transfer there referred to (less the amount of any consideration for its transfer received by the individual), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
##### 18
In paragraphs 16(2) and 17(4) above the references to the amount on which tax would be charged are references to the amount on which it would be charged apart from—
- (a) paragraph (b) of section 65(2) of this Act, and
- (b) Chapters I and II of Part V of this Act;
and the references to the amount on which tax is charged are references to the amount on which it would be charged apart from that paragraph and those Chapters.
## SCHEDULE 5
### Charge on failure of condition of exemption—objects
##### 1
- (1) Where, under section 31 of the Finance Act 1975, the value of an object has been left out of account and the Treasury are satisfied that at any time the undertaking given under that section or under paragraph 5 below with respect to the object has not been observed in a material respect, tax shall be chargeable with respect to the object in accordance with paragraph 2 below.
- (2) Where, under section 31 of the Finance Act 1975, the value of any object has been left out of account and—
- (a) sub-paragraph (1) above does not apply, but
- (b) the object is disposed of, whether on sale or otherwise,
then, subject to the following provisions of this paragraph, tax shall be chargeable with respect to the object in accordance with paragraph 2 below; but where the value of an object has been so left out of account on the death of more than one person, the tax chargeable under this sub-paragraph shall be chargeable only by reference to the last death.
- (3) Tax shall not be chargeable by virtue of sub-paragraph (2) above with respect to an object—
- (a) on its being sold by private treaty to a body mentioned in Schedule 3 to this Act or on its being disposed of to such a body otherwise than by sale, or
- (b) if it is disposed of otherwise than by sale and the undertaking previously given with respect to it is replaced by a further undertaking under paragraph 5 below.
- (4) For the purposes of sub-paragraph (2) above, the acceptance of an object under section 230 of this Act shall not be treated as a disposal of the object.
##### 2
- (1) The following provisions of this paragraph shall have effect where, under section 31 of the Finance Act 1975, the value of any object has been left out of account in determining the value transferred by the transfer of value made on the death of any person (in this paragraph referred to as the value transferred on death) and tax becomes chargeable with respect to the object under paragraph 1 above by reason of the disposal of the object or the non-observance of an undertaking (in this paragraph referred to as a chargeable event).
- (2) The tax chargeable under paragraph 1 above with respect to an object shall be so much of the tax that would have been chargeable on the value transferred on death as would have been attributable to the value of the object if—
- (a) section 31 of the Finance Act 1975 had not applied to the object, and
- (b) the value of the object at the time of the death had been equal to its value at the time of the chargeable event and, if the chargeable event was a disposal on sale complying with paragraph 6 below, that value had been equal to the proceeds of sale.
- (3) Where—
- (a) under section 31 of the Finance Act 1975 the value of two or more objects has been left out of account in determining the value transferred on death, and
- (b) those objects formed a set at the time of death, and
- (c) tax becomes chargeable under paragraph 1 above with respect to two or more of the objects by reason of chargeable events occurring at different times,
the preceding provisions of this paragraph shall apply as if both or all the chargeable events had occurred at the time of the earlier or earliest one, and the tax chargeable with respect to the objects shall be adjusted accordingly on the occurrence of each of the subsequent chargeable events.
- (4) Sub-paragraph (3) above shall not apply with respect to two or more chargeable events which are disposals to different persons who are neither acting in concert nor connected with each other.
### Charge on failure of condition of exemption—buildings etc.
##### 3
- (1) Where, under subsection (2) of section 34 of the Finance Act 1975, the value of any property has been left out of account and the Treasury are satisfied that at any time the undertaking given under that subsection or under paragraph 5 below in respect of that property has not been observed in a material respect, then, subject to sub-paragraph (3) below, tax shall be chargeable in accordance with paragraph 4 below with respect to the property and any property associated with it.
- (2) Where, under section 34(2) of the Finance Act 1975, the value of any property has been left out of account in determining the value transferred on the death of any person and—
- (a) sub-paragraph (1) above does not apply, but
- (b) the property is disposed of, whether on sale or otherwise,
then, subject to sub-paragraphs (3) and (4) below, tax shall be chargeable in accordance with paragraph 4 below with respect to the property and any property associated with it; but where the value of the property has been left out of account on the death of more than one person, the tax chargeable under this sub-paragraph shall be chargeable only by reference to the last death.
- (3) The Treasury may direct that the tax chargeable under this paragraph on a failure to observe an undertaking with respect to any property or on the disposal of any property shall be chargeable with respect only to that property, if it appears to them that the entity consisting of the building, land and objects concerned has not been materially affected.
- (4) Tax shall not be chargeable under sub-paragraph (2) above with respect to any property—
- (a) on its being sold by private treaty to a body mentioned in Schedule 3 to this Act or on its being disposed of to such a body otherwise than by sale, or
- (b) if it is disposed of otherwise than by sale and the undertaking previously given with respect to it is replaced by a further undertaking under paragraph 5 below;
and for the purposes of sub-paragraph (2) above the acceptance of any property under section 230 of this Act shall not be treated as a disposal of the property.
- (5) For the purposes of this paragraph, two or more properties are associated with each other if one of them is a building falling within subsection (1)(b) of section 34 of the Finance Act 1975 and the other or others such land or objects as, in relation to that building, fall within subsection (1)(c) or (d) of that section.
##### 4
The tax chargeable under paragraph 3 above with respect to any property shall be so much of the tax that would have been chargeable on the value transferred on the death as would have been attributable to the value of the property if—
- (a) section 34 of the Finance Act 1975 had not applied to the property; and
- (b) the value of the property at the time of the death had been equal to its value at the time the tax becomes chargeable and, if it becomes chargeable on a sale complying with paragraph 6 below, that value had been equal to the proceeds of sale.
### Further undertaking on disposal
##### 5
- (1) The further undertaking referred to in paragraph 1 above is an undertaking given, by such person as the Treasury think appropriate in the circumstances of the case, that, until the person entitled to the object dies or the object is disposed of, whether by sale or gift or otherwise,—
- (a) the object will be kept permanently in the United Kingdom and will not leave it temporarily except for a purpose and a period approved by the Treasury; and
- (b) reasonable steps will be taken for the preservation of the object; and
- (c) reasonable facilities for examining the object for the purpose of seeing the steps taken for its preservation or, subject to sub-paragraph (3) below, for purposes of research, will be allowed to any person authorised by the Treasury to examine it.
- (2) The further undertaking referred to in paragraph 3 above is an undertaking given by such person as the Treasury think appropriate in the circumstances of the case that, until the person entitled to the property dies or the property is disposed of, whether by sale or gift or otherwise, reasonable steps will be taken—
- (a) in the case of land falling within subsection (1)(a) of section 34 of the Finance Act 1975, for the maintenance of the land and the preservation of its character, and
- (b) in the case of any other property, for the maintenance, repair and preservation of the property and, if it is an object falling within subsection (1)(d) of that section, for keeping it associated with the building concerned,
and for securing reasonable access to the public.
- (3) If it appears to the Treasury, on a claim made for the purpose, that any documents which are designated as objects to which section 31 of the Finance Act 1975 applies contain information which for personal or other reasons ought to be treated as confidential, they may exclude those documents, either entirely or to such extent as they think fit, from so much of an undertaking given or to be given under sub-paragraph (1)(c) above as relates to their examination for purposes of research.
### Requirements of sale
##### 6
A sale complies with this paragraph if—
- (a) it was not intended to confer any gratuitous benefit on any person, and
- (b) it was either a transaction at arm’s length between persons not connected with each other or a transaction such as might be expected to be made at arm’s length between persons not connected with each other.
## SCHEDULE 6
### General
##### 1
References in any enactment, in any instrument made under any enactment, or in any document (whether executed before or after the passing of this Act) to estate duty or to death duties shall have effect, as far as may be, as if they included references to capital transfer tax chargeable under section 4 of this Act (or under section 22 of the Finance Act 1975).
### Surviving spouse or former spouse
##### 2
In determining for the purposes of this Act the value of the estate, immediately before his death, of a person whose spouse (or former spouse) died before 13th November 1974, there shall be left out of account the value of any property which, if estate duty were chargeable on the later death, would be excluded from the charge by section 5(2) of the Finance Act 1894 (relief on death of surviving spouse); and tax shall not be chargeable under section 52 of this Act on the coming to an end of an interest in possession in settled property if—
- (a) the spouse (or former spouse) of the person beneficially entitled to the interest died before 13th November 1974, and
- (b) the value of the property in which the interest subsists would by virtue of the preceding provisions of this paragraph have been left out of account in determining the value of the survivor’s estate had he died immediately before the interest came to an end.
### Sales and mortgages of reversionary interests
##### 3
- (1) Where a reversionary interest in settled property was before 27th March 1974 sold or mortgaged for full consideration in money or money’s worth, no greater amount of tax shall be payable by the purchaser or mortgagee when the interest falls into possession than the amounts of estate duty that would have been payable by him if none of the provisions of the Finance Act 1975 or this Act had been passed; and any tax which, by virtue of this paragraph, is not payable by the mortgagee but which is payable by the mortgagor shall rank as a charge subsequent to that of the mortgagee.
- (2) Where the interest referred to in sub-paragraph (1) above was sold or mortgaged to a close company in relation to which the person entitled to the interest was a participator, sub-paragraph (1) above shall apply only to the extent that other persons had rights and interests in the company; and this sub-paragraph shall be construed as if contained in Part IV of this Act.
### Objects of national etc. interest left out of account on death
##### 4
- (1) In its application to a sale which does not comply with paragraph 6 of Schedule 5 to this Act, subsection (2) of section 40 of the Finance Act 1930 shall have effect as if the reference to the proceeds of sale were a reference to the value of the objects on that date.
- (2) Where there has been a death in relation to which the value of any property has been left out of account under section 40 of the Finance Act 1930 and, before any estate duty has become chargeable under the provisions of that section or of section 48 of the Finance Act 1950, there is a conditionally exempt transfer of that property, then, on the occurrence of a chargeable event in respect of that property—
- (a) if there has been no conditionally exempt transfer of the property on death, either—
- (i) tax shall be chargeable under section 32 or 32A of this Act (as the case may be), or
- (ii) estate duty shall be chargeable under those provisions, as the Board may elect, and
- (b) if there has been such a conditionally exempt transfer, there shall be a charge under section 32 or 32A of this Act (as the case may be) and not under those provisions;
- and in this sub-paragraph “*conditionally exempt transfer*” includes a conditionally exempt occasion within the meaning of section 78(2) of this Act.
- (3) In sections 33(7) and 8 and 79(1) of this Act, references to a conditionally exempt transfer of any property include references to a death in relation to which the value of any property has been left out of account under section 40 of the Finance Act 1930 and, in relation to such property, references to a chargeable event or to the tax chargeable in accordance with section 33 of this Act by reference to a chargeable event include references to an event on the occurrence of which estate duty becomes chargeable under section 40 of the Finance Act 1930 or section 48 of the Finance Act 1950 or to the estate duty so chargeable.
- (4) In determining for the purposes of section 40(2) of the Finance Act 1930 what is the last death on which the objects passed, there shall be disregarded any death after 6th April 1976.
- (5) In the application of this paragraph to Northern Ireland for references to section 40 of the Finance Act 1930 and section 48 of the Finance Act 1950 there shall be substituted references to section 2 of the Finance Act (Northern Ireland) 1931 and Article 6 of the Finance (Northern Ireland) Order 1972 respectively.
## SCHEDULE 7
##### 1
In this Schedule “*the repealed enactments*” means the enactments repealed by this Act.
##### 2
Sections 126 to 130 of this Act shall have effect (to the exclusion of the corresponding repealed enactments) in relation to any disposal after the end of 1984, whether the death in respect of which relief was given occurred before or after that time.
##### 3
Where section 146 of this Act has effect in relation to a death after the end of 1984, it shall also have effect (to the exclusion of section 122 of the Finance Act 1976) in relation to any chargeable transfer of the kind referred to in section 146(2), whether made before or after that time.
##### 4
Section 147 of this Act, so far as it relates to charges to tax in respect of claims to legitim made in the circumstances described in subsection (4) of that section, shall have effect (to the exclusion of the corresponding repealed enactments) in relation to claims made after the end of 1984, whether the testator died before or after that time.
##### 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6
Section 150 of this Act shall have effect (to the exclusion of section 88 of the Finance Act 1976) in relation to any claim made after the end of 1984.
##### 7
Section 203 of this Act shall have effect (to the exclusion of the corresponding repealed enactments) in relation to any chargeable transfer made after the end of 1984 (whether the spouse transfer concerned was made before or after that time).
##### 8
Section 218 of this Act, and section 245 so far as it relates to section 218, shall have effect in relation to settlements made after the end of 1984 to the exclusion of the corresponding repealed enactments, and those enactments shall continue to have effect in relation to settlements made before that time.
##### 9
Section 219 of this Act, and section 245 so far as it relates to section 219, shall come into force on 1st January 1985 for all purposes to the exclusion of the corresponding repealed enactments, except that those enactments shall continue to have effect in relation to notices given before that time.
##### 10
Section 220 of this Act shall come into force on 1st January 1985 for all purposes to the exclusion of the corresponding repealed enactments, except that those enactments shall continue to have effect in relation to authorisations given before that time.
##### 11
Any order made under section 233 of this Act shall have effect in relation to interest chargeable (under the repealed enactments) in respect of chargeable transfers and other events before the end of 1984 as it has effect in relation to interest chargeable (under this Act) in respect of transfers and other events after that time.
##### 12
Where payments are made or assets transferred after the end of 1984 in the circumstances described in section 262 of this Act, that section shall have effect (to the exclusion of the corresponding repealed enactments) whether the disposition first mentioned in that section was made before or after that time.
##### 13
Section 264 of this Act shall have effect (to the exclusion of section 114 of the Finance Act 1976) in any case where the later transfer is made after the end of 1984, whether the earlier transfer was made before or after that date.
##### 14
This Act shall not have effect in a case which would otherwise fall within paragraph 2(3) of Schedule 5 if the first chargeable event occurred before the end of 1984.
## SCHEDULE 8
### The Land Registration Act 1925
##### 1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The Crown Proceedings Act 1947
##### 2
In section 14(1)(b) of the Crown Proceedings Act 1947, for the words from “payment” to the end there shall be substituted the words “payment of capital transfer tax under the Capital Transfer Tax Act 1984”.
### The Land Charges Act 1972
##### 3
- (1) In section 2 of the Land Charges Act 1972—
- (a) in subsection (4)(ii) for the words “Part III of the Finance Act 1975” there shall be substituted the words “the Capital Transfer Tax Act 1984”; and
- (b) in subsection (5)(i) for the words “Part III of the Finance Act 1975 (capital transfer tax)” there shall be substituted the words “the Capital Transfer Tax Act 1984”.
- (2) In section 4(6) of that Act for the words “Part III of the Finance Act 1975” there shall be substituted the words “the Capital Transfer Tax Act 1984”.
### The Finance Act 1975
##### 4
In section 49(4) of the Finance Act 1975 after the words “paragraph 1 of Schedule 6 to this Act” there shall be inserted the words “or section 18 of the Capital Transfer Tax Act 1984”.
### The Development Land Tax Act 1976
##### 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6
- (1) Section 34 of the Development Land Tax Act 1976 shall be amended as follows.
- (2) In subsection (3)(d)(ii) for the words " Chapter II of Part IV of the Finance Act 1982 " there shall be substituted the words " any provision, apart from section 79, of Chapter III of Part III of the Capital Transfer Tax Act 1984 ".
- (3) In subsection (5)(a) after the words "Act 1976 " there shall be inserted the words " or section 31 of the Capital Transfer Tax Act 1984 " and for the words "section 76 of that Act" there shall be substituted the words " section 30(2) of the Capital Transfer Tax Act 1984 ".
- (4) In subsection (6) for the words " Subsections (2) and (2A) of section 51 of the Finance Act 1975 " there shall be substituted the words " Sections 2(3) and 3(4) of the Capital Transfer Tax Act 1984 " and for the words "Part III of the Finance Act 1975 " there shall be substituted the words " the Capital Transfer Tax Act 1984 ".
##### 7
- (1) Schedule 6 to the Development Land Tax Act 1976 shall be amended as follows.
- (2) In paragraph 18(2)—
- (a) after the words " section 22 of the Finance Act 1927 " there shall be inserted the words " or section 4 of the Capital Transfer Tax Act 1984 " , for the words "that Act" there shall be substituted the words " the Finance Act 1975 " and after the words " section 77 of the Finance Act 1976 " there shall be inserted the words " or under section 31 of the Capital Transfer Tax Act 1984 "; and
- (b) in paragraph (a) for the words from " subsection (7) " to " Act 1976 " there shall be substituted the words " section 32 of, or paragraph 3 of Schedule 5 to, the Capital Transfer Tax Act 1984 ".
- (3) In paragraph 19(4) for the words " paragraph 1(2) of Schedule 10 to the Finance Act 1975 " there shall be substituted the words " section 5(4) of the Capital Transfer Tax Act 1984 ".
- (4) In paragraph 24(1)—
- (a) in paragraph (b) for the words " subsection (3) of section 37 of the Finance Act 1975 " there shall be substituted the words " Schedule 1 to the Capital Transfer Tax Act 1984 " ; and
- (b) in paragraph (c) for the words " the said subsection (3) " there shall be substituted the words " the said Schedule 1 ".
### The Finance Act 197
##### 8
In section 38 of the Finance Act 1977—
- (a) in subsection (1) for the words “a direction has effect under section 93 of the Finance Act 1982” there shall be substituted the words “a direction has effect under paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”; and
- (b) in subsection (5)(a) for the words “the said section 93” there shall be substituted the words “the said paragraph 1”.
### The Capital Gains Tax Act 1979
##### 9
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 10
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 11
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 12
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The National Heritage Act J 980
##### 13
In section 8(1) of the National Heritage Act 1980 after the words “Finance Act 1975” there shall be inserted the words “or section 230 of the Capital Transfer Tax Act 1984”.
##### 14
In section 12(3) of the National Heritage Act 1980 for the words “the said paragraph 17(4)” there shall be substituted the words “section 230(4) of the Capital Transfer Tax Act 1984”.
##### 15
In section 13(3) of the National Heritage Act 1980 after the words “this section” there shall be inserted the words “or section 230(1) or 231(2) of the Capital Transfer Tax Act 1984”.
##### 16
In section 14(1) of the National Heritage Act 1980, for the words “or of the provisions amended by section 12 above” there shall be substituted the words “or under section 230 of the Capital Transfer Tax Act 1984”.
### The Finance Act 1980
##### 17
- (1) Section 52 of the Finance Act 1980 shall be amended as follows.
- (2) In subsection (1)—
- (a) for the words “a direction has effect under section 93 of the Finance Act 1982” there shall be substituted the words “a direction has effect under paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”;
- (b) in paragraph (a) for the words “subsection (3) of that section” there shall be substituted the words “sub-paragraph (1) of paragraph 3 of that Schedule”; and
- (c) in paragraph (b) for the words “that subsection” there shall be substituted the words “that sub-paragraph”.
- (3) In subsections (2) and (3) for the words “subsection (3)(a)(i) or (ii) of the said section 93” there shall be substituted the words “sub-paragraph (1)(a)(i) or (ii) of the said paragraph 3”.
- (4) In subsection (7)—
- (a) in paragraph (a) for the words from “paragraph 3(1)” to “paragraph 3(4)” there shall be substituted the words “paragraph 9(1) of Schedule 4 to the Capital Transfer Tax Act 1984 there is (or, but for paragraph 9(4)”; and
- (b) in paragraph (b) for the words “section 93 of that Act” there shall be substituted the words “paragraph 1 of that Schedule”.
##### 18
- (1) Section 53 of the Finance Act 1980 shall be amended as follows.
- (2) In subsection (1)—
- (a) for the words “subsection (3) of section 93 of the Finance Act 1982” there shall be substituted the words “sub-paragraph (1) of paragraph 3 of Schedule 4 to the Capital Transfer Tax Act 1984”; and
- (b) in paragraph (a) for the words “the said section 93” there shall be substituted the words “paragraph 1 of the said Schedule 4”.
- (3) In subsection (4)—
- (a) in paragraph (a) for the words from “paragraph 3(1)” to “paragraph 3(4)” there shall be substituted the words “paragraph 9(1) of Schedule 4 to the Capital Transfer Tax Act 1984 there is (or, but for paragraph 9(4)”; and
- (c) in paragraph (b) for the words “section 93 of that Act” there shall be substituted the words “paragraph 1 of that Schedule”.
##### 19
In section 98 of the Finance Act 1980 for the words between “by virtue of” and “but” there shall be substituted the words “paragraph 9(1) or 17(1) of Schedule 4 to the Capital Transfer Tax Act 1984 there is no charge to capital transfer tax in respect of the property ceasing to be comprised in the settlement or a reduced charge to that tax by virtue of paragraph 9(4) or 17(4) of that Schedule”.
### The Supreme Court Act 1981
##### 20
In section 109 of the Supreme Court Act 1981—
- (a) in subsections (1) and (2) for the words “Part III of the Finance Act 1975” there shall be substituted the words “the Capital Transfer Tax Act 1984”; and
- (b) in subsection (3) for the words “section 94(1)(a) of the Finance Act 1980” there shall be substituted the words “section 256(1)(a) of the Capital Transfer Act 1984”.
### The Finance Act 1982
##### 21
In section 61(1) of the Finance Act 1982—
- (a) for the words “section 93 below” there shall be substituted the words “paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”; and
- (b) in paragraph (a) for the words “subsection (3)(a)(i) of section 93” there shall be substituted the words “paragraph 3(1)(a)(i) of that Schedule”.
##### 22
In section 62 of the Finance Act 1982 for the words “section 93 below” there shall be substituted the words “paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”.
### The Finance (No. 2) Act 1983
##### 23
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### The Value Added Tax Act 1983
##### 24
In Group 11 of Schedule 6 to the Value Added Tax Act 1983—
- (a) in item 2, for the words from “section 32(3)(a)” onwards there shall be substituted the words “paragraph 1(3)(a) or (4), paragraph 3(4)(a), or the words following paragraph 3(4), of Schedule 5 to the Capital Transfer Tax Act 1984”; and
- (b) in item 3, for the words “section 78(4) of the Finance Act 1976” there shall be substituted the words “section 32(4) of the Capital Transfer Tax Act 1984”.
### The Land Registration Act (Northern Ireland) 1970
##### 25
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## SCHEDULE 9
#### Charge on transfers.
##### 3A
- (1) Any reference in this Act to a potentially exempt transfer is a reference to a transfer of value—
- (a) which is made by an individual on or after 18th March 1986; and
- (b) which, apart from this section, would be a chargeable transfer (or to the extent to which, apart from this section, it would be such a transfer); and
- (c) to the extent that it constitutes either a gift to another individual or a gift into an accumulation and maintenance trust or a disabled trust;
but this subsection has effect subject to any provision of this Act which provides that a disposition (or transfer of value) of a particular description is not a potentially exempt transfer.
- (2) Subject to subsection (6) below, a transfer of value falls within subsection (1)(c) above, as a gift to another individual,—
- (a) to the extent that the value transferred is attributable to property which, by virtue of the transfer, becomes comprised in the estate of that other individual, . . . , or
- (b) so far as that value is not attributable to property which becomes comprised in the estate of another person, to the extent that, by virtue of the transfer, the estate of that other individual is increased, . . .
- (3) Subject to subsection (6) below, a transfer of value falls within subsection (1)(c) above, as a gift into an accumulation and maintenance trust or a disabled trust, to the extent that the value transferred is attributable to property which, by virtue of the transfer, becomes settled property to which section 71 or 89 of this Act applies.
- (4) A potentially exempt transfer which is made seven years or more before the death of the transferor is an exempt transfer and any other potentially exempt transfer is a chargeable transfer.
- (5) During the period beginning on the date of a potentially exempt transfer and ending immediately before—
- (a) the seventh anniversary of that date, or
- (b) if it is earlier, the death of the transferor,
it shall be assumed for the purposes of this Act that the transfer will prove to be an exempt transfer.
- (6) Where, under any provision of this Act other than section 52 tax is in any circumstances to be charged as if a transfer of value had been made, that transfer shall be taken to be a transfer which is not a potentially exempt transfer.
- (7) In the application of this section to an event on the happening of which tax is chargeable under section 52 below, the reference in subsection (1)(a) above to the individual by whom the transfer of value is made is a reference to the person who, by virtue of section 3(4) above, is treated as the transferor.
##### 8A
- (1) This section applies where—
- (a) immediately before the death of a person (a “deceased person”), the deceased person had a spouse or civil partner (“the survivor”), and
- (b) the deceased person had unused nil-rate band on death.
- (2) A person has unused nil-rate band on death if—
$$M>VT$where—M is the maximum amount that could be transferred by a chargeable transfer made (under section 4 above) on the person's death if it were to be wholly chargeable to tax at the rate of nil per cent. (assuming, if necessary, that the value of the person's estate were sufficient but otherwise having regard to the circumstances of the person); andVT is the value actually transferred by the chargeable transfer so made (or nil if no chargeable transfer is so made).$
- (3) Where a claim is made under this section, the nil-rate band maximum at the time of the survivor's death is to be treated for the purposes of the charge to tax on the death of the survivor as increased by the percentage specified in subsection (4) below (but subject to subsection (5) and section 8C below).
- (4) That percentage is—
$$ENRBMD×100$where—E is the amount by which M is greater than VT in the case of the deceased person; andNRBMD is the nil-rate band maximum at the time of the deceased person's death.$
- (5) If (apart from this subsection) the amount of the increase in the nil-rate band maximum at the time of the survivor's death effected by this section would exceed the amount of that nil-rate band maximum, the amount of the increase is limited to the amount of that nil-rate band maximum.
- (6) Subsection (5) above may apply either—
- (a) because the percentage mentioned in subsection (4) above (as reduced under section 8C below where that section applies) is more than 100 because of the amount by which M is greater than VT in the case of one deceased person, or
- (b) because this section applies in relation to the survivor by reference to the death of more than one person who had unused nil-rate band on death.
- (7) In this Act “*nil-rate band maximum*” means the amount shown in the second column in the first row of the Table in Schedule 1 to this Act (upper limit of portion of value charged at rate of nil per cent.) and in the first column in the second row of that Table (lower limit of portion charged at next rate).
##### 8B
- (1) A claim under section 8A above may be made—
- (a) by the personal representatives of the survivor within the permitted period, or
- (b) (if no claim is so made) by any other person liable to the tax chargeable on the survivor's death within such later period as an officer of Revenue and Customs may in the particular case allow.
- (2) If no claim under section 8A above has been made in relation to a person (P) by reference to whose death that section applies in relation to the survivor, the claim under that section in relation to the survivor may include a claim under that section in relation to P if that does not affect the tax chargeable on the value transferred by the chargeable transfer of value made on P's death.
- (3) In subsection (1)(a) above “*the permitted period*” means—
- (a) the period of two years from the end of the month in which the survivor dies or (if it ends later) the period of three months beginning with the date on which the personal representatives first act as such, or
- (b) such longer period as an officer of Revenue and Customs may in the particular case allow.
- (4) A claim made within either of the periods mentioned in subsection (3)(a) above may be withdrawn no later than one month after the end of the period concerned.
##### 8C
- (1) This section applies where—
- (a) the conditions in subsection (1)(a) and (b) of section 8A above are met, and
- (b) after the death of the deceased person, tax is charged on an amount under any of sections 32, 32A and 126 below by reference to the rate or rates that would have been applicable to the amount if it were included in the value transferred by the chargeable transfer made (under section 4 above) on the deceased person's death.
- (2) If the tax is charged before the death of the survivor, the percentage referred to in subsection (3) of section 8A above is (instead of that specified in subsection (4) of that section)—
$$(ENRBMD-TANRBME)×100$where—E and NRBMD have the same meaning as in subsection (4) of that section;TA is the amount on which tax is charged; andNRBME is the nil-rate band maximum at the time of the event occasioning the charge.$
- (3) If this section has applied by reason of a previous event or events, the reference in subsection (2) to the fraction
$TANRBME$
is to the aggregate of that fraction in respect of the current event and the previous event (or each of the previous events).
- (4) If the tax is charged after the death of the survivor, it is charged as if the personal nil-rate band maximum of the deceased person were appropriately reduced.
- (5) In subsection (4) above—
- “*the personal nil-rate band maximum of the deceased person*” is the nil rate band maximum which is treated by Schedule 2 to this Act as applying in relation to the deceased person's death, increased in accordance with section 8A above where that section effected an increase in that nil-rate band maximum in the case of the deceased person (as survivor of another deceased person), and
- “*appropriately reduced*” means reduced by the amount (if any) by which the amount on which tax was charged at the rate of nil per cent. on the death of the survivor was increased by reason of the operation of section 8A above by virtue of the position of the deceased person.
##### 24A
- (1) A transfer of value is exempt to the extent that the value transferred by it is attributable to land in the United Kingdom given to a body falling within subsection (2) below.
- (2) A body falls within this subsection if it is—
- (a) a registered social landlord within the meaning of Part I of the Housing Act 1996;
- (b) a registered housing association within the meaning of the Housing Associations Act 1985; or
- (c) a registered housing association within the meaning of Part II of the Housing (Northern Ireland) Order 1992..
- (3) Subsections (2) to (5) of section 23 and subsection (4) of section 24 above shall apply in relation to subsection (1) above as they apply in relation to section 24(1).
##### 26A
A potentially exempt transfer which would (apart from this section) have proved to be a chargeable transfer shall be an exempt transfer to the extent that the value transferred by it is attributable to property which has been or could be designated under section 31(1) below and which, during the period beginning with the date of the transfer and ending with the death of the transferor,—
- (a) has been disposed of by sale by private treaty to a body mentioned in Schedule 3 to this Act or has been disposed of to such a body otherwise than by sale, or
- (b) has been disposed of in pursuance of section 230 below.
##### 29A
- (1) This section applies where—
- (a) apart from this section the transfer of value made on the death of any person is an exempt transfer to the extent that the value transferred by it is attributable to an exempt gift, and
- (b) the exempt beneficiary, in settlement of the whole or part of any claim against the deceased’s estate, effects a disposition of property not derived from the transfer.
- (2) The provisions of this Act shall have effect in relation to the transfer as if—
- (a) so much of the relevant value as is equal to the following amount, namely the amount by which the value of the exempt beneficiary’s estate immediately after the disposition is less than it would be but for the disposition, or
- (b) where that amount exceeds the relevant value, the whole of the relevant value,
were attributable to such a gift to the exempt beneficiary as is mentioned in subsection (3) below (instead of being attributable to a gift with respect to which the transfer is exempt).
- (3) The gift referred to in subsection (2) above is a specific gift with respect to which the transfer is chargeable, being a gift which satisfies the conditions set out in paragraphs (a) and (b) of section 38(1) below.
- (4) In determining the value of the exempt beneficiary’s estate for the purposes of subsection (2) above—
- (a) no deduction shall be made in respect of the claim referred to in subsection (1)(b) above, and
- (b) where the disposition referred to in that provision constitutes a transfer of value—
- (i) no account shall be taken of any liability of the beneficiary for any tax on the value transferred, and
- (ii) sections 104 and 116 below shall be disregarded.
- (5) Subsection (1)(b) above does not apply in relation to any claim against the deceased’s estate in respect of so much of any liability as is, in accordance with this Act, to be taken into account in determining the value of the estate.
- (6) In this section—
- “*exempt gift*”, in relation to a transfer of value falling within subsection (1)(a) above, means—a gift with respect to which the transfer is (apart from this section) exempt by virtue of the provisions of any sections 18 and 23 to 28 above, orwhere (apart from this section) the transfer is so exempt with respect to a gift up to a limit, so much of the gift as is within that limit;
- “*the exempt beneficiary*”, in relation to an exempt gift, means any of the following, namely—where the gift is exempt by virtue of section 18 above, the deceased’s spouse,where the gift is exempt by virtue of section 23 above, any person or body—whose property the property falling within subsection (1) of that section becomes, orby whom that property is held on trust for charitable purposes,where the gift is exempt by virtue of section 24, or 25 above, any body whose property the property falling within subsection (1) of that section becomes,where the gift is exempt by virtue of section 24A above, any body to whom the land falling within subsection (1) of that section is given, andwhere the gift is exempt by virtue of section 27 or 28 above, the trustees of any settlement in which the property falling within subsection (1) of that section becomes comprised;
- “*gift*” and “*specific gift*” have the same meaning as in Chapter III of this Part; and
- “*the relevant value*”, in relation to a transfer of value falling within subsection (1)(a) above, means so much of the value transferred by the transfer as is attributable to the gift referred to in that provision.
##### 32A
- (1) For the purposes of this section the following properties are associated with each other, namely, a building falling within section 31(1)(c) above and (to the extent that any of the following exists) an area or areas of land falling within section 31(1)(d) above in relation to the building and an object or objects falling within section 31(1)(e) above in relation to the building; and this section applies where there are such properties, which are referred to as associated properties.
- (2) Where there has been a conditionally exempt transfer of any property (or part), tax shall be charged under this section in respect of that property (or part) on the first occurrence after the transfer (or, if the transfer was a potentially exempt transfer, after the death of the transferor of an event which under this section is a chargeable event with respect to that property (or part).
- (3) If the Treasury are satisfied that at any time an undertaking given under section 30 above or this section for the maintenance, repair, preservation, access or keeping of any of the associated properties has not been observed in a material respect, then (subject to subsection (10) below) the failure to observe the undertaking is a chargeable event with respect to the whole of each of the associated properties of which there has been a conditionally exempt transfer.
- (4) If—
- (a) the person beneficially entitled to property dies, or
- (b) property (or part of it) is disposed of, whether by sale or gift or otherwise,
then, if the property is one of the associated properties and an undertaking for its maintenance, repair, preservation, access or keeping has been given under section 30 above or this section, the death or disposal is (subject to subsections (5) to (10) below) a chargeable event with respect to the whole of each of the associated properties of which there has been a conditionally exempt transfer.
- (5) Subject to subsection (6) below, the death of a person beneficially entitled to property, or the disposal of property (or part), is not a chargeable event if the personal representatives of the deceased (or, in the case of settled property, the trustees or the person next entitled) within three years of the death make or, as the case may be, the disposal is—
- (a) a disposal of the property (or part) concerned by sale by private treaty to a body mentioned in Schedule 3 to this Act, or to such a body otherwise than by sale, or
- (b) a disposal of the property (or part) concerned in pursuance of section 230 below.
- (6) Where a disposal mentioned in subsection (5)(a) or (b) above is a part disposal, that subsection does not make the event non-chargeable with respect to property other than that disposed of unless—
- (a) the requisite undertaking described in section 31 above is given with respect to the property (or part) not disposed of by such person as the Board think appropriate in the circumstances of the case, or
- (b) (where any of the property or part not disposed of is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to that property (or that part) by such person or persons as the Board think appropriate in the circumstances of the case;
and in this subsection “*part disposal*” means a disposal of property which does not consist of or include the whole of each property which is one of the associated properties and of which there has been a conditionally exempt transfer.
- (7) Where, after a relevant disposal (that is, a disposal mentioned in subsection (5)(a) or (b) above made in circumstances where that subsection applies), a person beneficially entitled to the property (or part) concerned dies or the property (or part) concerned is disposed of, the death or disposal is not a chargeable event with respect to the property (or part) concerned unless there has again been a conditionally exempt transfer of the property (or part) concerned after the relevant disposal.
- (8) The death of a person beneficially entitled to property, or the disposal of property (or part) otherwise than by sale, is not a chargeable event if—
- (a) the transfer of value made on the death or the disposal is itself a conditionally exempt transfer of the property (or part) concerned, or
- (b) the condition specified in subsection (8A) below is satisfied with respect to the property (or part) concerned.
- (8A) The condition referred to in subsection (8)(b) above is satisfied if—
- (a) the requisite undertaking described in section 31 above is given with respect to the property (or part) by such person as the Board think appropriate in the circumstances of the case, or
- (b) (where any of the property or part is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to the property (or part) by such person or persons as the Board think appropriate in the circumstances of the case.
- (9) If the whole or part of any property is disposed of by sale and—
- (a) the requisite undertaking described in section 31 above is given with respect to the property (or part) by such person as the Board think appropriate in the circumstances of the case, or
- (b) (where any of the property or part is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to the property (or part) by such person or persons as the Board think appropriate in the circumstances of the case,
the disposal is a chargeable event only with respect to the whole or part actually disposed of (if it is a chargeable event with respect to such whole or part apart from this subsection).
- (10) If—
- (a) the Treasury are satisfied that there has been a failure to observe, as to one of the associated properties or part of it, an undertaking for the property’s maintenance, repair, preservation, access or keeping, or
- (b) there is a disposal of one of the associated properties or part of it,
and it appears to the Treasury that the entity consisting of the associated properties has not been materially affected by the failure or disposal, they may direct that it shall be a chargeable event only with respect to the property or part as to which there has been a failure or disposal (if it is a chargeable event with respect to that property or part apart from this subsection.
##### 35A
- (1) An undertaking given under section 30, 32 or 32A above or paragraph 5 of Schedule 5 to this Act may be varied from time to time by agreement between the Board and the person bound by the undertaking.
- (2) Where a Special Commissioner is satisfied that—
- (a) the Board have made a proposal for the variation of such an undertaking to the person bound by the undertaking,
- (b) that person has failed to agree to the proposed variation within six months after the date on which the proposal was made, and
- (c) it is just and reasonable, in all the circumstances, to require the proposed variation to be made,
the Commissioner may direct that the undertaking is to have effect from a date specified by him as if the proposed variation had been agreed to by the person bound by the undertaking.
- (3) The date specified by the Special Commissioner must not be less than sixty days after the date of his direction.
- (4) A direction under this section shall not take effect if, before the date specified by the Special Commissioner, a variation different from that to which the direction relates is agreed between the Board and the person bound by the undertaking.
##### 39A
- (1) Where any part of the value transferred by a transfer of value is attributable to—
- (a) the value of relevant business property, or
- (b) the agricultural value of agricultural property,
then, for the purpose of attributing the value transferred (as reduced in accordance with section 104 or 116 below), to specific gifts and gifts of residue or shares of residue, sections 38 and 39 above shall have effect subject to the following provisions of this section.
- (2) The value of any specific gifts of relevant business property or agricultural property shall be taken to be their value as reduced in accordance with section 104 or 116 below.
- (3) The value of any specific gifts not falling within subsection (2) above shall be taken to be the appropriate fraction of their value.
- (4) In subsection (3) above “*the appropriate fraction*” means a fraction of which—
- (a) the numerator is the difference between the value transferred and the value, reduced as mentioned in subsection (2) above, of any gifts falling within that subsection, and
- (b) the denominator is the difference between the unreduced value transferred and the value, before the reduction mentioned in subsection (2) above, of any gifts falling within that subsection;
and in paragraph (b) above “*the unreduced value transferred*” means the amount which would be the value transferred by the transfer but for the reduction required by sections 104 and 116 below.
- (5) If or to the extent that specific gifts fall within paragraphs (a) and (b) of subsection (1) of section 38 above, the amount corresponding to the value of the gifts shall be arrived at in accordance with subsections (3) to (5) of that section by reference to their value reduced as mentioned in subsection (2) or, as the case may be, subsection (3) of this section.
- (6) For the purposes of this section the value of a specific gift of relevant business property or agricultural property does not include the value of any other gift payable out of that property; and that other gift shall not itself be treated as a specific gift of relevant business property or agricultural property.
- (7) In this section—
- “*agricultural property*” and “*the agricultural value of agricultural property*” have the same meaning as in Chapter II of Part V of this Act; and
- “*relevant business property*” has the same meaning as in Chapter I of that Part.
##### 46A
- (1) Subsections (2) and (4) below apply where—
- (a) a settlement commenced before 22nd March 2006,
- (b) a contract of life insurance was entered into before that day,
- (c) a premium payable under the contract is paid, or an allowed variation is made to the contract, at a particular time on or after that day,
- (d) immediately before that day, and at all subsequent times up to the particular time, there were rights under the contract that—
- (i) were comprised in the settlement, and
- (ii) were settled property in which a transitionally-protected interest (whether or not the same such interest throughout that period) subsisted,
- (e) rights under the contract become, by reference to payment of the premium or as a result of the variation,—
- (i) comprised in the settlement, and
- (ii) part of the settled property in which the then-current transitionally-protected interest subsists, and
- (f) any variation of the contract on or after 22nd March 2006 but before the particular time, so far as it is a variation that—
- (i) increased the benefits secured by the contract, or
- (ii) extended the term of the insurance provided by the contract,
was an allowed variation.
- (2) For the purposes of the provisions mentioned in subsection (3) below—
- (a) the rights mentioned in subsection (1)(e) above shall be taken to have become comprised in the settlement, and
- (b) the person beneficially entitled to the then-current transitionally-protected interest shall be taken to have become beneficially entitled to his interest in possession so far as it subsists in those rights,
before 22nd March 2006.
- (3) Those provisions are—
- section 3A(2) above;
- section 5(1A) above;
- section 49(1A) and (1B) below;
- section 51(1A) and (1B) below;
- section 52(2A) and (3A) below;
- section 53(1A) and (2A) below;
- section 54(2A) and (2B) below;
- section 54A(1A) below;
- section 57A(1A) below;
- section 58(1B) and (1C) below;
- section 59(1) and (2) below;
- section 80(4) below;
- section 100(1A) below;
- section 101(1A) below;
- section 102ZA(1) of the Finance Act 1986 (gifts with reservation); and
- sections 72(1A) and (2A) and 73(2A) of the 1992 Act.
- (4) If payment of the premium is a transfer of value made by an individual, that transfer of value is a potentially exempt transfer.
- (5) In this section—
- “*allowed variation*”, in relation to a contract, means a variation that takes place by operation of, or as a result of exercise of rights conferred by, provisions forming part of the contract immediately before 22nd March 2006;
- “*transitionally-protected interest*” means—an interest in possession to which a person was beneficially entitled immediately before, and on, 22nd March 2006, ora transitional serial interest.
##### 46B
- (1) Subsections (2) and (5) below apply where—
- (a) a settlement commenced before 22nd March 2006,
- (b) a contract of life insurance was entered into before that day,
- (c) a premium payable under the contract is paid, or an allowed variation is made to the contract, at a particular time on or after that day,
- (d) immediately before that day, and at all subsequent times up to the particular time, there were rights under the contract that—
- (i) were comprised in the settlement, and
- (ii) were settled property to which section 71 below applied,
- (e) rights under the contract become, by reference to payment of the premium or as a result of the variation, comprised in the settlement, and
- (f) any variation of the contract on or after 22nd March 2006 but before the particular time, so far as it was a variation that—
- (i) increased the benefits secured by the contract, or
- (ii) extended the term of the insurance provided by the contract,
was an allowed variation.
- (2) If the rights mentioned in subsection (1)(e) above would, but for subsection (1A) of section 71 below, become property to which that section applies, those rights shall become settled property to which that section applies when they become comprised in the settlement.
- (3) Subsection (5) below also applies where—
- (a) a settlement commenced before 22nd March 2006,
- (b) a contract of life insurance was entered into before that day,
- (c) a premium payable under the contract is paid, or an allowed variation is made to the contract, at a particular time on or after that day when there are rights under the contract—
- (i) that are comprised in the settlement and are settled property to which section 71A or 71D below applies,
- (ii) that immediately before that day were settled property to which section 71 below applied, and
- (iii) that on or after that day, but before the particular time, became property to which section 71A or 71D below applies in circumstances falling within subsection (4) below,
- (d) rights under the contract become, by reference to payment of the premium or as a result of the variation, comprised in the settlement, and
- (e) any variation of the contract on or after 22nd March 2006 but before the particular time, so far as it was a variation that—
- (i) increased the benefits secured by the contract, or
- (ii) extended the term of the insurance provided by the contract,
was an allowed variation.
- (4) The circumstances referred to in subsection (3)(c)(iii) above are—
- (a) in the case of property to which section 71D below applies, that the property on becoming property to which section 71D below applies ceased to be property to which section 71 below applied without ceasing to be settled property;
- (b) in the case of property to which section 71A below applies—
- (i) that the property on becoming property to which section 71A below applies ceased, by the operation of section 71(1B) below, to be property to which section 71 below applied, or
- (ii) that the property, having become property to which section 71D below applied in circumstances falling within paragraph (a) above, on becoming property to which 71A below applies ceased, by the operation of section 71D(5)(a) below, to be property to which section 71D below applied.
- (5) If payment of the premium is a transfer of value made by an individual, that transfer of value is a potentially exempt transfer.
- (6) In this section “*allowed variation*”, in relation to a contract, means a variation that takes place by operation of, or as a result of exercise of rights conferred by, provisions forming part of the contract immediately before 22nd March 2006.
##### 47A
In this Act “*settlement power*” means any power over, or exercisable (whether directly or indirectly) in relation to, settled property or a settlement.
##### 49A
- (1) Where a person (“L”) is beneficially entitled to an interest in possession in settled property, for the purposes of this Chapter that interest is an “immediate post-death interest” only if the following conditions are satisfied.
- (2) Condition 1 is that the settlement was effected by will or under the law relating to intestacy.
- (3) Condition 2 is that L became beneficially entitled to the interest in possession on the death of the testator or intestate.
- (4) Condition 3 is that—
- (a) section 71A below does not apply to the property in which the interest subsists, and
- (b) the interest is not a disabled person's interest.
- (5) Condition 4 is that Condition 3 has been satisfied at all times since L became beneficially entitled to the interest in possession.
##### 49B
Where a person is beneficially entitled to an interest in possession in settled property, for the purposes of this Chapter that interest is a “transitional serial interest” only—
- (a) if section 49C or 49D below so provides, or
- (b) if, and to the extent that, section 49E below so provides.
##### 49C
- (1) Where a person (“B”) is beneficially entitled to an interest in possession in settled property (“the current interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met.
- (2) Condition 1 is that—
- (a) the settlement commenced before 22nd March 2006, and
- (b) immediately before 22nd March 2006, the property then comprised in the settlement was property in which B, or some other person, was beneficially entitled to an interest in possession (“the prior interest”).
- (3) Condition 2 is that the prior interest came to an end at a time on or after 22nd March 2006 but before 6th April 2008.
- (4) Condition 3 is that B became beneficially entitled to the current interest at that time.
- (5) Condition 4 is that—
- (a) section 71A below does not apply to the property in which the interest subsists, and
- (b) the interest is not a disabled person's interest.
##### 49D
- (1) Where a person (“E”) is beneficially entitled to an interest in possession in settled property (“the successor interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met.
- (2) Condition 1 is that—
- (a) the settlement commenced before 22nd March 2006, and
- (b) immediately before 22nd March 2006, the property then comprised in the settlement was property in which a person other than E was beneficially entitled to an interest in possession (“the previous interest”).
- (3) Condition 2 is that the previous interest came to an end on or after 6th April 2008 on the death of that other person (“F”).
- (4) Condition 3 is that, immediately before F died, F was the spouse or civil partner of E.
- (5) Condition 4 is that E became beneficially entitled to the successor interest on F's death.
- (6) Condition 5 is that—
- (a) section 71A below does not apply to the property in which the successor interest subsists, and
- (b) the successor interest is not a disabled person's interest.
##### 49E
- (1) Where—
- (a) a person (“C”) is beneficially entitled to an interest in possession in settled property (“the present interest”), and
- (b) on C's becoming beneficially entitled to the present interest, the settled property consisted of, or included, rights under a contract of life insurance entered into before 22nd March 2006,
the present interest so far as subsisting in rights under the contract, or in property comprised in the settlement that directly or indirectly represents rights under the contract, is a “*transitional serial interest*” for the purposes of this Chapter if the following conditions are met.
- (2) Condition 1 is that—
- (a) the settlement commenced before 22nd March 2006, and
- (b) immediately before 22nd March 2006—
- (i) the property then comprised in the settlement consisted of, or included, rights under the contract, and
- (ii) those rights were property in which C, or some other person, was beneficially entitled to an interest in possession (“the earlier interest”).
- (3) Condition 2 is that—
- (a) the earlier interest came to an end at a time on or after 6th April 2008 (“the earlier-interest end-time”) on the death of the person beneficially entitled to it and C became beneficially entitled to the present interest—
- (i) at the earlier-interest end-time, or
- (ii) on the coming to an end, on the death of the person beneficially entitled to it, of an interest in possession to which that person became beneficially entitled at the earlier-interest end-time, or
- (iii) on the coming to an end of the second or last in an unbroken sequence of two or more consecutive interests in possession to the first of which a person became beneficially entitled at the earlier-interest end-time and each of which ended on the death of the person beneficially entitled to it, or
- (b) C became beneficially entitled to the present interest—
- (i) on the coming to an end, on the death of the person entitled to it, of an interest in possession that is a transitional serial interest under section 49C above, or
- (ii) on the coming to an end of the second or last in an unbroken sequence of two or more consecutive interests in possession the first of which was a transitional serial interest under section 49C above and each of which ended on the death of the person beneficially entitled to it.
- (4) Condition 3 is that rights under the contract were comprised in the settlement throughout the period beginning with 22nd March 2006 and ending with C's becoming beneficially entitled to the present interest.
- (5) Condition 4 is that—
- (a) section 71A below does not apply to the property in which the present interest subsists, and
- (b) the present interest is not a disabled person's interest.
##### 54A
- (1) If the circumstances fall within subsection (2) below, this section applies to any chargeable transfer made—
- (a) under section 52 above, on the coming to an end of an interest in possession in settled property during the life of the person beneficially entitled to it, or
- (b) on the death of a person beneficially entitled to an interest in possession in settled property;
and in the following provisions of this section the interest in possession mentioned in paragraph (a) or paragraph (b) above is referred to as “*the relevant interest*”.
- (2) The circumstances referred to in subsection (1) above are—
- (a) that the whole or part of the value transferred by the transfer is attributable to property in which the relevant interest subsisted and which became settled property in which there subsisted an interest in possession (whether the relevant interest or any previous interest) on the making by the settlor of a potentially exempt transfer at any time on or after 17th March 1987 and within the period of seven years ending with the date of the chargeable transfer; and
- (b) that the settlor is alive at the time when the relevant interest comes to an end; and
- (c) that, on the coming to an end of the relevant interest, any of the property in which that interest subsisted becomes settled property in which no qualifying interest in possession (as defined in section 59 below) subsists, other than property to which section 71 below applies; and
- (d) that, within six months of the coming to an end of the relevant interest, any of the property in which that interest subsisted has neither—
- (i) become settled property in which a qualifying interest in possession subsists or to which section 71 below applies, nor
- (ii) become property to which an individual is beneficially entitled.
- (3) In the following provisions of this section “*the special rate property*”, in relation to a chargeable transfer to which this section applies, means the property in which the relevant interest subsisted or, in a case where—
- (a) any part of that property does not fall within subsection (2)(a) above, or
- (b) any part of that property does not become settled property of the kind mentioned in subsection (2)(c) above,
so much of that property as appears to the Board or, on appeal, to the Special Commissioners to be just and reasonable.
- (4) Where this section applies to a chargeable transfer (in this section referred to as “*the relevant transfer*”), the tax chargeable on the value transferred by the transfer shall be whichever is the greater of the tax that would have been chargeable apart from this section and the tax determined in accordance with subsection (5) below.
- (5) The tax determined in accordance with this subsection is the aggregate of—
- (a) the tax that would be chargeable on a chargeable transfer of the description specified in subsection (6) below, and
- (b) so much (if any) of the tax that would, apart from this section, have been chargeable on the value transferred by the relevant transfer as is attributable to the value of property other than the special rate property.
- (6) The chargeable transfer postulated in subsection (5)(a) above is one—
- (a) the value transferred by which is equal to the value transferred by the relevant transfer or, where only part of that value is attributable to the special rate property, that part of that value;
- (b) which is made at the time of the relevant transfer by a transferor who has in the preceding seven years made chargeable transfers having an aggregate value equal to the aggregate of the values transferred by any chargeable transfers made by the settlor in the period of seven years ending with the date of the potentially exempt transfer; and
- (c) for which the applicable rate or rates are one-half of the rate or rates referred to in section 7(1) above.
- (7) This section has effect subject to section 54B below.
##### 54B
- (1) The death of the settlor, at any time after a chargeable transfer to which section 54A above applies, shall not increase the tax chargeable on the value transferred by the transfer unless, at the time of the transfer, the tax determined in accordance with subsection (5) of that section is greater than the tax that would be chargeable apart from that section.
- (2) The death of the person who was beneficially entitled to the relevant interest, at any time after a chargeable transfer to which section 54A above applies, shall not increase the tax chargeable on the value transferred by the transfer unless, at the time of the transfer, the tax that would be chargeable apart from that section is greater than the tax determined in accordance with subsection (5) of that section.
- (3) Where the tax chargeable on the value transferred by a chargeable transfer to which section 54A above applies falls to be determined in accordance with subsection (5) of that section, the amount referred to in paragraph (a) of that subsection shall be treated for the purposes of this Act as tax attributable to the value of the property in which the relevant interest subsisted.
- (4) Subsection (5) below shall apply if—
- (a) during the period of seven years preceding the date on which a chargeable transfer to which section 54A above applies (“the current transfer”) is made, there has been another chargeable transfer to which that section applied, and
- (b) the person who is for the purposes of the current transfer the settlor mentioned in subsection (2)(a) of that section is the settlor for the purposes of the other transfer (whether or not the settlements are the same);
and in subsections (5) and (6) below the other transfer is referred to as the “*previous transfer*”.
- (5) Where this subsection applies, the appropriate amount in relation to the previous transfer (or, if there has been more than one previous transfer, the aggregate of the appropriate amounts in relation to each) shall, for the purposes of calculating the tax chargeable on the current transfer, be taken to be the value transferred by a chargeable transfer made by the settlor immediately before the potentially exempt transfer was made.
- (6) In subsection (5) above “*the appropriate amount*”, in relation to a previous transfer, means so much of the value transferred by the previous transfer as was attributable to the value of property which was the special rate property in relation to that transfer.
- (7) In this section—
- “*the relevant interest*” has the meaning given by subsection (1) of section 54A above; and
- “*the special rate property*” has the meaning given by subsection (3) of that section.
##### 55A
- (1) Where a person makes a disposition by which he acquires a settlement power for consideration in money or money’s worth—
- (a) section 10(1) above shall not apply to the disposition;
- (b) the person shall be taken for the purposes of this Act to make a transfer of value;
- (c) the value transferred shall be determined without bringing into account the value of anything which the person acquires by the disposition; and
- (d) sections 18 and 23 to 27 above shall not apply in relation to that transfer of value.
- (2) For the purposes of this section, a person acquires a settlement power if he becomes entitled—
- (a) to a settlement power,
- (b) to exercise, or to secure or prevent the exercise of, a settlement power (whether directly or indirectly), or
- (c) to restrict, or secure a restriction on, the exercise of a settlement power (whether directly or indirectly),
as a result of transactions which include a disposition (whether to him or another) of a settlement power or of any power of a kind described in paragraph (b) or (c) above which is exercisable in relation to a settlement power.
##### 57A
- (1) Subject to the following provisions, subsection (2) below applies where—
- (a) a person dies who immediately before his death was beneficially entitled to an interest in possession in property comprised in a settlement, and
- (b) within two years after his death the property becomes held on trusts (whether of that or another settlement) by virtue of which a direction under paragraph 1 of Schedule 4 to this Act is given in respect of the property.
- (2) Where this subsection applies, this Act shall have effect as if the property had on the death of the deceased become subject to the trusts referred to in subsection (1)(b) above; and accordingly no disposition or other event occurring between the date of the death and the date on which the property becomes subject to those trusts shall, so far as it relates to the property, be a transfer of value or otherwise constitute an occasion for a charge to tax.
- (3) Where property becomes held on trusts of the kind specified in paragraph (b) of subsection (1) above as the result of proceedings before a court and could not have become so held without such proceedings, that paragraph shall have effect as if it referred to three years instead of two.
- (4) Subsection (2) above shall not apply if—
- (a) the disposition by which the property becomes held on the trusts referred to in subsection (1)(b) above depends on a condition or is defeasible; or
- (b) the property which becomes held on those trusts is itself an interest in settled property; or
- (c) the trustees who hold the property on those trusts have, for a consideration in money or money’s worth, acquired an interest under a settlement in which the property was comprised immediately before the death of the person referred to in subsection (1)(a) above or at any time thereafter; or
- (d) the property which becomes held on those trusts does so for a consideration in money or money’s worth, or is acquired by the trustees for such a consideration, or has at any time since the death of the person referred to in subsection (1)(a) above been acquired by any other person for such a consideration.
- (5) If the value of the property when it becomes held on the trusts referred to in subsection (1)(b) above is lower than so much of the value transferred on the death of the person referred to in subsection (1)(a) as is attributable to the property, subsection (2) above shall apply to the property only to the extent of the lower value.
- (6) For the purposes of this section, a person shall be treated as acquiring property for a consideration in money or money’s worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property. ]
#### Relevant property.
##### 71A
- (1) This section applies to settled property (including property settled before 22nd March 2006) if—
- (a) it is held on statutory trusts for the benefit of a bereaved minor under sections 46 and 47(1) of the Administration of Estates Act 1925 (succession on intestacy and statutory trusts in favour of issue of intestate), or
- (b) it is held on trusts for the benefit of a bereaved minor and subsection (2) below applies to the trusts,
but this section does not apply to property in which a disabled person's interest subsists.
- (2) This subsection applies to trusts—
- (a) established under the will of a deceased parent of the bereaved minor, or
- (b) established under the Criminal Injuries Compensation Scheme,
which secure that the conditions in subsection (3) below are met.
- (3) Those conditions are—
- (a) that the bereaved minor, if he has not done so before attaining the age of 18, will on attaining that age become absolutely entitled to—
- (i) the settled property,
- (ii) any income arising from it, and
- (iii) any income that has arisen from the property held on the trusts for his benefit and been accumulated before that time,
- (b) that, for so long as the bereaved minor is living and under the age of 18, if any of the settled property is applied for the benefit of a beneficiary, it is applied for the benefit of the bereaved minor, and
- (c) that, for so long as the bereaved minor is living and under the age of 18, either—
- (i) the bereaved minor is entitled to all of the income (if there is any) arising from any of the settled property, or
- (ii) no such income may be applied for the benefit of any other person.
- (4) Trusts such as are mentioned in paragraph (a) or (b) of subsection (2) above are not to be treated as failing to secure that the conditions in subsection (3) above are met by reason only of—
- (a) the trustees' having the powers conferred by section 32 of the Trustee Act 1925 (powers of advancement),
- (b) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by proviso (a) of subsection (1) of that section,
- (c) the trustees' having the powers conferred by section 33 of the Trustee Act (Northern Ireland) 1958 (corresponding provision for Northern Ireland),
- (d) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by subsection (1)(a) of that section, or
- (e) the trustees' having powers to the like effect as the powers mentioned in any of paragraphs (a) to (d) above.
- (5) In this section “*the Criminal Injuries Compensation Scheme*” means—
- (a) the schemes established by arrangements made under the Criminal Injuries Compensation Act 1995,
- (b) arrangements made by the Secretary of State for compensation for criminal injuries in operation before the commencement of those schemes, and
- (c) the scheme established under the Criminal Injuries Compensation (Northern Ireland) Order 2002.
- (6) The preceding provisions of this section apply in relation to Scotland as if, in subsection (2) above, before “which” there were inserted the purposes of.
##### 71B
- (1) Subject to subsections (2) and (3) below, there shall be a charge to tax under this section—
- (a) where settled property ceases to be property to which section 71A above applies, and
- (b) in a case where paragraph (a) above does not apply, where the trustees make a disposition as a result of which the value of settled property to which section 71A above applies is less than it would be but for the disposition.
- (2) Tax is not charged under this section where settled property ceases to be property to which section 71A applies as a result of—
- (a) the bereaved minor attaining the age of 18 or becoming, under that age, absolutely entitled as mentioned in section 71A(3)(a) above, or
- (b) the death under that age of the bereaved minor, or
- (c) being paid or applied for the advancement or benefit of the bereaved minor.
- (3) Subsections (3) to (8) and (10) of section 70 above apply for the purposes of this section as they apply for the purposes of that section, but—
- (a) with the substitution of a reference to subsection (1)(b) above for the reference in subsection (4) of section 70 above to subsection (2)(b) of that section,
- (b) with the substitution of a reference to property to which section 71A above applies for each of the references in subsections (3), (5) and (8) of section 70 above to property to which that section applies,
- (c) as if, for the purposes of section 70(8) above as applied by this subsection, property—
- (i) which is property to which section 71A above applies,
- (ii) which, immediately before it became property to which section 71A above applies, was property to which section 71 above applied, and
- (iii) which, by the operation of section 71(1B) above, ceased on that occasion to be property to which section 71 above applied,
had become property to which section 71A above applies not on that occasion but on the occasion (or last occasion) before then when it became property to which section 71 above applied, and
- (d) as if, for the purposes of section 70(8) above as applied by this subsection, property—
- (i) which is property to which section 71A above applies,
- (ii) which, immediately before it became property to which section 71A above applies, was property to which section 71D below applied, and
- (iii) which, by the operation of section 71D(5)(a) below, ceased on that occasion (“the 71D-to-71A occasion”) to be property to which section 71D below applied,
had become property to which section 71A above applies not on the 71D-to-71A occasion but on the relevant earlier occasion.
- (4) In subsection (3)(d) above—
- (a) “*the relevant earlier occasion*” means the occasion (or last occasion) before the 71D-to-71A occasion when the property became property to which section 71D below applied, but
- (b) if the property, when it became property to which section 71D below applied, ceased at the same time to be property to which section 71 above applied without ceasing to be settled property, “*the relevant earlier occasion*” means the occasion (or last occasion) when the property became property to which section 71 above applied.
##### 71C
In sections 71A and 71B above “*bereaved minor*” means a person—
- (a) who has not yet attained the age of 18, and
- (b) at least one of whose parents has died.
##### 71D
- (1) This section applies to settled property (including property settled before 22nd March 2006), but subject to subsection (5) below, if—
- (a) the property is held on trusts for the benefit of a person who has not yet attained the age of 25,
- (b) at least one of the person's parents has died, and
- (c) subsection (2) below applies to the trusts.
- (2) This subsection applies to trusts—
- (a) established under the will of a deceased parent of the person mentioned in subsection (1)(a) above, or
- (b) established under the Criminal Injuries Compensation Scheme,
which secure that the conditions in subsection (6) below are met.
- (3) Subsection (4) has effect where—
- (a) at any time on or after 22nd March 2006 but before 6th April 2008, or on the coming into force of paragraph 3(1) of Schedule 20 to the Finance Act 2006, any property ceases to be property to which section 71 above applies without ceasing to be settled property, and
- (b) immediately after the property ceases to be property to which section 71 above applies—
- (i) it is held on trusts for the benefit of a person who has not yet attained the age of 25, and
- (ii) the trusts secure that the conditions in subsection (6) below are met.
- (4) From the time when the property ceases to be property to which section 71 above applies, but subject to subsection (5) below, this section applies to the property (if it would not apply to the property by virtue of subsection (1) above) for so long as—
- (a) the property continues to be settled property held on trusts such as are mentioned in subsection (3)(b)(i) above, and
- (b) the trusts continue to secure that the conditions in subsection (6) below are met.
- (5) This section does not apply—
- (a) to property to which section 71A above applies,
- (b) to property to which section 71 above, or section 89 below, applies, or
- (c) to settled property if a person is beneficially entitled to an interest in possession in the settled property and—
- (i) the person became beneficially entitled to the interest in possession before 22nd March 2006, or
- (ii) the interest in possession is an immediate post-death interest, or a transitional serial interest, and the person became beneficially entitled to it on or after 22nd March 2006.
- (6) Those conditions are—
- (a) that the person mentioned in subsection (1)(a) or (3)(b)(i) above (“B”), if he has not done so before attaining the age of 25, will on attaining that age become absolutely entitled to—
- (i) the settled property,
- (ii) any income arising from it, and
- (iii) any income that has arisen from the property held on the trusts for his benefit and been accumulated before that time,
- (b) that, for so long as B is living and under the age of 25, if any of the settled property is applied for the benefit of a beneficiary, it is applied for the benefit of B, and
- (c) that, for so long as B is living and under the age of 25, either—
- (i) B is entitled to all of the income (if there is any) arising from any of the settled property, or
- (ii) no such income may be applied for the benefit of any other person.
- (7) For the purposes of this section, trusts are not to be treated as failing to secure that the conditions in subsection (6) above are met by reason only of—
- (a) the trustees' having the powers conferred by section 32 of the Trustee Act 1925 (powers of advancement),
- (b) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by proviso (a) of subsection (1) of that section,
- (c) the trustees' having the powers conferred by section 33 of the Trustee Act (Northern Ireland) 1958 (corresponding provision for Northern Ireland),
- (d) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by subsection (1)(a) of that section, or
- (e) the trustees' having powers to the like effect as the powers mentioned in any of paragraphs (a) to (d) above.
- (8) In this section “*the Criminal Injuries Compensation Scheme*” means—
- (a) the schemes established by arrangements made under the Criminal Injuries Compensation Act 1995,
- (b) arrangements made by the Secretary of State for compensation for criminal injuries in operation before the commencement of those schemes, and
- (c) the scheme established under the Criminal Injuries Compensation (Northern Ireland) Order 2002.
- (9) The preceding provisions of this section apply in relation to Scotland—
- (a) as if, in subsection (2) above, before “which” there were inserted the purposes of, and
- (b) as if, in subsections (3)(b)(ii) and (4)(b) above, before “trusts” there were inserted purposes of the.
##### 71E
- (1) Subject to subsections (2) to (4) below, there shall be a charge to tax under this section—
- (a) where settled property ceases to be property to which section 71D above applies, or
- (b) in a case where paragraph (a) above does not apply, where the trustees make a disposition as a result of which the value of the settled property to which section 71D above applies is less than it would be but for the disposition.
- (2) Tax is not charged under this section where settled property ceases to be property to which section 71D above applies as a result of—
- (a) B becoming, at or under the age of 18, absolutely entitled as mentioned in section 71D(6)(a) above,
- (b) the death, under the age of 18, of B,
- (c) becoming, at a time when B is living and under the age of 18, property to which section 71A above applies, or
- (d) being paid or applied for the advancement or benefit of B—
- (i) at a time when B is living and under the age of 18, or
- (ii) on B's attaining the age of 18.
- (3) Tax is not charged under this section in respect of—
- (a) a payment of costs or expenses (so far as they are fairly attributable to property to which section 71D above applies), or
- (b) a payment which is (or will be) income of any person for any of the purposes of income tax or would for any of those purposes be income of a person not resident in the United Kingdom if he were so resident,
or in respect of a liability to make such a payment.
- (4) Tax is not charged under this section by virtue of subsection (1)(b) above if the disposition is such that, were the trustees beneficially entitled to the settled property, section 10 or section 16 above would prevent the disposition from being a transfer of value.
- (5) For the purposes of this section the trustees shall be treated as making a disposition if they omit to exercise a right (unless it is shown that the omission was not deliberate) and the disposition shall be treated as made at the time or latest time when they could have exercised the right.
##### 71F
- (1) Where—
- (a) tax is charged under section 71E above by reason of the happening of an event within subsection (2) below, and
- (b) that event happens after B has attained the age of 18,
the tax is calculated in accordance with this section.
- (2) Those events are—
- (a) B becoming absolutely entitled as mentioned in section 71D(6)(a) above,
- (b) the death of B, and
- (c) property being paid or applied for the advancement or benefit of B.
- (3) The amount of the tax is given by—
$Chargeableamount×Relevantfraction×Settlement rate$
- (4) For the purposes of subsection (3) above, the “Chargeable amount” is—
- (a) the amount by which the value of property which is comprised in the settlement and to which section 71D above applies is less immediately after the event giving rise to the charge than it would be but for the event, or
- (b) where the tax is payable out of settled property to which section 71D above applies immediately after the event, the amount which, after deducting the tax, is equal to the amount on which tax would be charged by virtue of paragraph (a) above.
- (5) For the purposes of subsection (3) above, the “Relevant fraction” is three tenths multiplied by so many fortieths as there are complete successive quarters in the period—
- (a) beginning with the day on which B attained the age of 18 or, if later, the day on which the property became property to which section 71D above applies, and
- (b) ending with the day before the occasion of the charge.
- (6) Where the whole or part of the Chargeable amount is attributable to property that was excluded property at any time during the period mentioned in subsection (5) above then, in determining the “*Relevant fraction*” in relation to that amount or part, no quarter throughout which that property was excluded property shall be counted.
- (7) For the purposes of subsection (3) above, the “Settlement rate” is the effective rate (that is to say, the rate found by expressing the tax chargeable as a percentage of the amount on which it is charged) at which tax would be charged on the value transferred by a chargeable transfer of the description specified in subsection (8) below.
- (8) The chargeable transfer postulated in subsection (7) above is one—
- (a) the value transferred by which is equal to an amount determined in accordance with subsection (9) below,
- (b) which is made at the time of the charge to tax under section 71E above by a transferor who has in the period of seven years ending with the day of the occasion of the charge made chargeable transfers having an aggregate value equal to that of any chargeable transfers made by the settlor in the period of seven years ending with the day on which the settlement commenced, disregarding transfers made on that day, and
- (c) on which tax is charged in accordance with section 7(2) above.
- (9) The amount referred to in subsection (8)(a) above is equal to the aggregate of—
- (a) the value, immediately after the settlement commenced, of the property then comprised in it,
- (b) the value, immediately afer a related settlement commenced, of the property then comprised in it, and
- (c) the value, immediately after it became comprised in the settlement, of any property which became so comprised after the settlement commenced and before the occasion of the charge under section 71E above (whether or not it has remained so comprised).
##### 71G
- (1) Where—
- (a) tax is charged under section 71E above, and
- (b) the tax does not fall to be calculated in accordance with section 71F above,
the tax is calculated in accordance with this section.
- (2) The amount on which the tax is charged is—
- (a) the amount by which the value of property which is comprised in the settlement and to which section 71D above applies is less immediately after the event giving rise to the charge than it would be but for the event, or
- (b) where the tax is payable out of settled property to which section 71D above applies immediately after the event, the amount which, after deducting the tax, is equal to the amount on which tax would be charged by virtue of paragraph (a) above.
- (3) The rate at which the tax is charged is the rate that would be given by subsections (6) to (8) of section 70 above—
- (a) if the reference to section 70 above in subsection (8)(a) of that section were a reference to section 71D above,
- (b) if the other references in those subsections to section 70 above were references to section 71E above, and
- (c) if, for the purposes of section 70(8) above, property—
- (i) which is property to which section 71D above applies,
- (ii) which, immediately before it became property to which section 71D above applies, was property to which section 71 applied, and
- (iii) which ceased on that occasion to be property to which section 71 above applied without ceasing to be settled property,
had become property to which section 71D above applies not on that occasion but on the occasion (or last occasion) before then when it became property to which section 71 above applied.
##### 71H
- (1) In sections 71A to 71G above “*parent*” includes step-parent.
- (2) For the purposes of sections 71A to 71G above, a deceased individual (“D”) shall be taken to have been a parent of another individual (“Y”) if, immediately before D died, D had—
- (a) parental responsibility for Y under the law of England and Wales,
- (b) parental responsibilities in relation to Y under the law of Scotland, or
- (c) parental responsibility for Y under the law of Northern Ireland.
- (3) In subsection (2)(a) above “*parental responsibility*” has the same meaning as in the Children Act 1989.
- (4) In subsection (2)(b) above “*parental responsibilities*” has the meaning given by section 1(3) of the Children (Scotland) Act 1995.
- (5) In subsection (2)(c) above “*parental responsibility*” has the same meaning as in the Children (Northern Ireland) Order 1995.
##### 79A
- (1) An undertaking given under section 78 or 79 above may be varied from time to time by agreement between the Board and the person bound by the undertaking.
- (2) Where a Special Commissioner is satisfied that—
- (a) the Board have made a proposal for the variation of such an undertaking to the person bound by the undertaking,
- (b) that person has failed to agree to the proposed variation within six months after the date on which the proposal was made, and
- (c) it is just and reasonable, in all the circumstances, to require the proposed variation to be made,
the Commissioner may direct that the undertaking is to have effect from a date specified by him as if the proposed variation had been agreed to by the person bound by the undertaking.
- (3) The date specified by the Special Commissioner must not be less than sixty days after the date of his direction.
- (4) A direction under this section shall not take effect if, before the date specified by the Special Commissioner, a variation different from that to which the direction relates is agreed between the Board and the person bound by the undertaking.
##### 81A
- (1) Where a reversionary interest in relevant property to which—
- (a) a person who acquired it for a consideration in money or money's worth, or
- (b) the settlor or the spouse or civil partner of the settlor,
(a “relevant reversioner”) is beneficially entitled comes to an end by reason of the relevant reversioner becoming entitled to an interest in possession in the relevant property, the relevant reversioner is to be treated as having made a disposition of the reversionary interest at that time.
- (2) A transfer of value of a reversionary interest in relevant property to which a relevant reversioner is beneficially entitled is to be taken to be a transfer which is not a potentially exempt transfer.
##### 89A
- (1) This section applies to property transferred by a person (“A”) into settlement on or after 22nd March 2006 if—
- (a) A was beneficially entitled to the property immediately before transferring it into settlement,
- (b) A satisfies the Commissioners for Her Majesty's Revenue and Customs that, when the property was transferred into settlement, A had a condition that it was at that time reasonable to expect would have such effects on A as to lead to A becoming—
- (i) a person falling within section 89(4)(a) above,
- (ii) in receipt of an attendance allowance mentioned in section 89(4)(b) above, or
- (iii) in receipt of a disability living allowance mentioned in section 89(4)(c) above by virtue of entitlement to the care component at the highest or middle rate, and
- (c) the property is held on trusts—
- (i) under which, during the life of A, no interest in possession in the settled property subsists, and
- (ii) which secure that Conditions 1 and 2 are met.
- (2) Condition 1 is that if any of the settled property is applied during A's life for the benefit of a beneficiary, it is applied for the benefit of A.
- (3) Condition 2 is that any power to bring the trusts mentioned in subsection (1)(c) above to an end during A's life is such that, in the event of the power being exercised during A's life, either—
- (a) A or another person will, on the trusts being brought to an end, be absolutely entitled to the settled property, or
- (b) on the trusts being brought to an end, a disabled person's interest within section 89B(1)(a) or (c) below will subsist in the settled property.
- (4) If this section applies to settled property transferred into settlement by a person, the person shall be treated as beneficially entitled to an interest in possession in the settled property.
- (5) For the purposes of subsection (1)(b)(ii) above, assume—
- (a) that A will meet the conditions as to residence under section 64(1) of whichever of the 1992 Acts is applicable, and
- (b) that there will be no provision made by regulations under section 67(1) and (2) of that Act.
- (6) For the purposes of subsection (1)(b)(iii) above, assume—
- (a) that A will meet the prescribed conditions as to residence under section 71(6) of whichever of the 1992 Acts is applicable, and
- (b) that there will be no provision made by regulations under section 72(8) of that Act.
- (7) For the purposes of subsection (3) above, ignore—
- (a) power to give directions as to the settled property that is exercisable jointly by the persons who between them are entitled to the entire beneficial interest in the property, and
- (b) anything that could occur as a result of exercise of any such power.
- (8) In this section “*the 1992 Acts*” means—
- the Social Security Contributions and Benefits Act 1992, and
- the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
##### 89B
- (1) In this Act “*disabled person's interest*” means—
- (a) an interest in possession to which a person is under section 89(2) above treated as beneficially entitled,
- (b) an interest in possession to which a person is under section 89A(4) above treated as beneficially entitled,
- (c) an interest in possession in settled property (other than an interest within paragraph (a) or (b) above) to which a disabled person becomes beneficially entitled on or after 22nd March 2006, or
- (d) an interest in possession in settled property (other than an interest within paragraph (a) or (b) above) to which a person (“A”) is beneficially entitled if—
- (i) A is the settlor,
- (ii) A was beneficially entitled to the property immediately before transferring it into settlement,
- (iii) A satisfies Her Majesty's Commissioners for Revenue and Customs as mentioned in section 89A(1)(b) above,
- (iv) the settled property was transferred into settlement on or after 22nd March 2006, and
- (v) the trusts on which the settled property is held secure that, if any of the settled property is applied during A's life for the benefit of a beneficiary, it is applied for the benefit of A.
- (2) Subsections (4) to (6) of section 89 above (meaning of “disabled person” in subsection (1) of that section) have effect for the purposes of subsection (1)(c) above as they have effect for the purposes of subsection (1) of that section.
- (3) Section 71D above does not apply to property in which there subsists a disabled person's interest within subsection (1)(c) above (but see also section 71D(5) above).
#### Added property, etc.
##### 109A
##### 113A
- (1) Where any part of the value transferred by a potentially exempt transfer which proves to be a chargeable transfer would (apart from this section) be reduced in accordance with the preceding provisions of this Chapter, it shall not be so reduced unless the conditions in subsection (3) below are satisfied.
- (2) Where—
- (a) any part of the value transferred by any chargeable transfer, other than a potentially exempt transfer, is reduced in accordance with the preceding provisions of this Chapter, and
- (b) the transfer is made within seven years of the death of the transferor,
then, unless the conditions in subsection (3) below are satisfied, the additional tax chargeable by reason of the death shall be calculated as if the value transferred had not been so reduced.
- (3) The conditions referred to in subsections (1) and (2) above are—
- (a) that the original 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; and
- (b) except to the extent that the original property consists of shares or securities to which subsection (3A) below applies that, in relation to a notional transfer of value made by the transferee immediately before the death, the original property would (apart from section 106 above) be relevant business property.
- (3A) This subsection applies to shares or securities—
- (a) which were quoted at the time of the chargeable transfer referred to in subsection (1) or subsection (2) above; or
- (b) which fell within paragraph (b) or (bb) of section 105(1) above in relation to that transfer and were unquoted throughout the period referred to in subsection (3)(a) above.
- (3B) In subsection (3A) above “*quoted*”, in relation to any shares or securities, means listed on a recognised stock exchange and “*unquoted*”, in relation to any shares or securities, means not so listed.
- (4) If the transferee has died before the transferor, the reference in subsection (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) If the conditions in subsection (3) above are satisfied only with respect to part of the original property, then,—
- (a) in a case falling within subsection (1) above, only a proportionate part of so much of the value transferred as is attributable to the original property shall be reduced in accordance with the preceding provisions of this Chapter, and
- (b) in a case falling within subsection (2) above, the additional tax shall be calculated as if only a proportionate part of so much of the value transferred as was attributable to the original property had been so reduced.
- (6) Where any shares owned by the transferee immediately before the death in question—
- (a) would under any of the provisions of sections 126 to 136 of the 1992 Act be identified with the original property (or part of it), or
- (b) were issued to him in consideration of the transfer of a business or interest in a business consisting of the original property (or part of it),
they shall be treated for the purposes of this section as if they were the original property (or that part of it).
- (7) This section has effect subject to section 113B below.
- (7A) The provisions of this Chapter for the reduction of value transferred shall be disregarded in any determination for the purposes of this section of whether there is a potentially exempt or chargeable transfer in any case.
- (8) In this section—
- “*the original property*” means the property which was relevant business property in relation to the chargeable transfer referred to in subsection (1) or subsection (2) above; and
- “*the transferee*” means the person whose property the original property became on that chargeable transfer or, where on the transfer the original property became or remained settled property 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.
##### 113B
- (1) Subject to subsection (2) below, this section applies where—
- (a) the transferee has disposed of all or part of the original property before the death of the transferor; and
- (b) the whole of the consideration received by him for the disposal has been applied by him in acquiring other property (in this section referred to as “*the replacement property*”).
- (2) This section does not apply unless—
- (a) the replacement property is acquired, or a binding contract for its acquisition is entered into, within the allowed period after the disposal of the original property (or, as the case may be, the part concerned); and
- (b) the disposal and acquisition are both made in transactions at arm’s length or on terms such as might be expected to be included in a transaction at arm’s length.
- (3) Where this section applies, the conditions in section 113A(3) above shall be taken to be satisfied in relation to the original property (or, as the case may be, the part concerned) if—
- (a) the replacement property is owned by the transferee immediately before the death of the transferor; and
- (b) throughout the period beginning with the date of the chargeable transfer and ending with the death (disregarding any period between the disposal and acqusition) either the original property or the replacement property was owned by transferee; and
- (c) in relation to a notional transfer of value made by the transferee immediately before the death, the replacement property would (apart from section 106 above) be relevant business property.
- (4) If the transferee has died before the transferor, any reference in subsections (1) to (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) In any case where—
- (a) all or part of the original property has been disposed of before the death of the transferor or is excluded by section 113 above from being relevant business property in relation to the notional transfer of value referred to in section 113A(3)(b) above, and
- (b) the replacement property is acquired, or a binding contract for its acquisition is entered into, after the death of the transferor but within the allowed period after the disposal of the original property or part, and
- (c) the transferor dies before the transferee,
subsection (3) above shall have effect with the omission of paragraph (a), and as if any reference to a time immediately before the death of the transferor or to the death were a reference to the time when the replacement property is acquired.
- (6) Section 113A(6) above shall have effect in relation to the replacement property as it has effect in relation to the original property.
- (7) Where a binding contract for the disposal of any property is entered into at any time before the disposal of the property, the disposal shall be regarded for the purposes of subsections (2)(a) and (5)(b) above as taking place at that time.
- (8) In this section “*the original property*” and “*the transferee*” have the same meaning as in section 113A above and “*allowed period*” means the period of three years or such longer period as the Board may allow.
##### 124A
- (1) Where any part of the value transferred by a potentially exempt transfer which proves to be a chargeable transfer would (apart from this section) be reduced in accordance with the preceding provisions of this Chapter, it shall not be so reduced unless the conditions in subsection (3) below are satisfied.
- (2) Where—
- (a) any part of the value transferred by any chargeable transfer, other than a potentially exempt transfer, is reduced in accordance with the preceding provisions of this Chapter, and
- (b) the transfer is made within seven years of the death of the transferor,
then, unless the conditions in subsection (3) below are satisfied, the additional tax chargeable by reason of the death shall be calculated as if the value transferred had not been so reduced.
- (3) The conditions referred to in subsections (1) and (2) above are—
- (a) that the original 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 (in this subsection referred to as “*the relevant period*”) and it is not at the time of the death subject to a binding contract for sale; and
- (b) except in a case falling within paragraph (c) below, that the original property is agricultural property immediately before the death and has been occupied (by the transferee or another) for the purposes of agriculture throughout the relevant period; and
- (c) where the original property consists of shares in or securities of a company, that throughout the relevant period the agricultural property to which section 116 above applied by virtue of section 122(1) above on the chargeable transfer was owned by the company and occupied (by the company or another) for the purposes of agriculture.
- (4) If the transferee has died before the transferor, the reference in subsection (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) If the conditions in subsection (3) above are satisfied only with respect to part of the original property, then,—
- (a) in a case falling within subsection (1) above, only a proportionate part of so much of the value transferred as is attributable to the original property shall be reduced in accordance with the preceding provisions of this Chapter, and
- (b) in a case falling within subsection (2) above, the additional tax shall be calculated as if only a proportionate part of so much of the value transferred as was attributable to the original property had been so reduced.
- (6) Where any shares owned by the transferee immediately before the death in question—
- (a) would under any of the provisions of sections 126 to 136 of the 1992 Act be identified with the original property (or part of it), or
- (b) were issued to him in consideration of the transfer of agricultural property consisting of the original property (or part of it),
his period of ownership of the original property shall be treated as including his period of ownership of the shares.
- (7) This section has effect subject to section 124B below.
- (7A) The provisions of this Chapter for the reduction of value transferred shall be disregarded in any determination for the purposes of this section of whether there is a potentially exempt or chargeable transfer in any case.
- (8) In this section—
- “*the original property*” means the property which, in relation to the chargeable transfer referred to in subsection (1) or subsection (2) above, was either agricultural property to which section 116 above applied or shares or securities of a company owning agricultural property to which that section applied by virtue of section 122(1) above; and
- “*the transferee*” means the person whose property the original property became on that chargeable transfer or, where on the transfer the original property became or remained settled property 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.
##### 124B
- (1) Subject to subsection (2) below, this section applies where—
- (a) the transferee has disposed of all or part of the original property before the death of the transferor; and
- (b) the whole of the consideration received by him for the disposal has been applied by him in acquiring other property (in this section referred to as “*the replacement property*”).
- (2) This section does not apply unless—
- (a) the replacement property is acquired, or a binding contract for its acquisition is entered into, within the allowed period after the disposal of the original property (or, as the case may be, the part concerned); and
- (b) the disposal and acquisition are both made in transactions at arm’s length or on terms such as might be expected to be included in a transaction at arm’s length.
- (3) Where this section applies, the conditions in section 124A(3) above shall be taken to be satisfied in relation to the original property (or, as the case may be, the part concerned) if—
- (a) the replacement property is owned by the transferee immediately before the death of the transferor and is not at that time subject to a binding contract for sale; and
- (b) throughout the period beginning with the date of the chargeable transfer and ending with the disposal, the original property was owned by the transferee and occupied (by the transferee or another) for the purposes of agriculture; and
- (c) throughout the period beginning with the date when the transferee acquired the replacement property and ending with the death, the replacement property was owned by the transferee and occupied (by the transferee or another) for the purposes of agriculture; and
- (d) the replacement property is agricultural property immediately before the death.
- (4) If the transferee has died before the transferor, any reference in subsections (1) to (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) In any case where—
- (a) all or part of the original property has been disposed of before the death of the transferor or is subject to a binding contract for sale at the time of the death, and
- (b) the replacement property is acquired, or a binding contract for its acquisition is entered into, after the death of the transferor but within the allowed period after the disposal of the original property or part, and
- (c) the transferor dies before the transferee,
subsection (3) above shall have effect with the omission of paragraphs (a) and (c), and as if any reference to a time immediately before the death of the transferor were a reference to the time when the replacement property is acquired.
- (6) Section 124A(6) above shall have effect in relation to the replacement property as it has effect in relation to the original property.
- (7) Where a binding contract for the disposal of any property is entered into at any time before the disposal of the property, the disposal shall be regarded for the purposes of subsections (2)(a) and (5)(b) above as taking place at that time.
- (8) In this section “*the original property*” and “*the transferee*” have the same meaning as in section 124A above and “*allowed period*” means the period of three years or such longer period as the Board may allow.
##### 124C
- (1) For the purposes of this Chapter, where any land is in a habitat scheme—
- (a) the land shall be regarded as agricultural land;
- (b) the management of the land in accordance with the requirements of the scheme shall be regarded as agriculture; and
- (c) buildings used in connection with such management shall be regarded as farm buildings.
- (2) For the purposes of this section land is in a habitat scheme at any time if—
- (a) an application for aid under one of the enactments listed in subsection (3) below has been accepted in respect of the land; and
- (b) the undertakings to which the acceptance relates have neither been terminated by the expiry of the period to which they relate nor been treated as terminated.
- (3) Those enactments are—
- (a) regulation 3(1) of the Habitat (Water Fringe) Regulations 1994;
- (b) the Habitat (Former Set-Aside Land) Regulations 1994;
- (c) the Habitat (Salt-Marsh) Regulations 1994;
- (d) the Habitats (Scotland) Regulations 1994, if undertakings in respect of the land have been given under regulation 3(2)(a) of those Regulations;
- (e) the Habitat Improvement Regulations (Northern Ireland) 1995, if an undertaking in respect of the land has been given under regulation 3(1)(a) of those Regulations.
- (4) The Treasury may by order made by statutory instrument amend the list of enactments in subsection (3) above.
- (5) The power to make an order under subsection (4) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
- (6) This section has effect—
- (a) in relation to any transfer of value made on or after 26th November 1996; and
- (b) in relation to transfers of value made before that date, for the purposes of any charge to tax, or to extra tax, which arises by reason of an event occurring on or after 26th November 1996.
##### 151A
- (1) This section applies where a member of a registered pension scheme has an alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death.
- (2) In determining for the purposes of this Act the value of his estate immediately before his death he shall be treated as if he had been beneficially entitled to property with a value equal to the relevant amount.
- (3) The relevant amount is—
- (a) the aggregate of the amount of the sums and the value of the assets forming part of the member's alternatively secured pension fund immediately before his death, less
- (b) the aggregate of the amount of the sums and the value of the assets expended on dependants' benefits within the period of six months beginning with the end of the month in which his death occurs.
- (4) For this purpose sums or assets are expended on dependants' benefits at any time if they (or sums or assets directly or indirectly deriving from them) are at that time—
- (a) applied towards the provision of a dependants' scheme pension for a relevant dependant,
- (b) applied towards the provision of a dependants' annuity for a relevant dependant,
- (c) designated as available for the payment of dependants' unsecured pension to a relevant dependant, or
- (d) designated as available for the payment of dependants' alternatively secured pension to a relevant dependant,
or if the sums (or sums directly or indirectly deriving from the sums or assets) are at that time paid as a charity lump sum death benefit.
- (5) In this section—
- “*alternatively secured pension fund*” has the same meaning as in Part 4 of the Finance Act 2004 (see paragraph 11 of Schedule 28 to that Act);
- “*charity lump sum death benefit*” has the meaning given by paragraph 18 of Schedule 29 to that Act;
- “*dependants' alternatively secured pension*” has the meaning given by paragraph 19 of Schedule 28 to that Act;
- “*dependants' annuity*” has the same meaning as in Part 4 of that Act (see paragraph 17 of that Schedule);
- “*dependants' scheme pension*” has the same meaning as in that Part of that Act (see paragraph 16 of that Schedule);
- “*dependants' unsecured pension*” has the meaning given by paragraph 18 of that Schedule; and
- “*relevant dependant*”, in relation to a member of a registered pension scheme who dies, means a dependant (within the meaning of paragraph 15 of that Schedule) who—is the person's spouse or civil partner immediately before his death; oris financially dependent on the person at that time.
##### 151B
- (1) This section applies where—
- (a) a relevant dependant of a person who, immediately before his death, was a member of a registered pension scheme has a dependant's unsecured pension fund, or a dependant's alternatively secured pension fund, in respect of an arrangement under the pension scheme immediately before his death or immediately before ceasing to be a relevant dependant of the member,
- (b) the member had reached the age of 75 at the time of his death and had an alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death, and
- (c) sums or assets forming part of that fund were designated as available for the payment of dependants' unsecured pension, or dependants' alternatively secured pension, to the relevant dependant within the period of six months beginning with the end of the month in which the member's death occurs.
- (2) Where this section applies tax shall be charged under this section.
- (3) The amount on which tax is charged under this section shall be the aggregate of the amount of the sums and the value of the assets forming part of the dependant's unsecured pension fund, or the dependant's alternatively secured pension fund, in respect of the arrangement immediately before the relevant dependant died or ceased to be a relevant dependant of the member.
- (4) But where tax is chargeable under this section by reason of the death of the relevant dependant, that amount is reduced by so much of sums forming part of the dependant's unsecured pension fund, or the dependant's alternatively secured pension fund, (or sums directly or indirectly deriving from sums or assets forming part of that fund) as are paid to a charity within the period of six months beginning with the end of the month in which his death occurs.
- (5) Tax charged under this section shall be charged at the rate or rates at which it would have been charged on the death of the member if—
- (a) the amount mentioned in subsection (3) above (as reduced under subsection (4) above) had been included in the value transferred by the chargeable transfer made on his death, and
- (b) the amount on which the tax is charged had formed the highest part of that value.
- (6) In this section—
- “*alternatively secured pension fund*” has the same meaning as in Part 4 of the Finance Act 2004 (see paragraph 11 of Schedule 28 to that Act);
- “*dependants' alternatively secured pension*” has the meaning given by paragraph 19 of that Schedule;
- “*dependant's alternatively secured pension fund*” has the same meaning as in that Part of that Act (see paragraph 25 of that Schedule);
- “*dependants' unsecured pension*” has the meaning given by paragraph 18 of that Schedule;
- “*dependant's unsecured pension fund*” has the same meaning as in that Part of that Act (see paragraph 22 of that Schedule); and
- “*relevant dependant*”, in relation to a member of a registered pension scheme who dies, means a dependant (within the meaning of paragraph 15 of that Schedule) who—is the person's spouse or civil partner immediately before his death; oris financially dependent on the person at that time.
##### 151BA
- (1) Tax charged under section 151B above shall be charged at the rate or rates at which it would be charged on the death of the member if the amount mentioned in subsection (3) of that section (as reduced under subsection (4) of that section) (“the taxable amount”) had been included in the aggregate mentioned in section 151A(3)(a) above (but subject as follows).
- (2) The rate or rates at which tax is charged on the taxable amount shall be determined as if the taxable amount had formed the very highest part of the value of the member's estate immediately before the member's death (above any amount which is part of that value apart from this section).
- (3) The rate or rates at which tax is charged on the taxable amount shall be determined on the assumptions that—
- (a) subsection (3)(b) of section 151A above were omitted, and
- (b) the references in subsections (4A) and (5) of that section to the time when tax is charged on the transfer treated as made by the member on death were to the time when tax is charged under this section.
- (4) Subsection (5) below applies where, before the time when the dependant dies or ceases to be a relevant dependant, there have been one or more reductions of tax by virtue of the coming into force of a substitution of a new Table in Schedule 1 to this Act since the member's death.
- (5) The rate or rates at which tax is charged under section 151B above is to be determined as if the new Table effecting the reduction of tax (or the most recent reduction of tax) had been in force at the time of the member's death.
#### Transfers where participators are trustees.
##### 151C
- (1) This section applies where—
- (a) a dependant of a member of a registered pension scheme has a dependant's alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death, and
- (b) section 151B above does not apply.
- (2) In determining for the purposes of this Act the value of the dependant's estate immediately before his death he shall be treated as if he had been beneficially entitled to property with a value equal to the relevant amount.
- (3) The relevant amount is—
- (a) the aggregate of the amount of the sums and the value of the assets forming part of the dependant's alternatively secured pension fund immediately before his death, less
- (b) so much of sums forming part of the dependant's alternatively secured pension fund (or sums directly or indirectly deriving from sums or assets forming part of that fund) as are paid as a charity lump sum death benefit within the period of six months beginning with the end of the month in which his death occurs.
- (4) In this section—
- “*charity lump sum death benefit*” has the meaning given by paragraph 18 of Schedule 29 to the Finance Act 2004;
- “*dependant*” has the meaning given by paragraph 15 of that Schedule 28 to that Act; and
- “*dependant's alternatively secured pension fund*” has the same meaning as in Part 4 of that Act (see paragraph 25 of Schedule 28 to that Act).
##### 151D
- (1) This section applies where—
- (a) a member of a registered pension scheme, or a dependant of such a member, dies after reaching the age of 75;
- (b) immediately before death the member or dependant has under the pension scheme an actual right to payments under a relevant pension or relevant annuity or a prospective right to payments under a relevant pension; and
- (c) at any time after the death a relevant unauthorised payment is made by the pension scheme.
- (2) Where this section applies tax shall be charged under this section.
- (3) The amount on which tax is charged under this section shall be the difference between—
- (a) the amount of the relevant unauthorised payment; and
- (b) the amount of any liability to income tax which has arisen under Part 4 of the Finance Act 2004 by virtue of the making of the relevant unauthorised payment.
- (4) In this section—
- “*dependant*” has the meaning given by paragraph 15 of Schedule 28 to the Finance Act 2004;
- “*dependants' annuity*” has the same meaning as in that Part of that Act (see paragraph 17 of that Schedule);
- “*dependants' scheme pension*” has the same meaning as in that Part of that Act (see paragraph 16 of that Schedule);
- “*lifetime annuity*” has the same meaning as in that Part of that Act (see paragraph 3 of that Schedule);
- “*relevant annuity*” means a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme;
- “*relevant pension*” means a scheme pension or dependants' scheme pension provided by the scheme administrator or as a result of the application of sums or assets held for the purposes of the pension scheme;
- “*relevant unauthorised payment*” means an unauthorised payment (within the meaning of Part 4 of the Finance Act 2004: see section 160(5) of that Act) which—consists of the payment of a lump sum in respect of the dead member or dependant; oris treated as made by virtue of the operation of section 172B of that Act by reason of the death; and
- “*scheme pension*” has the same meaning as in Part 4 of that Act (see paragraph 2 of Schedule 28 to that Act).
##### 151E
- (1) Tax charged under section 151D above shall be charged at the rate or rates at which it would be charged if the amount on which it is charged, and any amount on which tax was previously charged under that section in relation to the death of the member or dependant, were part of the value transferred by the transfer of value made on the death of the member or dependant.
- (2) The rate or rates at which tax is charged on that amount shall be determined as if that amount had formed the highest part of that value.
- (3) Subsection (4) below applies where, before the time when the unauthorised payment is made, there have been one or more reductions of tax by virtue of the coming into force of a substitution of a new Table in Schedule 1 to this Act since the death of the member or dependant.
- (4) The rate or rates at which tax is charged under section 151D above is to be determined as if the new Table effecting the reduction of tax (or the most recent reduction of tax) (“the applicable Table”) had been in force at the time of the death of the member or dependant, but subject to subsections (5) and (8) below.
- (5) The nil-rate band maximum in the applicable Table is to be treated for the purposes of this section as reduced by the used-up percentage of the difference between—
- (a) that nil-rate band maximum, and
- (b) the nil-rate band maximum which was actually in force at the time of the death of the member or dependant.
- (6) For the purposes of subsection (5) above “the used-up percentage” is—
$$100-(ENRBM×100)$where—E is the amount by which M is greater than VT under section 8A(2) above in the case of the member or dependant; andNRBM is the nil-rate band maximum at the time of the death of the member or dependant.$
- (7) The following provisions apply where—
- (a) tax is charged under section 151D above, and
- (b) immediately before the death of the member or dependant, the member or dependant had a spouse or civil partner (“the survivor”).
- (8) If the survivor died before the time when the unauthorised payment is made, tax is charged as if the personal nil-rate band maximum of the member or dependant were appropriately reduced.
- (9) In subsection (8) above—
- “*the personal nil-rate band maximum of the member or dependant*” is the nil rate band maximum in the applicable Table, increased in accordance with section 8A above where that section effected an increase in that nil-rate band maximum in the case of the member or dependant (as a survivor of another deceased person), and
- “*appropriately reduced*” means reduced by the amount (if any) by which the amount on which tax was charged at the rate of nil per cent. on the death of the survivor was increased by reason of the operation of section 8A above by virtue of the position of the member or dependant.
- (10) If the survivor did not die before the time when the unauthorised payment is made, tax is to be charged on the death of the survivor as if the percentage referred to in section 8A(3) above in the case of the member or dependant were that specified in subsection (11) below.
- (11) That percentage is—
$$AEANRBM×100$where—AE is the adjusted excess, that is the amount by which M would be greater than VT under section 8A(2) above in the case of the member or dependant if—(a) the amount on which tax is charged under section 151D above were included in the value transferred by the chargeable value made on the death of the member or dependant, and(b) the nil-rate band maximum at the time of the death were ANRBM; andANRBM is the adjusted nil-rate band maximum, that is the nil-rate band maximum in the applicable Table (as reduced under subsection (5) above where that subsection applies).$
#### Relevant business property.
#### Unauthorised payment where person dies over 75 with pension or annuity
##### 186A
- (1) Where any qualifying investments comprised in a person’s estate immediately before his death are—
- (a) cancelled within the period of twelve months immediately following the date of the death without being replaced by other shares or securities, and
- (b) held, immediately before cancellation, by the appropriate person,
they shall be treated for the purposes of this Chapter as having been sold by the appropriate person for a nominal consideration (one pound) immediately before cancellation.
- (2) Where any qualifying investments are included in the calculation under section 179(1) above by virtue of this section, paragraph (b) of that subsection shall have effect, so far as relating to those investments, with the omission of the words from “or” to the end.
##### 186B
- (1) This section applies to any qualifying investments comprised in a person’s estate immediately before his death in respect of which listing on a recognised stock exchange or dealing on the Unlisted Securities Market is suspended at the end of the period of twelve months immediately following the date of the death (“*the relevant period*”).
- (2) Where—
- (a) any qualifying investments to which this section applies are, at the end of the relevant period, held by the appropriate person, and
- (b) the value on death of those investments exceeds their value at the end of that period,
they shall be treated for the purposes of this Chapter as having been sold by the appropriate person immediately before the end of that period for a price equal to their value at that time.
- (3) Where any qualifying investments are included in the calculation under section 179(1) above by virtue of this section, paragraph (b) of that subsection shall have effect, so far as relating to those investments, with the omission of the words from “or” to the end.
##### 197A
- (1) Where an interest in land—
- (a) is comprised in a person’s estate immediately before his death, and
- (b) is sold by the appropriate person in the fourth year immediately following the date of the death, otherwise than in circumstances in which section 197(1) above has effect,
the interest shall be treated, for the purposes of section 191(1) above, as having been sold within the period of three years immediately following the date of the death.
- (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.
- (4) In applying section 196(1) above, no account shall be taken, for the purposes of paragraph (a) of that subsection, of an interest in relation to which subsection (1) above has effect.
##### 218A
- (1) Where—
- (a) an instrument is made varying any of the dispositions of the property comprised in the estate of a deceased person immediately before his death,
- (b) the instrument contains a statement under subsection (2) of section 142 above, and
- (c) the variation results in additional tax being payable,
the relevant persons (within the meaning of that subsection) shall, within six months after the day on which the instrument is made, deliver a copy of it to the Board and notify them of the amount of the additional tax.
- (2) To the extent that any of the relevant persons comply with the requirements of this section, the others are discharged from the duty to comply with them.
##### 219A
- (1) An officer of the Board may by notice in writing require any person who has delivered, or is liable to deliver, an account under section 216 or 217 above, within such time as may be specified in the notice—
- (a) to produce to the officer such documents as are in the person’s possession or power and as the officer may reasonably require for any of the purposes mentioned in subsection (2) below; and
- (b) to furnish the officer with such accounts or particulars as he may reasonably require for any of those purposes.
- (2) The purposes are—
- (a) enquiring into an account under section 216 or 217 above (including any claim or election included in the account);
- (b) determining whether and, if so, the extent to which such an account is incorrect or incomplete; and
- (c) making a determination for the purposes of a notice under section 221 below.
- (3) To comply with a notice under subsection (1) above, copies of documents may be produced instead of originals; but the copies must be photographic or otherwise by way of facsimile.
- (4) If so required by a notice in writing given by the officer, in the case of any document specified in the notice, the original of any copy produced under subsection (3) above must be produced for inspection by him within such time as may be specified in the notice.
- (5) The time specified in a notice under subsection (1) or (4) above shall not be less than thirty days.
- (6) The officer may take copies of, or make extracts from, any document produced to him under subsection (1) or (4) above.
- (7) A notice under subsection (1) above does not oblige a person to produce documents or furnish accounts or particulars relating to the conduct of any pending appeal by him.
##### 219B
- (1) An appeal may be brought against any requirement imposed by a notice under section 219A(1) above to produce any document or to furnish any accounts or particulars.
- (2) Subject to the following provisions of this section, the provisions of this Act relating to appeals shall have effect in relation to an appeal under this section as they have effect in relation to an appeal against a determination specified in a notice under section 221 below.
- (3) An appeal under this section must be brought within the period of thirty days beginning with the date on which the notice under section 219A(1) above is given.
- (4) On an appeal under this section the Special Commissioners may—
- (a) if it appears to them that the production of the document or the furnishing of the accounts or particulars was reasonably required by the officer of the Board for any of the purposes mentioned in section 219A(2) above, confirm the notice under section 219A(1) above so far as relating to the requirement; or
- (b) if it does not so appear to them, set aside that notice so far as so relating.
- (5) Where, on an appeal under this section, the Special Commissioners confirm the notice under section 219A(1) above so far as relating to any requirement, the notice shall have effect in relation to that requirement as if it had specified thirty days beginning with the determination of the appeal.
- (6) Neither the person required to produce documents or furnish accounts or particulars nor the officer of the Board shall be entitled to appeal under section 225 below against the determination of an appeal under this section.
##### 220A
- (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 the exchange of information foreseeably relevant to the administration or enforcement of—
- (a) the domestic laws of the United Kingdom concerning inheritance tax; and
- (b) the laws of the territory to which the arrangements relate concerning any taxes imposed by the laws of that territory which are of a similar character to that tax or are chargeable on or by reference to death or gifts inter vivos,
and that it is expedient that those arrangements shall have effect, then those arrangements shall have effect notwithstanding anything in any enactment.
- (2) Any Order in Council made under this section revoking an earlier such Order in Council may contain such transitional provisions as appear to Her Majesty to be necessary or expedient.
- (3) An Order under this section shall not be submitted to Her Majesty in Council unless a draft of the Order has been laid before and approved by a resolution of the House of Commons.
- (4) Where any arrangements have effect by virtue of this section, no obligation of 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 in accordance with the arrangements.
- (5) Neither the Board nor an authorised officer of the Board shall disclose any information in pursuance of any arrangements having effect by virtue of this section unless satisfied that the government with which the arrangements are made is bound by, or has undertaken to observe, rules of confidentiality with respect to the information which are not less strict than those applying to it in the United Kingdom.
##### 223A
- (1) This section applies if notice of appeal has been given to HMRC.
- (2) In such a case—
- (a) the appellant may notify HMRC that the appellant requires HMRC to review the matter in question (see section 223B),
- (b) HMRC may notify the appellant of an offer to review the matter in question (see section 223C), or
- (c) the appellant may notify the appeal to the tribunal (see section 223D).
- (3) See sections 223G and 223H for provision about notifying appeals to the tribunal after a review has been required by the appellant or offered by HMRC.
##### 223B
- (1) Subsections (2) and (3) apply if the appellant notifies HMRC that the appellant requires HMRC to review the matter in question.
- (2) HMRC must, within the relevant period, notify the appellant of HMRC's view of the matter in question.
- (3) HMRC must review the matter in question in accordance with section 223E.
- (4) The appellant may not notify HMRC that the appellant requires HMRC to review the matter in question and HMRC shall not be required to conduct a review if—
- (a) the appellant has already given a notification under this section in relation to the matter in question,
- (b) HMRC have given a notification under section 223C in relation to the matter in question, or
- (c) the appellant has notified the appeal to the court under section 222(3), the appropriate Lands tribunal under section 222(4), or the tribunal under section 223D.
- (5) In this section “*relevant period*” means—
- (a) the period of 30 days beginning with the day on which HMRC receive the notification from the appellant, or
- (b) such longer period as is reasonable.
##### 223C
- (1) Subsections (2) to (6) apply if HMRC notify the appellant of an offer to review the matter in question.
- (2) When HMRC notify the appellant of the offer, HMRC must also notify the appellant of HMRC's view of the matter in question.
- (3) If, within the acceptance period, the appellant notifies HMRC of acceptance of the offer, HMRC must review the matter in question in accordance with section 223E.
- (4) If the appellant does not give HMRC such a notification within the acceptance period, HMRC's view of the matter in question shall be conclusive for the purposes of this Act.
- (5) The same consequences shall follow for all purposes as would have followed if, on the date that HMRC gave notice of their view, the tribunal had determined the appeal in accordance with its terms.
- (6) Subsection (4) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under section 223H.
- (7) HMRC may not notify the appellant of an offer to review the matter in question (and, accordingly, HMRC shall not be required to conduct a review) if—
- (a) HMRC have already given a notification under this section in relation to the matter in question,
- (b) the appellant has given a notification under section 223B in relation to the matter in question, or
- (c) the appellant has notified the appeal to the court under section 222(3), the appropriate Lands tribunal under section 222(4) or the tribunal under section 223D.
- (8) In this section “*acceptance period*” means the period of 30 days beginning with the date of the document by which HMRC notify the appellant of the offer to review the matter in question.
##### 223D
- (1) This section applies if notice of appeal has been given to HMRC.
- (2) The appellant may notify the appeal to the tribunal.
- (3) If the appellant notifies the appeal to the tribunal, the tribunal is to decide the matter in question.
- (4) Subsections (2) and (3) do not apply in a case where—
- (a) HMRC have given a notification of their view of the matter in question under section 223B, or
- (b) HMRC have given a notification under section 223C in relation to the matter in question.
- (5) In a case falling within subsection (4)(a) or (b), the appellant may notify the appeal to the tribunal, but only if permitted to do so by section 223G or 223H.
##### 223E
- (1) This section applies if HMRC are required by section 223B or 223C to review the matter in question.
- (2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.
- (3) For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—
- (a) by HMRC in deciding the matter in question, and
- (b) by any person in seeking to resolve disagreement about the matter in question.
- (4) The review must take account of any representations made by the appellant at a stage which gives HMRC a reasonable opportunity to consider them.
- (5) The review may conclude that HMRC's view of the matter in question is to be—
- (a) upheld,
- (b) varied, or
- (c) cancelled.
- (6) HMRC must notify the appellant of the conclusions of the review and their reasoning within—
- (a) the period of 45 days beginning with the relevant day, or
- (b) such other period as may be agreed.
- (7) In subsection (6) “*relevant day*” means—
- (a) in a case where the appellant required the review, the day when HMRC notified the appellant of HMRC's view of the matter in question,
- (b) in a case where HMRC offered the review, the day when HMRC received notification of the appellant's acceptance of the offer.
- (8) Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in subsection (6), the review is to be treated as having concluded that HMRC's view of the matter in question (see sections 223B(2) and 223C(2)) is upheld.
- (9) If subsection (8) applies, HMRC must notify the appellant of the conclusion which the review is treated as having reached.
#### Overseas pensions.
##### 223F
- (1) This section applies if HMRC give notice of the conclusions of a review (see section 223E(6) and (9)).
- (2) The conclusions of the review shall be conclusive for the purposes of this Act.
- (3) Subsections (2) and (3) do not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under section 223G.
##### 223G
- (1) This section applies if—
- (a) HMRC have given notice of the conclusions of a review in accordance with section 223E, or
- (b) the period specified in section 223E(6) has ended and HMRC have not given notice of the conclusions of the review.
- (2) The appellant may notify the appeal to the tribunal within the post-review period.
- (3) If the post-review period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.
- (4) If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question.
- (5) The appellant may not notify the appeal to the tribunal under this section if the appeal has been notified to the court under section 222(3) or the appropriate Lands tribunal under section 222(4).
- (6) In this section “*post-review period*” means—
- (a) in a case falling within subsection (1)(a), the period of 30 days beginning with the date of the document in which HMRC give notice of the conclusions of the review in accordance with section 223E(6), or
- (b) in a case falling within subsection (1)(b), the period that—
- (i) begins with the day following the last day of the period specified in section 223E(6), and
- (ii) ends 30 days after the date of the document in which HMRC give notice of the conclusion of the review in accordance with section 223E(9).
##### 223H
- (1) This section applies if—
- (a) HMRC have offered to review the matter in question (see section 223C), and
- (b) the appellant has not accepted the offer.
- (2) The appellant may notify the appeal to the tribunal within the acceptance period.
- (3) But if the acceptance period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.
- (4) If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question.
- (5) The appellant may not notify the appeal to the tribunal under this section if the appeal has been notified to the court under section 222(3) or the appropriate Lands tribunal under section 222(4).
- (6) In this section “*acceptance period*” has the same meaning as in section 223C.
##### 223I
- (1) In sections 223A to 223H—
- (a) “*matter in question*” means the matter to which an appeal relates;
- (b) a reference to a notification is a reference to a notification in writing.
- (2) In sections 223A to 223H, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—
- (a) notification of HMRC's view under section 223B(2);
- (b) notification by HMRC of an offer of review (and of their view of the matter) under section 223C;
- (c) notification of the conclusions of a review under section 223E(6); and
- (d) notification of the conclusions of a review under section 223E(9).
- (3) But if a notification falling within any of the paragraphs of subsection (2) is given to the appellant, a copy of the notification may also be given to a person acting on behalf of the appellant.
##### 225A
- (1) Section 46A of the Taxes Management Act 1970 (regulations about jurisdiction of General and Special Commissioners) shall apply in relation to appeals or other proceedings under this Part of this Act as it applies in relation to appeals or other proceedings under the Taxes Acts, but with the omission from subsection (1) of—
- (a) paragraphs (a) and (b), and
- (b) the words “General Commissioners or” in paragraph (c).
- (2) Sections 56B, 56C and 56D of the Taxes Management Act 1970 (regulations about practice and procedure of General and Special Commissioners) shall apply in relation to appeals or other proceedings under this Part of this Act as they apply in relation to appeals or other proceedings under the Taxes Acts.
- (3) In this section, “*the Taxes Acts*” has the meaning given in section 118(1) of the Taxes Management Act 1970.
##### 240A
- (1) This section applies for the purposes of section 240.
- (2) A loss of tax is brought about carelessly by a person if the person fails to take reasonable care to avoid bringing about that loss.
- (3) Where—
- (a) information is provided to Her Majesty's Revenue and Customs,
- (b) the person who provided the information, or the person on whose behalf the information was provided, discovers some time later that the information was inaccurate, and
- (c) that person fails to take reasonable steps to inform Her Majesty's Revenue and Customs,
any loss of tax brought about by the inaccuracy is to be treated as having been brought about carelessly by that person.
- (4) References to a loss of tax brought about deliberately by a person include a loss of tax brought about as a result of a deliberate inaccuracy in a document given to Her Majesty's Revenue and Customs by or on behalf of that person.
##### 245A
- (1) A person who fails to make a return under section 218 above shall be liable—
- (a) to a penalty not exceeding £300; and
- (b) to a further penalty not exceeding £60 for every day after the day on which the failure has been declared by a court or the Special Commissioners and before the day on which the return is made.
- (1A) A person who fails to comply with the requirements of section 218A above shall be liable—
- (a) to a penalty not exceeding £100; and
- (b) to a further penalty not exceeding £60 for every day after the day on which the failure has been declared by a court or the Special Commissioners and before the day on which the account is delivered.
- (3) If—
- (a) proceedings in which the failure could be declared are not commenced before the end of the relevant period, and
- (b) the taxpayer has not delivered the account by the end of that period,
he shall be liable to a further penalty not exceeding £100.
- (4) In subsection (3) above “*the relevant period*” means the period of six months beginning immediately after the end of the period given by section 216(6) or (7) or section 217 above (whichever is applicable).
- (5) If the taxpayer proves that his liability to tax does not exceed a particular amount, the penalty under subsection (2)(a) above, together with any penalty under subsection (3) above, shall not exceed that amount.
- (6) A person shall not be liable to a penalty under subsection (2)(b) above if he delivers the account required by section 216 or 217 before proceedings in which the failure could be declared are commenced.
- (7) A person who has a reasonable excuse for failing to deliver an account shall not be liable by reason of that failure to a penalty under this section, unless he fails to deliver the account without unreasonable delay after the excuse has ceased.
#### Failure to appear before Special Commissioners, etc.
##### 246
#### Provision of incorrect information
##### 247
- (1) If any person liable for any tax on the value transferred by a chargeable transfer fraudulently or negligently delivers, furnishes or produces to the Board any incorrect account, information or document, he shall be liable, in the case of fraud, to a penalty not exceeding the aggregate of £3,000 and the difference mentioned in subsection (2) below and, in the case of negligence, to a penalty not exceeding the aggregate of £1,500 and that difference.
- (2) The difference referred to in subsection (1) above is the amount by which the tax for which that person is liable exceeds what would be the amount of that tax if the facts were as shown in the account, information or document.
- (3) Any person not liable for tax on the value transferred by a chargeable transfer who fraudulently or negligently furnishes or produces to the Board any incorrect information or document in connection with the transfer shall be liable, in the case of fraud, to a penalty not exceeding £3,000 and, in the case of negligence, to a penalty not exceeding £1,500.
- (4) Any person who assists in or induces the delivery, furnishing or production in pursuance of this Part of this Act of any account, information or document which he knows to be incorrect shall be liable to a penalty not exceeding £3,000 .
#### Failure to remedy errors
##### 248
- (1) If after any account, information or document has been delivered, furnished or produced by any person without fraud or negligence it comes to his notice that it was incorrect in any material respect it shall be treated for the purposes of section 247 above as having been negligently delivered, furnished or produced unless the error is remedied without unreasonable delay.
- (2) If after any account, information or document has been delivered, furnished or produced by any person in pursuance of this Part of this Act it comes to the notice of any other person that it contains an error whereby tax for which that other person is liable has been or might be underpaid, that other person shall inform the Board of the error; and if he fails to do so without unreasonable delay he shall be liable to the penalty to which he would be liable under section 247 above if the account, information or document had been delivered, furnished or produced by him and the case were one of negligence.
#### Recovery of penalties
##### 249
- (1) All proceedings for the recovery of penalties under this Part of this Act shall be commenced by the Board, or in Scotland, by the Board or the Lord Advocate.
- (2) Any such proceedings may be commenced either before the Special Commissioners or in the High Court or the Court of Session and shall, if brought in the High Court, be deemed to be civil proceedings by the Crown within the meaning of Part II of the Crown Proceedings Act 1947 or, as the case may be, that Part as for the time being in force in Northern Ireland.
- (3) Where any such proceedings are brought before the Special Commissioners, an appeal shall lie from their decision to the High Court or, as the case may be, the Court of Session—
- (a) by either party, on a question of law, and
- (b) by the defendant (or, in Scotland, defender) against the amount of any penalty awarded; and on appeal under paragraph (b) above the Court may either confirm the decision or reduce or increase the sum awarded.
- (4) Proceedings under this section before the Special Commissioners shall be by way of information in writing made to them, and upon summons issued by them to the defendant (or defender) to appear before them at a time and place stated in the summons, and they shall hear and determine each case in a summary way.
- (5) References in this section to the Court of Session are references to that Court as the Court of Exchequer in Scotland.
#### Time limit for recovery
##### 250
- (1) No proceedings for the recovery of a penalty under this Part of this Act shall be brought after the end of the period of three years beginning with the date on which the amount of the tax properly payable in respect of the chargeable transfer concerned was notified by the Board to the person or one of the persons liable for the tax or any part of it.
- (2) Where the person who has incurred any such penalty has died, any proceedings for the recovery of the penalty which have been or could have been commenced against him may be continued or commenced against his personal representatives, and any penalty awarded in proceedings so continued or commenced shall be a debt due from and payable out of his estate.
#### Summary award
##### 251
- (1) An appeal shall lie to the High Court or the Court of Session against the summary determination by the Special Commissioners of a penalty under regulation 24 of the Special Commissioners (Jurisdiction and Procedure) Regulations 1994 in proceedings relating to inheritance tax.
- (2) On such an appeal the Court may either confirm or reverse the determination of the Special Commissioners or reduce or increase the sum determined.
#### Effect of award by Special Commissioners
##### 252
Any penalty awarded by the Special Commisioners shall be recoverable by the Board as a debt due to the Crown.
#### Mitigation of penalties
##### 253
The Board may in their discretion mitigate any penalty, or stay or compound any proceedings for recovery of any penalty, and may also, after judgment, further mitigate or entirely remit the penalty.
### Miscellaneous
#### Evidence
##### 254
- (1) For the purposes of the preceding provisions of this Part of this Act, a notice under section 221 above specifying any determination which can no longer be varied or quashed on appeal shall be sufficient evidence of the matters determined.
- (2) In any proceedings for the recovery of tax or interest on tax, a certificate by an officer of the Board—
- (a) that the tax or interest is due, or
- (b) that, to the best of his knowledge and belief, it has not been paid,
shall be sufficient evidence that the sum mentioned in the certificate is due or, as the case may be, unpaid; and a document purporting to be such a certificate shall be deemed to be such a certificate unless the contrary is proved.
#### Determination of questions on previous view of law
##### 255
Where any payment has been made and accepted in satisfaction of any liability for tax and on a view of the law then generally received or adopted in practice, any question whether too little or too much has been paid or what was the right amount of tax payable shall be determined on the same view, notwithstanding that it appears from a subsequent legal decision or otherwise that the view was or may have been wrong.
#### Regulations about accounts, etc.
##### 256
- (1) The Board may make regulations—
- (a) dispensing with the delivery of accounts under section 216 above in such cases as may be specified in the regulations;
- (b) discharging, subject to such restrictions as may be so specified, property from an Inland Revenue charge and persons from further claims for tax in cases other than those mentioned in section 239 above;
- (c) requiring information to be furnished to the Board, in such circumstances as may be so specified, by persons who have not delivered accounts under section 216 above or who have produced documents other than an account or inventory in pursuance of arrangements made under the enactments mentioned in subsection (2) below;
- (d) modifying section 264(8) below in cases where the delivery of an account has been dispensed with under the regulations.
- (2) The enactments referred to in subsection (1)(c) above are section 109(2) of the Supreme Court Act 1981, the proviso to section 42 of the Probate and Legacy Duties Act 1808 and Article 20 of the Administration of Estates (Northern Ireland) Order 1979.
- (3) Regulations under this section may contain such supplementary or incidental provisions as the Board think fit.
- (4) The power to make regulations under this section shall be exercisable by statutory instrument, which shall be subject to annulment in pursuance of a resolution of the House of Commons.
#### Form etc. of accounts
##### 257
- (1) All accounts and other documents required for the purposes of this Act shall be in such form and shall contain such particulars as may be prescribed by the Board.
- (2) All accounts to be delivered to the Board under this Act shall be supported by such books, papers and other documents, and verified (whether on oath or otherwise) in such manner, as the Board may require.
- (3) For the purposes of this Act, an account delivered to a probate registry pursuant to arrangements made between the President of the Family Division and the Board or delivered to the Probate and Matrimonial Office in Northern Ireland pursuant to arrangements made between the Lord Chancellor and the Board shall be treated as an account delivered to the Board.
#### Service of documents
##### 258
A notice or other document which is to be served on a person under this Act may be delivered to him or left at his usual or last known place of residence or served by post, addressed to him at his usual or last known place of residence or his place of business or employment.
#### Inspection of records
##### 259
Section 16 of the Stamp Act 1891, section 56 of the Finance Act 1946 and section 27 of the Finance (No.2) Act (Northern Ireland) 1946 (inspection of public records and records of unit trusts) shall apply in relation to inheritance tax as they apply in relation to stamp duties.
#### Inland Revenue Regulation Act 1890
##### 260
Sections 21, 22 and 35 of the Inland Revenue Regulation Act 1890 (proceedings for fines, etc.) shall not apply in relation to inheritance tax.
#### Scotland: inventories
##### 261
In the application of this Part of this Act to Scotland, references to an account required to be delivered to the Board by the personal representatives of a deceased person, however expressed, shall be construed as references to such an inventory or additional inventory as is mentioned in section 38 of the Probate and Legacy Duties Act 1808 which has been duly exhibited as required by that section.
## PART IX — MISCELLANEOUS AND SUPPLEMENTARY
### Miscellaneous
#### Tax chargeable in certain cases of future payments, etc.
##### 262
- (1) Where a disposition made for a consideration in money or money’s worth is a transfer of value and any payments made or assets transferred by the transferor in pursuance of the disposition are made or transferred more than one year after the disposition is made, tax (if any) shall be charged as if—
- (a) any payment made or asset transferred in pursuance of the disposition were made or transferred in pursuance of a separate disposition made, without consideration, at the time the payment is made or the asset is transferred, and
- (b) the amount of the payment made or the value of the asset transferred in pursuance of each of those separate dispositions were the chargeable portion of the payment or asset.
- (2) For the purposes of this section the chargeable portion of any payment made or any asset transferred at any time shall be such portion of its value at that time as is found by applying to it the fraction of which—
- (a) the numerator is the value actually transferred by the disposition first mentioned in subsection (1) above (calculated as if no tax were payable on it), and
- (b) the denominator is the value, at the time of that disposition, of the aggregate of the payments made or to be made and assets transferred or to be transferred by the transferor in pursuance of it.
#### Annuity purchased in conjunction with life policy
##### 263
- (1) Where—
- (a) a policy of life insurance is issued in respect of an insurance made after 26th March 1974 or is after that date varied or substituted for an earlier policy, and
- (b) at the time the insurance is made or at any earlier or later date an annuity on the life of the insured is purchased, and
- (c) the benefit of the policy is vested in a person other than the person who purchased the annuity,
then, unless it is shown that the purchase of the annuity and the making of the insurance (or, as the case may be, the substitution or variation) were not associated operations, the person who purchased the annuity shall be treated as having made a transfer of value by a disposition made at the time the benefit of the policy became so vested (to the exclusion of any transfer of value which, apart from this section, he might have made as a result of the vesting, or of the purchase and the vesting being associated operations).
- (2) The value transferred by that transfer of value shall be equal to whichever of the following is less, namely,—
- (a) the aggregate of—
- (i) the value of the consideration given for the annuity, and
- (ii) any premium paid or other consideration given under the policy on or before the transfer; and
- (b) the value of the greatest benefit capable of being conferred at any time by the policy, calculated as if that time were the date of the transfer.
- (3) The preceding provisions of this section shall apply, with the necessary modifications, where a contract for an annuity payable on a person’s death is after 26th March 1974 made or varied or substituted for or replaced by such a contract or a policy of life insurance as they apply where a policy of life insurance is issued, varied or substituted as mentioned in subsection (1) above.
#### Transfers reported late
##### 264
- (1) This section has effect where a person has made a transfer of value (“the earlier transfer”) which—
- (a) is not notified to the Board in an account under section 216 above or by information furnished under section 219 above before the expiration of the period specified in section 216 for the delivery of accounts, and
- (b) is not discovered until after payment has been accepted by the Board in full satisfaction of the tax on the value transferred by another transfer of value (“the later transfer”) made by him on or after the day on which he made the earlier transfer.
- (2) Where the earlier transfer is made in the period of ten years ending with the date of the later transfer there shall be charged on the value transferred by the earlier transfer, in addition to any tax chargeable on it apart from this section, an amount of tax equal to the difference, if any, between—
- (a) the tax which, having regard to the earlier transfer, was properly chargeable on the value transferred by the later transfer, and
- (b) the payment accepted by the Board in full satisfaction of the tax chargeable on that value;
and any such difference shall not be chargeable on the value transferred by the later transfer.
- (3) Where in the period mentioned in subsection (2) above there have been two or more earlier transfers the reference in paragraph (a) of that subsection to the earlier transfer shall be construed as a reference to both or all of those transfers, but the amount of tax chargeable under that subsection in respect of each of them shall, subject to subsection (4) below, be reduced in the proportion which the value transferred by it bears to the aggregate of the values transferred by it and the other or others.
- (4) Where the earlier transfers mentioned in subsection (3) above include a settled transfer, that is to say, a transfer in the case of which an amount in full satisfaction of the tax chargeable in respect of it under subsection (2) above has been paid to and accepted by the Board before the discovery of one or more of the other earlier transfers,—
- (a) no further tax shall be chargeable under subsection (2) above in respect of the settled transfer in consequence of regard being had under paragraph (a) of that subsection to the subsequently discovered transfer or transfers;
- (b) the amount so paid and accepted shall reduce the amount chargeable under subsection (2) above in respect of the subsequently discovered transfer or transfers; and
- (c) if there are two or more subsequently discovered transfers, the value transferred by the settled transfer shall be disregarded in calculating under subsection (3) above the reduction in the amount of tax chargeable in respect of each of them.
- (5) Where the later transfer referred to in subsection (2) above is itself an earlier transfer in relation to another later transfer the references in paragraphs (a) and (b) of that subsection to tax chargeable on the value transferred by it are references to tax so chargeable apart from this section.
- (6) Subsection (2) above shall not increase the amount in respect of which interest is payable under section 233 above in relation to the earlier transfer in respect of any period falling before the expiration of six months from the date on which it was discovered.
- (7) Where, apart from this subsection, the earlier transfer would be wholly or partly exempt by reason of some or all of the value transferred by it falling within a limit applicable to an exemption, then, if tax has been accepted as mentioned in subsection (1)(b) above on the basis that the later transfer is partly exempt by reason of part of the value thereby transferred falling within that limit—
- (a) tax shall not be chargeable on that part of the value transferred by the later transfer, but
- (b) a corresponding part of the value transferred by the earlier transfer shall be treated as falling outside that limit.
- (8) Subsection (1)(b) above shall apply to a transfer in respect of which no tax is chargeable because the rate of tax applicable under section 7 above is nil as if payment had been accepted when the transfer was notified in an account under section 216 above, and subsection (2)(b) above shall apply in relation to any such transfer as if the amount of the payment were nil.
- (9) For the purposes of this section a transfer is discovered—
- (a) if it is notified under the provisions mentioned in subsection (1)(a) above after the expiration of the period there mentioned, on the date on which it is so notified;
- (b) in any other case, on the date on which the Board give notice of a determination in respect of the transfer under section 221 above.
#### Chargeable transfers affecting more than one property
##### 265
Where the value transferred by a chargeable transfer is determined by reference to the values of more than one property the tax chargeable on the value transferred shall be attributed to the respective values in the proportions which they bear to their aggregate, but subject to section 54B(3) above and to any provision reducing the amount of tax attributable to the value of any particular property.
#### More than one chargeable transfer on one day
##### 266
- (1) Where the value transferred by more than one chargeable transfer made by the same person on the same day depends on the order in which the transfers are made, they shall be treated as made in the order which results in the lowest value chargeable.
- (2) Subject to subsection (1) above, the rate at which the tax is charged on the values transferred by two or more chargeable transfers made by the same person on the same day shall be the effective rate at which tax would have been charged if those transfers had been a single chargeable transfer of the same total value.
- (3) The chargeable transfers referred to in subsections (1) and (2) above do not include a transfer made on the death of the transferor.
- (4) Chargeable transfers under Chapter III of Part III of this Act shall if they relate to the same settlement be treated for the purposes of subsections (1) and (2) above as made by the same person.
#### Persons treated as domiciled in United Kingdom
##### 267
- (1) A person not domiciled in the United Kingdom at any time (in this section referred to as “the relevant time”) shall be treated for the purposes of this Act as domiciled in the United Kingdom (and not elsewhere) at the relevant time if—
- (a) he was domiciled in the United Kingdom within the three years immediately preceding the relevant time, or
- (b) he was resident in the United Kingdom in not less than seventeen of the twenty years of assessment ending with the year of assessment in which the relevant time falls.
- (2) Subsection (1) above shall not apply for the purposes of section 6(2) or (3) or 48(4) above and shall not affect the interpretation of any such provision as is mentioned in section 158(6) above.
- (3) Paragraph (a) of subsection (1) above shall not apply in relation to a person who (apart from this section) has not been domiciled in the United Kingdom at any time since 9th December 1974, and paragraph (b) of that subsection shall not apply in relation to a person who has not been resident there at any time since that date; and that subsection shall be disregarded—
- (a) in determining whether settled property which became comprised in the settlement on or before that date is excluded property,
- (b) in determining the settlor’s domicile for the purposes of section 65(8) above in relation to settled property which became comprised in the settlement on or before that date, and
- (c) in determining for the purposes of section 65(8) above whether the condition in section 82(3) above is satisfied in relation to such settled property.
- (4) For the purposes of this section the question whether a person was resident in the United Kingdom in any year of assessment shall be determined as for the purposes of income tax . . ..
### Interpretation
#### Associated operations
##### 268
- (1) In this Act “*associated operations*” means, subject to subsection (2) below, any two or more operations of any kind, being—
- (a) operations which affect the same property, or one of which affects some property and the other or others of which affect property which represents, whether directly or indirectly, that property, or income arising from that property, or any property representing accumulations of any such income, or
- (b) any two operations of which one is effected with reference to the other, or with a view to enabling the other to be effected or facilitating its being effected, and any further operation having a like relation to any of those two, and so on.
whether those operations are effected by the same person or different persons, and whether or not they are simultaneous; and “*operation*” includes an omission.
- (2) The granting of a lease for full consideration in money or money’s worth shall not be taken to be associated with any operation effected more than three years after the grant, and no operation effected on or after 27th March 1974 shall be taken to be associated with an operation effected before that date.
- (3) Where a transfer of value is made by associated operations carried out at different times it shall be treated as made at the time of the last of them; but where any one or more of the earlier operations also constitute a transfer of value made by the same transferor, the value transferred by the earlier operations shall be treated as reducing the value transferred by all the operations taken together, except to the extent that the transfer constituted by the earlier operations but not that made by all the operations taken together is exempt under section 18 above.
#### Control of company
##### 269
- (1) For the purposes of this Act a person has control of a company at any time if he then has the control of powers of voting on all questions affecting the company as a whole which if exercised would yield a majority of the votes capable of being exercised on them.
- (2) For the purposes of this Act shares or securities shall be deemed to give a person control of a company if, together with any shares or securities which are related property within the meaning of section 161 above, they would be sufficient to give him control of the company (as defined in subsection (1) above).
- (3) Where shares or securities are comprised in a settlement, any powers of voting which they give to the trustees of the settlement shall for the purposes of subsection (1) above be deemed to be given to the person beneficially entitled in possession to the shares or securities (except in a case where no individual is so entitled).
- (4) Where a company has shares or securities of any class giving powers of voting limited to either or both of—
- (a) the question of winding up the company, and
- (b) any question primarily affecting shares or securities of that class,
the reference in subsection (1) above to all questions affecting the company as a whole shall have effect as a reference to all such questions except any in relation to which those powers are capable of being exercised.
#### Connected persons
##### 270
For the purposes of this Act any question whether a person is connected with another shall be determined as, for the purposes of the 1992 Act, it falls to be determined under section 286 of that Act, but as if in that section “*relative*” included uncle, aunt, nephew and niece and “*settlement*”, “*settlor*” and “*trustee*” had the same meanings as in this Act.
#### Property of corporations sole
##### 271
References in this Act (except section 59) to property to which a person is beneficially entitled do not include references to property to which a person is entitled as a corporation sole.
#### General interpretation
##### 272
In this Act, except where the context otherwise requires,—
- “*amount*” includes value;
- “*authorised unit trust*” means a scheme which is a unit trust scheme for the purposes of section 469 of the Taxes Act 1988 (see subsection (7) of that section) and in the case of which an order under section 243 of the Financial Services and Markets Act 2000 is in force;
- “*barrister*” includes a member of the Faculty of Advocates;
- “*the Board*” means the Commissioners of Inland Revenue;
- “*charity*” and “*charitable*” have the same meanings as in the Income Tax Acts;
- “*conditionally exempt transfer*” shall be construed in accordance with section 30(2) above;
- “*disposition*” includes a disposition effected by associated operations;
- “*estate*” shall be construed in accordance with sections 5, 55 and 151(4) above;
- “*estate duty*” includes estate duty under the law of Northern Ireland;
- “*excluded property*” shall be construed in accordance with sections 6 and 48 above;
- “*Government department*” includes a Northern Ireland department;
- “*heritable security*” means any security capable of being constituted over any interest in land by disposition or assignation of that interest in security of any debt and of being recorded in the General Register of Sasines;
- “*incumbrance*” includes any heritable security, or other debt or payment secured upon heritage;
- “*Inland Revenue charge*” means a charge imposed by virtue of section 237 above;
- “*land*” does not include any estate interest or right by way of mortgage or other security;
- “*local authority*” has the meaning given by section 842A of the Taxes Act 1988;
- “*mortgage*” includes a heritable security and a security constituted over any interest in movable property;
- “*open-ended investment company*” means an open-ended investment company within the meaning given by section 236 of the Financial Services and Markets Act 2000 which is incorporated in the United Kingdom;
- “*personal representatives*” includes any person by whom or on whose behalf an application for a grant of administration or for the resealing of a grant made outside the United Kingdom is made, and any such person as mentioned in section 199(4)(a) above;
- “*property*” includes rights and interests of any description but does not include a settlement power ;
- “*purchaser*” means a purchaser in good faith for consideration in money or money’s worth other than a nominal consideration and includes a lessee, mortgagee or other person who for such consideration acquires an interest in the property in question;
- “*quoted*”, in relation to any shares or securities, means listed on a recognised stock exchange or dealt in on the Unlisted Securities Market and “*unquoted*”, in relation to any shares or securities, means neither so listed nor so dealt in;
- “*reversionary interest*” has the meaning given by section 47 above;
- “*settlement power*” has the meaning given by section 47A above;
- “*settlement*” and “*settled property*” shall be construed in accordance with section 43 above;
- “*settlor*” shall be construed in accordance with section 44 above;
- “*Special Commissioners*” has the same meaning as in the Taxes Management Act 1970;
- “*tax*” means inheritance tax;
- “*the Taxes Act 1970*” means the Income and Corporation Taxes Act 1970;
- “*The Taxes Act 1988*” means the Income and Corporation Taxes Act 1988;
- “*trustee*” shall be construed in accordance with section 45 above.
- and
- “*the 1992 Act*” means the Taxation of Chargeable Gains Act 1992.
### Supplementary
#### Transition from estate duty
##### 273
Schedule 6 to this Act shall have effect.
#### Commencement
##### 274
- (1) This Act shall come into force on 1st January 1985, but shall not apply to transfers of value made before that date or to other events before that date on which capital transfer tax is chargeable or would be chargeable but for an exemption, exception or relief.
- (2) Subsection (1) above shall have effect subject to section 275 below, to Schedule 7 to this Act and to any other provision to the contrary.
#### Continuity, and construction of references to old and new law
##### 275
- (1) The continuity of the operation of the law relating to capital transfer tax shall not be affected by the substitution of this Act for the repealed enactments.
- (2) Any reference, whether express or implied, in any enactment, instrument or document (including this Act and any enactment amended by Schedule 8 to this Act) to, or to things done or falling to be done under or for the purposes of, any provision of this Act shall, if and so far as the nature of the reference permits, be construed as including, in relation to the times, circumstances or purposes in relation to which the corresponding provision in the repealed enactments has or had effect, a reference to, or as the case may be, to things done or falling to be done under or for the purposes of, that corresponding provision.
- (3) Any reference, whether express or implied, in any enactment, instrument or document (including the repealed enactments and enactments, instruments and documents passed or made after the passing of this Act) to, or to things done or falling to be done under or for the purposes of, any of the repealed enactments shall, if and so far as the nature of the reference permits, be construed as including, in relation to the times, circumstances or purposes in relation to which the corresponding provision of this Act has effect, a reference to, or as the case may be, to things done or falling to be done under or for the purposes of, that corresponding provision.
- (4) Subsection (2) above shall have effect without prejudice to section 17(2) of the Interpretation Act 1978.
- (5) In this section “*the repealed enactments*” means the enactments repealed by this Act.
#### Consequential amendments
##### 276
Schedule 8 to this Act shall have effect.
#### Repeals
##### 277
The enactments mentioned in Schedule 9 to this Act are hereby repealed to the extent specified in the third column of that Schedule.
#### Short title
##### 278
This Act may be cited as the Inheritance Tax Act 1984.
## SCHEDULE 1
## SCHEDULE 2
### Interpretation
##### 1
In this Schedule—
- (a) references to a reduction are to a reduction of tax by the substitution of a new Table in Schedule 1 to this Act, and
- (b) references to something happening before or after a reduction are to its happening before or, as the case may be, on or after the date on which the Table giving effect to the reduction comes into force.
### Death within three years of chargeable transfer
##### 2
Where a person who has made a chargeable transfer other than a potentially exempt transfer) before a reduction dies after that reduction (or after that and one or more subsequent reductions) and within seven years of the transfer, additional tax shall be chargeable by reason of his death only if, and to the extent that, it would have been so chargeable if . . . the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had applied to that transfer.
### Settlement without interest in possession
##### 3
Where tax is chargeable under section 65 of this Act on any occasion after a reduction and the rate at which it is charged is determined under section 69 by reference to the rate that was (or would have been) charged under section 64 on an occasion before that reduction (or before that and one or more other reductions), the rate charged on the later occasion shall be determined as if . . . the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had been in force on the earlier occasion.
### Disposal of trees etc. following exemption on death
##### 4
Where the value of any trees or underwood has been left out of account under Chapter III of Part V of this Act in determining the value transferred by the chargeable transfer made on a death before a reduction and tax is chargeable under section 126 on a disposal of the trees or underwood after that reduction (or after that and one or more subsequent reductions) the rate or rates mentioned in section 128 shall be determined as if . . . the Tables in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had applied to that transfer.
### Conditionally exempt transfers
##### 5
Where tax is chargeable under section 32 or 32A of this Act by reason of a chargeable event occurring after a reduction and the rate or rates at which it is charged fall to be determined under the provisions of section 33(1)(b)(ii) by reference to a death which occurred before that reduction (or before that and one or more other reductions) those provisions shall apply as if the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had been in force at the time of the death.
### Maintenance funds for historic buildings
##### 6
Where tax is chargeable under paragraph 8 of Schedule 4 to this Act on any occasion after a reduction and the rate at which it is charged falls to be determined under paragraph 14 of that Schedule by reference to a death which occurred before that reduction (or before that and one or more other reductions) paragraph 14 shall apply as if the Table in Schedule 1 as substituted by that reduction (or by the most recent of those reductions) had been in force at the time of the death.
### Mutual transfers
##### 7
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## SCHEDULE 3
## SCHEDULE 4
## PART I — TREASURY DIRECTIONS
### Giving of directions
##### 1
- (1) If the conditions mentioned in paragraph 2(1) below are fulfilled in respect of settled property, the Treasury shall, on a claim made for the purpose, give a direction under this paragraph in respect of the property.
- (2) The Treasury may give a direction under this paragraph in respect of property proposed to be comprised in a settlement or to be held on particular trusts in any case where, if the property were already so comprised or held, they would be obliged to give the direction.
- (3) Property comprised in a settlement by virtue of a transfer of value made before the coming into force of section 94 of the Finance Act 1982 and exempt under section 84 of the Finance Act 1976 shall be treated as property in respect of which a direction has been given under this paragraph.
### Conditions
##### 2
- (1) The conditions referred to in paragraph 1 above are—
- (a) that the Treasury are satisfied—
- (i) that the trusts on which the property is held comply with the requirements mentioned in paragraph 3 below, and
- (ii) that the property is of a character and amount appropriate for the purposes of those trusts; and
- (b) that the trustees—
- (i) are approved by the Treasury,
- (ii) include a trust corporation, a solicitor, an accountant
or a member of such other professional body as the Treasury may allow in the case of the property concerned, and
- (iii) are, at the time the direction is given, resident in the United Kingdom.
- (2) For the purposes of this paragraph trustees shall be regarded as resident in the United Kingdom if—
- (a) the general administration of the trusts is ordinarily carried on in the United Kingdom, and
- (b) the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are resident in the United Kingdom;
and where a trustee is a corporation, the question whether the trustee is resident in the United Kingdom shall, for the purposes of paragraph (b) above, be determined as for the purposes of corporation tax.
- (3) In this paragraph—
- “*accountant*” means a member of an incorporated society of accountants;
- “*trust corporation*” means a person that is a trust corporation for the purposes of the Law of Property Act 1925 or for the purposes of Article 9 of the Administration of Estates (Northern Ireland) Order 1979.
##### 3
- (1) The requirements referred to in paragraph 2(1)(a)(i) above are (subject to paragraph 4 below)—
- (a) that none of the property held on the trusts can at any time in the period of six years beginning with the date on which it became so held be applied otherwise than—
- (i) for the maintenance, repair or preservation of, or making provision for public access to, property which is for the time being qualifying property, for the maintenance, repair or preservation of property held on the trusts or for such improvement of property so held as is reasonable having regard to the purposes of the trusts, or for defraying the expenses of the trustees in relation to the property so held;
- (ii) as respects income not so applied and not accumulated, for the benefit of a body within Schedule 3 to this Act or of a qualifying charity; and
- (b) that none of the property can, on ceasing to be held on the trusts at any time in that period or, if the settlor dies in that period, at any time before his death, devolve otherwise than on any such body or charity; and
- (c) that income arising from property held on the trusts cannot at any time after the end of that period be applied except as mentioned in paragraph (a)(i) or (ii) above.
- (2) Property is qualifying property for the purposes of subparagraph (1) above if—
- (a) it has been designated under section 34(1) of the Finance Act 1975 or section 77(1)(b), (c), (d) or (e) of the Finance Act 1976 or section 31(1)(b), (c), (d) or (e) of this Act; and
- (b) the requisite undertaking has been given with respect to it under section 34 of the Finance Act 1975 or under section 76, 78(5)(b) or 82(3) of the Finance Act 1976 or under section 30, 32(5)(b), 32A(6), (8)(b) or (9)(b) or 79(3) of this Act or paragraph 5 of Schedule 5 to this Act; and
- (c) tax has not (since the last occasion on which such an undertaking was given) become chargeable with respect to it under the said section 34 or under section 78 or 82(3) of the Finance Act 1976 or under section 32, 32A or 79(3) of this Act or paragraph 3 of Schedule 5 to this Act.
- (3) If it appears to the Treasury that provision is, or is to be, made by a settlement for the maintenance, repair or preservation of any such property as is mentioned in subsection (1)(b), (c), (d) or (e) of section 31 of this Act they may, on a claim made for the purpose—
- (a) designate that property under this sub-paragraph, and
- (b) accept with respect to it an undertaking such as is described in subsection (4), or (as the case may be) undertaking such as described in subsections (4) and (4A) of that section;
and, if they do so, sub-paragraph (2) above shall have effect as if the designation were under that section and the undertaking or undertakings under section 30 of this Act and as if the reference to tax becoming chargeable were a reference to the occurrence of an event on which tax would become chargeable under section 32 or 32A of this Act if there had been a conditionally exempt transfer of the property when the claim was made and the undertaking or undertakings had been given under section 30.
- (4) A charity is a qualifying charity for the purposes of sub-paragraph (1) above if it exists wholly or mainly for maintaining, repairing or preserving for the public benefit buildings of historic or architectural interest, land of scenic, historic or scientific interest or objects of national, scientific, historic or artistic interest; and in this sub-paragraph “*national interest*” includes interest within any part of the United Kingdom.
- (5) Designations, undertakings and acceptances made under section 84(6) of the Finance Act 1976 or section 94(3) of the Finance Act 1982 shall be treated as made under sub-paragraph (3) above.
- (5A) In the case of property which, if a direction is given under paragraph 1 above, will be property to which paragraph 15A below applies, sub-paragraph (1)(b) above shall have effect as if for the reference to the settlor there were substituted a reference to either the settlor or the person referred to in paragraph 15A(2).
##### 4
- (1) Paragraphs (a) and (b) of paragraph 3(1) above do not apply to property which—
- (a) was previously comprised in another settlement, and
- (b) ceased to be comprised in that settlement and became comprised in the current settlement in circumstances such that by virtue of paragraph 9(1) below there was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it;
and in relation to any such property paragraph 3(1)(c) above shall apply with the omission of the words “at any time after the end of that period”.
- (2) Sub-paragraph (1) above shall not have effect if the time when the property comprised in the previous settlement devolved otherwise than on any such body or charity as is mentioned in paragraph 3(1)(a) above fell before the expiration of the period of six years there mentioned; but in such a case paragraph 3(1) above shall apply to the current settlement as if for the references to that period of six years there were substituted references to the period beginning with the date on which the property became comprised in the current settlement and ending six years after the date on which it became held on the relevant trusts of the previous settlment (or, where this sub-paragraph has already had effect in relation to the property, the date on which it became held on the relevant trusts of the first settlement in the series).
### Withdrawal
##### 5
If in the Treasury’s opinion the facts concerning any property or its administration cease to warrant the continuance of the effect of a direction given under paragraph 1 above in respect of the property, they may at any time by notice in writing to the trustees withdraw the direction on such grounds, and from such date, as may be specified in the notice; and the direction shall cease to have effect accordingly.
### Information
##### 6
Where a direction under paragraph 1 above has effect in respect of property, the trustees shall from time to time furnish the Treasury with such accounts and other information relating to the property as the Treasury may reasonably require.
### Enforcement of trusts
##### 7
Where a direction under paragraph 1 above has effect in respect of property, the trusts on which the property is held shall be enforceable at the suit of the Treasury and the Treasury shall, as respects the appointment, removal and retirement of trustees, have the rights and powers of a beneficiary.
## PART II — PROPERTY LEAVING MAINTENANCE FUNDS
### Charge to tax
##### 8
- (1) This paragraph applies to settled property which is held on trusts which comply with the requirements mentioned in paragraph 3(1) above, and in respect of which a direction given under paragraph 1 above has effect.
- (2) Subject to paragraphs 9 and 10 below, there shall be a charge to tax under this paragraph—
- (a) where settled property ceases to be property to which this paragraph applies, otherwise than by virtue of an application of the kind mentioned in paragraph 3(1)(a)(i) or (ii) above or by devolving on any such body or charity as is mentioned in paragraph 3(1)(a)(ii);
- (b) in a case in which paragraph (a) above does not apply, where the trustees make a disposition (otherwise than by such an application) as a result of which the value of settled property to which this paragraph applies is less than it would be but for the disposition.
- (3) Subsections (4), (5) and (10) of section 70 of this Act shall apply for the purposes of this paragraph as they apply for the purposes of that section (with the substitution of a reference to sub-paragraph (2)(b) above for the reference in section 70(4) to section 70(2)(b)).
- (4) The rate at which tax is charged under this paragraph shall be determined in accordance with paragraphs 11 to 15 below.
- (5) The devolution of property on a body or charity shall not be free from charge by virtue of sub-paragraph (2)(a) above if, at or before the time of devolution, an interest under the settlement in which the property was comprised immediately before the devolution is or has been acquired for a consideration in money or money’s worth by that or another such body or charity; but for the purposes of this sub-paragraph any acqusition from another such body or charity shall be disregarded.
- (6) For the purposes of sub-paragraph (5) above a body or charity shall be treated as acquiring an interest for a consideration in money or money’s worth if it becomes entitled to the interest as a result of transactions which include a disposition for such consideration (whether to that body or charity or to another person) of that interest or of other property.
### Exceptions from charge
##### 9
- (1) Tax shall not be charged under paragraph 8 above in respect of property which, within the permitted period after the occasion on which tax would be chargeable under that paragraph, becomes comprised in another settlement as a result of a transfer of value which is exempt under section 27 of this Act.
- (2) In sub-paragraph (1) above “*the permitted period*” means the period of thirty days except in a case where the occasion referred to is the death of the settlor, and in such a case means the period of two years.
- (3) Sub-paragraph (1) above shall not apply to any property if the person who makes the transfer of value has acquired it for a consideration in money or money’s worth; and for the purposes of this sub-paragraph a person shall be treated as acquiring any property for such consideration if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.
- (4) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after it becomes comprised in the other settlement (less the amount of any consideration for its transfer received by the person who makes the transfer of value), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
- (5) The reference in sub-paragraph (4) above to the amount on which tax would be charged is a reference to the amount on which it would be charged apart from—
- (a) section 70(5)(b) of this Act (as applied by paragraph 8(3) above), and
- (b) Chapters I and II of Part V of this Act;
and the reference in that sub-paragraph to the amount on which tax is charged is a reference to the amount on which it would be charged apart from section 70(5)(b) and those Chapters.
##### 10
- (1) Tax shall not be charged under paragraph 8 above in respect of property which ceases to be property to which that paragraph applies on becoming—
- (a) property to which the settlor or his spouse is beneficially entitled, or
- (b) property to which the settlor’s widow or widower is beneficially entitled if the settlor has died in the two years preceding the time when it becomes such property.
- (2) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after it becomes property of a description specified in paragraph (a) or (b) of that sub-paragraph (less the amount of any consideration for its transfer received by the trustees), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
- (3) The reference in sub-paragraph (2) above to the amount on which tax would be charged is a reference to the amount on which it would be charged apart from—
- (a) section 70(5)(b) of this Act (as applied by paragraph 8(3) above), and
- (b) Chapters I and II of Part V of this Act;
and the reference in sub-paragraph (2) above to the amount on which tax is charged is a reference to the amount on which it would be charged apart from section 70(5)(b) and those Chapters.
- (4) Sub-paragraph (1) above shall not apply in relation to any property if, at or before the time when it becomes property of a description specified in paragraph (a) or (b) of that sub-paragraph, an interest under the settlement in which the property was comprised immediately before it ceased to be property to which paragraph 8 above applies is or has been acquired for a consideration in money or money’s worth by the person who becomes beneficially entitled.
- (5) For the purposes of sub-paragraph (4) above a person shall be treated as acquiring an interest for a consideration in money or money’s worth if he becomes entitled to the interest as a result of transactions which include a disposition for such consideration (whether to him or to another person) of that interest or of other property.
- (6) Sub-paragraph (1) above shall not apply in respect of property if it was relevant property before it became (or last became) property to which paragraph 8 above applies and, by virtue of paragraph 16(1) or 17(1) below, tax was not chargeable (or, but for paragraph 16(2) or 17(4), would not have been chargeable) under section 65 of this Act in respect of its ceasing to be relevant property before becoming (or last becoming) property to which paragraph 8 above applies.
- (7) Sub-paragraph (1) above shall not apply in respect of property if—
- (a) before it last became property to which paragraph 8 above applies it was comprised in another settlement in which it was property to which that paragraph applies, and
- (b) it ceased to be comprised in the other settlement and last became property to which that paragraph applies in circumstances such that by virtue of paragraph 9(1) above there was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it.
- (8) Sub-paragraph (1) above shall not apply unless the person who becomes beneficially entitled to the property is domiciled in the United Kingdom at the time when he becomes so entitled.
### Rates of charge
##### 11
- (1) This paragraph applies where tax is chargeable under paragraph 8 above and—
- (a) the property in respect of which the tax is chargeable was relevant property before it became (or last became) property to which that paragraph applies, and
- (b) by virtue of paragraph 16(1) or 17(1) below tax was not chargeable (or, but for paragraph 16(2) or 17(4), would not have been chargeable) under section 65 of this Act in respect of its ceasing to be relevant property on or before becoming (or last becoming) property to which paragraph 8 above applies.
- (2) Where this paragraph applies, the rate at which the tax is charged shall be the aggregate of the following percentages—
- (a) 0.25 per cent. for each of the first forty complete successive quarters in the relevant period,
- (b) 0.20 per cent. for each of the next forty,
- (c) 0.15 per cent. for each of the next forty,
- (d) 0.10 per cent. for each of the next forty, and
- (e) 0.05 per cent. for each of the next forty.
- (3) In sub-paragraph (2) above “*the relevant period*” means the period beginning with the latest of—
- (a) the date of the last ten-year anniversary of the settlement in which the property was comprised before it ceased (or last ceased) to be relevant property,
- (b) the day on which the property became (or last became) relevant property before it ceased (or last ceased) to be such property, and
- (c) 13th March 1975,
and ending with the day before the event giving rise to the charge.
- (4) Where the property in respect of which the tax is chargeable has at any time ceased to be and again become property to which paragraph 8 above applies in circumstances such that by virtue of paragraph 9(1) above there was no charge to tax in respect of it (or, but for paragraph 9(4), there would have been no charge), it shall for the purposes of this paragraph be treated as having been property to which paragraph 8 above applies throughout the period mentioned in paragraph 9(1).
##### 12
- (1) This paragraph applies where tax is chargeable under paragraph 8 above and paragraph 11 above does not apply.
- (2) Where this paragraph applies, the rate at which the tax is charged shall be the higher of—
- (a) the first rate (as determined in accordance with paragraph 13 below), and
- (b) the second rate (as determined in accordance with paragraph 14 below).
##### 13
- (1) The first rate is the aggregate of the following percentages—
- (a) 0.25 per cent. for each of the first forty complete successive quarters in the relevant period,
- (b) 0.20 per cent. for each of the next forty,
- (c) 0.15 per cent. for each of the next forty,
- (d) 0.10 per cent. for each of the next forty, and
- (e) 0.05 per cent. for each of the next forty.
- (2) In sub-paragraph (1) above “*the relevant period*” means the period beginning with the day on which the property in respect of which the tax is chargeable became (or first became) property to which paragraph 8 above applies, and ending with the day before the event giving rise to the charge.
- (3) For the purposes of sub-paragraph (2) above, any occasion on which property became property to which paragraph 8 above applies, and which occurred before an occasion of charge to tax under that paragraph in respect of the property, shall be disregarded.
- (4) The reference in sub-paragraph (3) above to an occasion of charge to tax under paragraph 8 does not include a reference to—
- (a) the occasion by reference to which the rate is being determined in accordance with this Schedule, or
- (b) an occasion which would not be an occasion of charge but for paragraph 9(4) above.
##### 14
- (1) If the settlor is alive, the second rate is the effective rate at which tax would be charged, on the amount on which it is chargeable, in accordance with the appropriate provision of section 7 of this Act if the amount were the value transferred by a chargeable transfer made by him on the occasion on which the tax becomes chargeable.
- (1A) The rate or rates of tax determined under sub-paragraph (1) above in respect of any occasion shall not be affected by the death of the settlor after that occasion.
- (2) If the settlor is dead, the second rate is (subject to sub-paragraph (3) below) the effective rate at which tax would have been charged, on the amount on which it is chargeable, in accordance with the appropriate provision of section 7 of this Act if the amount had been added to the value transferred on his death and had formed the highest part of it.
- (3) If the settlor died before 13th March 1975, the second rate is the effective rate at which tax would have been charged, on the amount on which it is chargeable (“the chargeable amount”), in accordance with the appropriate provision of section 7 of this Act if the settlor had died when the event occasioning the charge under paragraph 8 above occurred, the value transferred on his death had been equal to the amount on which estate duty was chargeable when he in fact died, and the chargeable amount had been added to that value and had formed the highest part of it.
- (4) Where, in the case of a settlement (“the current settlement”), tax is chargeable under paragraph 8 above in respect of property which—
- (a) was previously comprised in another settlement, and
- (b) ceased to be comprised in that settlement and became comprised in the current settlement in circumstances such that by virtue of paragraph 9(1) above was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it,
then, subject to sub-paragraph (5) below, references in sub-paragraphs (1) to (3) above to the settlor shall be construed as references to the person who was the settlor in relation to the settlement mentioned in paragraph (a) above (or, if the Board so determine, the person who was the settlor in relation to the current settlement).
- (5) Where, in the case of a settlement (“the current settlement”), tax is chargeable under paragraph 8 above in respect of property which—
- (a) was previously comprised at different times in other settlements (“the previous settlements”), and
- (b) ceased to be comprised in each of them, and became comprised in another of them or in the current settlement, in circumstances such that by virtue of paragraph 9(1) above there was no charge (or, but for paragraph 9(4), there would have been no charge) to tax in respect of it,
references in sub-paragraphs (1) to (3) above to the settlor shall be construed as references to the person who was the settlor in relation to the previous settlement in which the property was first comprised (or, if the Board so determine, any person selected by them who was the settlor in relation to any of the other previous settlements or the current settlement).
- (6) Sub-paragraph (7) below shall apply if—
- (a) in the period of seven years preceding a charge under paragraph 8 above (the “current charge”), there has been another charge under that paragraph where tax was charged at the second rate, and
- (b) the person who is the settlor for the purposes of the current charge is the settlor for the purposes of the other charge (whether or not the settlements are the same and, if the settlor is dead, whether or not he has died since the other charge);
and in sub-paragraph (7) below the other charge is referred to as the “previous charge”.
- (7) Where this sub-paragraph applies, the amount on which tax was charged on the previous charge (or, if there have been more than one, the aggregate of the amounts on which tax was charged on each)—
- (a) shall, for the purposes of calculating the rate of the current charge under sub-paragraph (1) above, be taken to be the value transferred by a chargeable transfer made by the settlor immediately before the occasion of the current charge, and
- (b) shall, for the purposes of calculating the rate of the current charge under sub-paragraph (2) or (3) above, be taken to increase the value there mentioned by an amount equal to that amount (or aggregate).
- (8) References in sub-paragraphs (1) to (3) above to the effective rate are to the rate found by expressing the tax chargeable as a percentage of the amount on which it is charged.
- (9) For the purposes of sub-paragraph (1) above the appropriate provision of section 7 of this Act is subsection (2), and for the purposes of sub-paragraphs (2) and (3) above it is (if the settlement was made on death) subsection (1) and (if not) subsection (2).
##### 15
Where property is, by virtue of paragraph 1(3) above, treated as property in respect of which a direction has been given under paragraph 1, it shall for the purposes of paragraphs 11 to 14 above be treated as having become property to which paragraph 8 above applies when the transfer of value mentioned in paragraph 1(3) was made.
## PART III — PROPERTY BECOMING COMPRISED IN MAINTENANCE FUNDS
##### 16
- (1) Tax shall not be charged under section 65 of this Act in respect of property which ceases to be relevant property on becoming property in respect of which a direction under paragraph 1 above then has effect.
- (2) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after it becomes property in respect of which the direction has effect (less the amount of any consideration for its transfer received by the trustees of the settlement in which it was comprised immediately before it ceased to be relevant property), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
- (3) Sub-paragraph (1) above shall not apply in relation to any property if, at or before the time when it becomes property in respect of which the direction has effect, an interest under the settlement in which it was comprised immediately before it ceased to be relevant property is or has been acquired for a consideration in money or money’s worth by the trustees of the settlement in which it becomes comprised on ceasing to be relevant property.
- (4) For the purposes of sub-paragraph (3) above trustees shall be treated as acquiring an interest for a consideration in money or money’s worth if they become entitled to the interest as a result of transactions which include a disposition for such consideration (whether to them or to another person) of that interest or of other property.
##### 17
- (1) Tax shall not be charged under section 65 of this Act in respect of property which ceases to be relevant property if within the permitted period an individual makes a transfer of value—
- (a) which is exempt under section 27 of this Act, and
- (b) the value transferred by which is attributable to that property.
- (2) In sub-paragraph (1) above “*the permitted period*” means the period of thirty days beginning with the day on which the property ceases to be relevant property except in a case where it does so on the death of any person, and in such a case means the period of two years beginning with that day.
- (3) Sub-paragraph (1) above shall not apply if the individual has acquired the property concerned for a consideration in money or money’s worth; and for the purposes of this sub-paragraph an individual shall be treated as acquiring any property for such consideration if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.
- (4) If the amount on which tax would be charged apart from sub-paragraph (1) above in respect of any property exceeds the value of the property immediately after the transfer there referred to (less the amount of any consideration for its transfer received by the individual), that sub-paragraph shall not apply but the amount on which tax is charged shall be equal to the excess.
##### 18
In paragraphs 16(2) and 17(4) above the references to the amount on which tax would be charged are references to the amount on which it would be charged apart from—
- (a) paragraph (b) of section 65(2) of this Act, and
- (b) Chapters I and II of Part V of this Act;
and the references to the amount on which tax is charged are references to the amount on which it would be charged apart from that paragraph and those Chapters.
## SCHEDULE 5
### Charge on failure of condition of exemption—objects
##### 1
- (1) Where, under section 31 of the Finance Act 1975, the value of an object has been left out of account and the Treasury are satisfied that at any time the undertaking given under that section or under paragraph 5 below with respect to the object has not been observed in a material respect, tax shall be chargeable with respect to the object in accordance with paragraph 2 below.
- (2) Where, under section 31 of the Finance Act 1975, the value of any object has been left out of account and—
- (a) sub-paragraph (1) above does not apply, but
- (b) the object is disposed of, whether on sale or otherwise,
then, subject to the following provisions of this paragraph, tax shall be chargeable with respect to the object in accordance with paragraph 2 below; but where the value of an object has been so left out of account on the death of more than one person, the tax chargeable under this sub-paragraph shall be chargeable only by reference to the last death.
- (3) Tax shall not be chargeable by virtue of sub-paragraph (2) above with respect to an object—
- (a) on its being sold by private treaty to a body mentioned in Schedule 3 to this Act or on its being disposed of to such a body otherwise than by sale, or
- (b) if it is disposed of otherwise than by sale and the undertaking previously given with respect to it is replaced by a further undertaking under paragraph 5 below.
- (4) For the purposes of sub-paragraph (2) above, the acceptance of an object under section 230 of this Act shall not be treated as a disposal of the object.
##### 2
- (1) The following provisions of this paragraph shall have effect where, under section 31 of the Finance Act 1975, the value of any object has been left out of account in determining the value transferred by the transfer of value made on the death of any person (in this paragraph referred to as the value transferred on death) and tax becomes chargeable with respect to the object under paragraph 1 above by reason of the disposal of the object or the non-observance of an undertaking (in this paragraph referred to as a chargeable event).
- (2) The tax chargeable under paragraph 1 above with respect to an object shall be so much of the tax that would have been chargeable on the value transferred on death as would have been attributable to the value of the object if—
- (a) section 31 of the Finance Act 1975 had not applied to the object, and
- (b) the value of the object at the time of the death had been equal to its value at the time of the chargeable event and, if the chargeable event was a disposal on sale complying with paragraph 6 below, that value had been equal to the proceeds of sale.
- (3) Where—
- (a) under section 31 of the Finance Act 1975 the value of two or more objects has been left out of account in determining the value transferred on death, and
- (b) those objects formed a set at the time of death, and
- (c) tax becomes chargeable under paragraph 1 above with respect to two or more of the objects by reason of chargeable events occurring at different times,
the preceding provisions of this paragraph shall apply as if both or all the chargeable events had occurred at the time of the earlier or earliest one, and the tax chargeable with respect to the objects shall be adjusted accordingly on the occurrence of each of the subsequent chargeable events.
- (4) Sub-paragraph (3) above shall not apply with respect to two or more chargeable events which are disposals to different persons who are neither acting in concert nor connected with each other.
### Charge on failure of condition of exemption—buildings etc.
##### 3
- (1) Where, under subsection (2) of section 34 of the Finance Act 1975, the value of any property has been left out of account and the Treasury are satisfied that at any time the undertaking given under that subsection or under paragraph 5 below in respect of that property has not been observed in a material respect, then, subject to sub-paragraph (3) below, tax shall be chargeable in accordance with paragraph 4 below with respect to the property and any property associated with it.
- (2) Where, under section 34(2) of the Finance Act 1975, the value of any property has been left out of account in determining the value transferred on the death of any person and—
- (a) sub-paragraph (1) above does not apply, but
- (b) the property is disposed of, whether on sale or otherwise,
then, subject to sub-paragraphs (3) and (4) below, tax shall be chargeable in accordance with paragraph 4 below with respect to the property and any property associated with it; but where the value of the property has been left out of account on the death of more than one person, the tax chargeable under this sub-paragraph shall be chargeable only by reference to the last death.
- (3) The Treasury may direct that the tax chargeable under this paragraph on a failure to observe an undertaking with respect to any property or on the disposal of any property shall be chargeable with respect only to that property, if it appears to them that the entity consisting of the building, land and objects concerned has not been materially affected.
- (4) Tax shall not be chargeable under sub-paragraph (2) above with respect to any property—
- (a) on its being sold by private treaty to a body mentioned in Schedule 3 to this Act or on its being disposed of to such a body otherwise than by sale, or
- (b) if it is disposed of otherwise than by sale and the undertaking previously given with respect to it is replaced by a further undertaking under paragraph 5 below;
and for the purposes of sub-paragraph (2) above the acceptance of any property under section 230 of this Act shall not be treated as a disposal of the property.
- (5) For the purposes of this paragraph, two or more properties are associated with each other if one of them is a building falling within subsection (1)(b) of section 34 of the Finance Act 1975 and the other or others such land or objects as, in relation to that building, fall within subsection (1)(c) or (d) of that section.
##### 4
The tax chargeable under paragraph 3 above with respect to any property shall be so much of the tax that would have been chargeable on the value transferred on the death as would have been attributable to the value of the property if—
- (a) section 34 of the Finance Act 1975 had not applied to the property; and
- (b) the value of the property at the time of the death had been equal to its value at the time the tax becomes chargeable and, if it becomes chargeable on a sale complying with paragraph 6 below, that value had been equal to the proceeds of sale.
### Further undertaking on disposal
##### 5
- (1) The further undertaking referred to in paragraph 1 above is an undertaking given, by such person as the Treasury think appropriate in the circumstances of the case, that, until the person entitled to the object dies or the object is disposed of, whether by sale or gift or otherwise,—
- (a) the object will be kept permanently in the United Kingdom and will not leave it temporarily except for a purpose and a period approved by the Treasury; and
- (b) reasonable steps will be taken for the preservation of the object; and
- (c) reasonable facilities for examining the object for the purpose of seeing the steps taken for its preservation or, subject to sub-paragraph (3) below, for purposes of research, will be allowed to any person authorised by the Treasury to examine it.
- (2) The further undertaking referred to in paragraph 3 above is an undertaking given by such person as the Treasury think appropriate in the circumstances of the case that, until the person entitled to the property dies or the property is disposed of, whether by sale or gift or otherwise, reasonable steps will be taken—
- (a) in the case of land falling within subsection (1)(a) of section 34 of the Finance Act 1975, for the maintenance of the land and the preservation of its character, and
- (b) in the case of any other property, for the maintenance, repair and preservation of the property and, if it is an object falling within subsection (1)(d) of that section, for keeping it associated with the building concerned,
and for securing reasonable access to the public.
- (3) If it appears to the Treasury, on a claim made for the purpose, that any documents which are designated as objects to which section 31 of the Finance Act 1975 applies contain information which for personal or other reasons ought to be treated as confidential, they may exclude those documents, either entirely or to such extent as they think fit, from so much of an undertaking given or to be given under sub-paragraph (1)(c) above as relates to their examination for purposes of research.
### Requirements of sale
##### 6
A sale complies with this paragraph if—
- (a) it was not intended to confer any gratuitous benefit on any person, and
- (b) it was either a transaction at arm’s length between persons not connected with each other or a transaction such as might be expected to be made at arm’s length between persons not connected with each other.
## SCHEDULE 6
### General
##### 1
References in any enactment, in any instrument made under any enactment, or in any document (whether executed before or after the passing of this Act) to estate duty or to death duties shall have effect, as far as may be, as if they included references to capital transfer tax chargeable under section 4 of this Act (or under section 22 of the Finance Act 1975).
### Surviving spouse or former spouse
##### 2
In determining for the purposes of this Act the value of the estate, immediately before his death, of a person whose spouse (or former spouse) died before 13th November 1974, there shall be left out of account the value of any property which, if estate duty were chargeable on the later death, would be excluded from the charge by section 5(2) of the Finance Act 1894 (relief on death of surviving spouse); and tax shall not be chargeable under section 52 of this Act on the coming to an end of an interest in possession in settled property if—
- (a) the spouse (or former spouse) of the person beneficially entitled to the interest died before 13th November 1974, and
- (b) the value of the property in which the interest subsists would by virtue of the preceding provisions of this paragraph have been left out of account in determining the value of the survivor’s estate had he died immediately before the interest came to an end.
### Sales and mortgages of reversionary interests
##### 3
- (1) Where a reversionary interest in settled property was before 27th March 1974 sold or mortgaged for full consideration in money or money’s worth, no greater amount of tax shall be payable by the purchaser or mortgagee when the interest falls into possession than the amounts of estate duty that would have been payable by him if none of the provisions of the Finance Act 1975 or this Act had been passed; and any tax which, by virtue of this paragraph, is not payable by the mortgagee but which is payable by the mortgagor shall rank as a charge subsequent to that of the mortgagee.
- (2) Where the interest referred to in sub-paragraph (1) above was sold or mortgaged to a close company in relation to which the person entitled to the interest was a participator, sub-paragraph (1) above shall apply only to the extent that other persons had rights and interests in the company; and this sub-paragraph shall be construed as if contained in Part IV of this Act.
### Objects of national etc. interest left out of account on death
##### 4
- (1) In its application to a sale which does not comply with paragraph 6 of Schedule 5 to this Act, subsection (2) of section 40 of the Finance Act 1930 shall have effect as if the reference to the proceeds of sale were a reference to the value of the objects on that date.
- (2) Where there has been a death in relation to which the value of any property has been left out of account under section 40 of the Finance Act 1930 and, before any estate duty has become chargeable under the provisions of that section or of section 48 of the Finance Act 1950, there is a conditionally exempt transfer of that property, then, on the occurrence of a chargeable event in respect of that property—
- (a) if there has been no conditionally exempt transfer of the property on death, either—
- (i) tax shall be chargeable under section 32 or 32A of this Act (as the case may be), or
- (ii) estate duty shall be chargeable under those provisions, as the Board may elect, and
- (b) if there has been such a conditionally exempt transfer, there shall be a charge under section 32 or 32A of this Act (as the case may be) and not under those provisions;
- and in this sub-paragraph “*conditionally exempt transfer*” includes a conditionally exempt occasion within the meaning of section 78(2) of this Act.
- (3) In sections 33(7) and 8 and 79(1) of this Act, references to a conditionally exempt transfer of any property include references to a death in relation to which the value of any property has been left out of account under section 40 of the Finance Act 1930 and, in relation to such property, references to a chargeable event or to the tax chargeable in accordance with section 33 of this Act by reference to a chargeable event include references to an event on the occurrence of which estate duty becomes chargeable under section 40 of the Finance Act 1930 or section 48 of the Finance Act 1950 or to the estate duty so chargeable.
- (4) In determining for the purposes of section 40(2) of the Finance Act 1930 what is the last death on which the objects passed, there shall be disregarded any death after 6th April 1976.
- (5) In the application of this paragraph to Northern Ireland for references to section 40 of the Finance Act 1930 and section 48 of the Finance Act 1950 there shall be substituted references to section 2 of the Finance Act (Northern Ireland) 1931 and Article 6 of the Finance (Northern Ireland) Order 1972 respectively.
## SCHEDULE 7
##### 1
In this Schedule “*the repealed enactments*” means the enactments repealed by this Act.
##### 2
Sections 126 to 130 of this Act shall have effect (to the exclusion of the corresponding repealed enactments) in relation to any disposal after the end of 1984, whether the death in respect of which relief was given occurred before or after that time.
##### 3
Where section 146 of this Act has effect in relation to a death after the end of 1984, it shall also have effect (to the exclusion of section 122 of the Finance Act 1976) in relation to any chargeable transfer of the kind referred to in section 146(2), whether made before or after that time.
##### 4
Section 147 of this Act, so far as it relates to charges to tax in respect of claims to legitim made in the circumstances described in subsection (4) of that section, shall have effect (to the exclusion of the corresponding repealed enactments) in relation to claims made after the end of 1984, whether the testator died before or after that time.
##### 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6
Section 150 of this Act shall have effect (to the exclusion of section 88 of the Finance Act 1976) in relation to any claim made after the end of 1984.
##### 7
Section 203 of this Act shall have effect (to the exclusion of the corresponding repealed enactments) in relation to any chargeable transfer made after the end of 1984 (whether the spouse transfer concerned was made before or after that time).
##### 8
Section 218 of this Act, and section 245 so far as it relates to section 218, shall have effect in relation to settlements made after the end of 1984 to the exclusion of the corresponding repealed enactments, and those enactments shall continue to have effect in relation to settlements made before that time.
##### 9
Section 219 of this Act, and section 245 so far as it relates to section 219, shall come into force on 1st January 1985 for all purposes to the exclusion of the corresponding repealed enactments, except that those enactments shall continue to have effect in relation to notices given before that time.
##### 10
Section 220 of this Act shall come into force on 1st January 1985 for all purposes to the exclusion of the corresponding repealed enactments, except that those enactments shall continue to have effect in relation to authorisations given before that time.
##### 11
Any order made under section 233 of this Act shall have effect in relation to interest chargeable (under the repealed enactments) in respect of chargeable transfers and other events before the end of 1984 as it has effect in relation to interest chargeable (under this Act) in respect of transfers and other events after that time.
##### 12
Where payments are made or assets transferred after the end of 1984 in the circumstances described in section 262 of this Act, that section shall have effect (to the exclusion of the corresponding repealed enactments) whether the disposition first mentioned in that section was made before or after that time.
##### 13
Section 264 of this Act shall have effect (to the exclusion of section 114 of the Finance Act 1976) in any case where the later transfer is made after the end of 1984, whether the earlier transfer was made before or after that date.
##### 14
This Act shall not have effect in a case which would otherwise fall within paragraph 2(3) of Schedule 5 if the first chargeable event occurred before the end of 1984.
## SCHEDULE 8
### The Land Registration Act 1925
##### 1
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The Crown Proceedings Act 1947
##### 2
In section 14(1)(b) of the Crown Proceedings Act 1947, for the words from “payment” to the end there shall be substituted the words “payment of capital transfer tax under the Capital Transfer Tax Act 1984”.
### The Land Charges Act 1972
##### 3
- (1) In section 2 of the Land Charges Act 1972—
- (a) in subsection (4)(ii) for the words “Part III of the Finance Act 1975” there shall be substituted the words “the Capital Transfer Tax Act 1984”; and
- (b) in subsection (5)(i) for the words “Part III of the Finance Act 1975 (capital transfer tax)” there shall be substituted the words “the Capital Transfer Tax Act 1984”.
- (2) In section 4(6) of that Act for the words “Part III of the Finance Act 1975” there shall be substituted the words “the Capital Transfer Tax Act 1984”.
### The Finance Act 1975
##### 4
In section 49(4) of the Finance Act 1975 after the words “paragraph 1 of Schedule 6 to this Act” there shall be inserted the words “or section 18 of the Capital Transfer Tax Act 1984”.
### The Development Land Tax Act 1976
##### 5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6
- (1) Section 34 of the Development Land Tax Act 1976 shall be amended as follows.
- (2) In subsection (3)(d)(ii) for the words " Chapter II of Part IV of the Finance Act 1982 " there shall be substituted the words " any provision, apart from section 79, of Chapter III of Part III of the Capital Transfer Tax Act 1984 ".
- (3) In subsection (5)(a) after the words "Act 1976 " there shall be inserted the words " or section 31 of the Capital Transfer Tax Act 1984 " and for the words "section 76 of that Act" there shall be substituted the words " section 30(2) of the Capital Transfer Tax Act 1984 ".
- (4) In subsection (6) for the words " Subsections (2) and (2A) of section 51 of the Finance Act 1975 " there shall be substituted the words " Sections 2(3) and 3(4) of the Capital Transfer Tax Act 1984 " and for the words "Part III of the Finance Act 1975 " there shall be substituted the words " the Capital Transfer Tax Act 1984 ".
##### 7
- (1) Schedule 6 to the Development Land Tax Act 1976 shall be amended as follows.
- (2) In paragraph 18(2)—
- (a) after the words " section 22 of the Finance Act 1927 " there shall be inserted the words " or section 4 of the Capital Transfer Tax Act 1984 " , for the words "that Act" there shall be substituted the words " the Finance Act 1975 " and after the words " section 77 of the Finance Act 1976 " there shall be inserted the words " or under section 31 of the Capital Transfer Tax Act 1984 "; and
- (b) in paragraph (a) for the words from " subsection (7) " to " Act 1976 " there shall be substituted the words " section 32 of, or paragraph 3 of Schedule 5 to, the Capital Transfer Tax Act 1984 ".
- (3) In paragraph 19(4) for the words " paragraph 1(2) of Schedule 10 to the Finance Act 1975 " there shall be substituted the words " section 5(4) of the Capital Transfer Tax Act 1984 ".
- (4) In paragraph 24(1)—
- (a) in paragraph (b) for the words " subsection (3) of section 37 of the Finance Act 1975 " there shall be substituted the words " Schedule 1 to the Capital Transfer Tax Act 1984 " ; and
- (b) in paragraph (c) for the words " the said subsection (3) " there shall be substituted the words " the said Schedule 1 ".
### The Finance Act 197
##### 8
In section 38 of the Finance Act 1977—
- (a) in subsection (1) for the words “a direction has effect under section 93 of the Finance Act 1982” there shall be substituted the words “a direction has effect under paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”; and
- (b) in subsection (5)(a) for the words “the said section 93” there shall be substituted the words “the said paragraph 1”.
### The Capital Gains Tax Act 1979
##### 9
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 10
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 11
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 12
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The National Heritage Act J 980
##### 13
In section 8(1) of the National Heritage Act 1980 after the words “Finance Act 1975” there shall be inserted the words “or section 230 of the Capital Transfer Tax Act 1984”.
##### 14
In section 12(3) of the National Heritage Act 1980 for the words “the said paragraph 17(4)” there shall be substituted the words “section 230(4) of the Capital Transfer Tax Act 1984”.
##### 15
In section 13(3) of the National Heritage Act 1980 after the words “this section” there shall be inserted the words “or section 230(1) or 231(2) of the Capital Transfer Tax Act 1984”.
##### 16
In section 14(1) of the National Heritage Act 1980, for the words “or of the provisions amended by section 12 above” there shall be substituted the words “or under section 230 of the Capital Transfer Tax Act 1984”.
### The Finance Act 1980
##### 17
- (1) Section 52 of the Finance Act 1980 shall be amended as follows.
- (2) In subsection (1)—
- (a) for the words “a direction has effect under section 93 of the Finance Act 1982” there shall be substituted the words “a direction has effect under paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”;
- (b) in paragraph (a) for the words “subsection (3) of that section” there shall be substituted the words “sub-paragraph (1) of paragraph 3 of that Schedule”; and
- (c) in paragraph (b) for the words “that subsection” there shall be substituted the words “that sub-paragraph”.
- (3) In subsections (2) and (3) for the words “subsection (3)(a)(i) or (ii) of the said section 93” there shall be substituted the words “sub-paragraph (1)(a)(i) or (ii) of the said paragraph 3”.
- (4) In subsection (7)—
- (a) in paragraph (a) for the words from “paragraph 3(1)” to “paragraph 3(4)” there shall be substituted the words “paragraph 9(1) of Schedule 4 to the Capital Transfer Tax Act 1984 there is (or, but for paragraph 9(4)”; and
- (b) in paragraph (b) for the words “section 93 of that Act” there shall be substituted the words “paragraph 1 of that Schedule”.
##### 18
- (1) Section 53 of the Finance Act 1980 shall be amended as follows.
- (2) In subsection (1)—
- (a) for the words “subsection (3) of section 93 of the Finance Act 1982” there shall be substituted the words “sub-paragraph (1) of paragraph 3 of Schedule 4 to the Capital Transfer Tax Act 1984”; and
- (b) in paragraph (a) for the words “the said section 93” there shall be substituted the words “paragraph 1 of the said Schedule 4”.
- (3) In subsection (4)—
- (a) in paragraph (a) for the words from “paragraph 3(1)” to “paragraph 3(4)” there shall be substituted the words “paragraph 9(1) of Schedule 4 to the Capital Transfer Tax Act 1984 there is (or, but for paragraph 9(4)”; and
- (c) in paragraph (b) for the words “section 93 of that Act” there shall be substituted the words “paragraph 1 of that Schedule”.
##### 19
In section 98 of the Finance Act 1980 for the words between “by virtue of” and “but” there shall be substituted the words “paragraph 9(1) or 17(1) of Schedule 4 to the Capital Transfer Tax Act 1984 there is no charge to capital transfer tax in respect of the property ceasing to be comprised in the settlement or a reduced charge to that tax by virtue of paragraph 9(4) or 17(4) of that Schedule”.
### The Supreme Court Act 1981
##### 20
In section 109 of the Supreme Court Act 1981—
- (a) in subsections (1) and (2) for the words “Part III of the Finance Act 1975” there shall be substituted the words “the Capital Transfer Tax Act 1984”; and
- (b) in subsection (3) for the words “section 94(1)(a) of the Finance Act 1980” there shall be substituted the words “section 256(1)(a) of the Capital Transfer Act 1984”.
### The Finance Act 1982
##### 21
In section 61(1) of the Finance Act 1982—
- (a) for the words “section 93 below” there shall be substituted the words “paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”; and
- (b) in paragraph (a) for the words “subsection (3)(a)(i) of section 93” there shall be substituted the words “paragraph 3(1)(a)(i) of that Schedule”.
##### 22
In section 62 of the Finance Act 1982 for the words “section 93 below” there shall be substituted the words “paragraph 1 of Schedule 4 to the Capital Transfer Tax Act 1984”.
### The Finance (No. 2) Act 1983
##### 23
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
### The Value Added Tax Act 1983
##### 24
In Group 11 of Schedule 6 to the Value Added Tax Act 1983—
- (a) in item 2, for the words from “section 32(3)(a)” onwards there shall be substituted the words “paragraph 1(3)(a) or (4), paragraph 3(4)(a), or the words following paragraph 3(4), of Schedule 5 to the Capital Transfer Tax Act 1984”; and
- (b) in item 3, for the words “section 78(4) of the Finance Act 1976” there shall be substituted the words “section 32(4) of the Capital Transfer Tax Act 1984”.
### The Land Registration Act (Northern Ireland) 1970
##### 25
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## SCHEDULE 9
#### Chargeable transfers and exempt transfers.
##### 3A
- (1) Any reference in this Act to a potentially exempt transfer is a reference to a transfer of value—
- (a) which is made by an individual on or after 18th March 1986; and
- (b) which, apart from this section, would be a chargeable transfer (or to the extent to which, apart from this section, it would be such a transfer); and
- (c) to the extent that it constitutes either a gift to another individual or a gift into an accumulation and maintenance trust or a disabled trust;
but this subsection has effect subject to any provision of this Act which provides that a disposition (or transfer of value) of a particular description is not a potentially exempt transfer.
- (2) Subject to subsection (6) below, a transfer of value falls within subsection (1)(c) above, as a gift to another individual,—
- (a) to the extent that the value transferred is attributable to property which, by virtue of the transfer, becomes comprised in the estate of that other individual, . . . , or
- (b) so far as that value is not attributable to property which becomes comprised in the estate of another person, to the extent that, by virtue of the transfer, the estate of that other individual is increased, . . .
- (3) Subject to subsection (6) below, a transfer of value falls within subsection (1)(c) above, as a gift into an accumulation and maintenance trust or a disabled trust, to the extent that the value transferred is attributable to property which, by virtue of the transfer, becomes settled property to which section 71 or 89 of this Act applies.
- (4) A potentially exempt transfer which is made seven years or more before the death of the transferor is an exempt transfer and any other potentially exempt transfer is a chargeable transfer.
- (5) During the period beginning on the date of a potentially exempt transfer and ending immediately before—
- (a) the seventh anniversary of that date, or
- (b) if it is earlier, the death of the transferor,
it shall be assumed for the purposes of this Act that the transfer will prove to be an exempt transfer.
- (6) Where, under any provision of this Act other than section 52 tax is in any circumstances to be charged as if a transfer of value had been made, that transfer shall be taken to be a transfer which is not a potentially exempt transfer.
- (7) In the application of this section to an event on the happening of which tax is chargeable under section 52 below, the reference in subsection (1)(a) above to the individual by whom the transfer of value is made is a reference to the person who, by virtue of section 3(4) above, is treated as the transferor.
##### 8A
- (1) This section applies where—
- (a) immediately before the death of a person (a “deceased person”), the deceased person had a spouse or civil partner (“the survivor”), and
- (b) the deceased person had unused nil-rate band on death.
- (2) A person has unused nil-rate band on death if—
$$M>VT$where—M is the maximum amount that could be transferred by a chargeable transfer made (under section 4 above) on the person's death if it were to be wholly chargeable to tax at the rate of nil per cent. (assuming, if necessary, that the value of the person's estate were sufficient but otherwise having regard to the circumstances of the person); andVT is the value actually transferred by the chargeable transfer so made (or nil if no chargeable transfer is so made).$
- (3) Where a claim is made under this section, the nil-rate band maximum at the time of the survivor's death is to be treated for the purposes of the charge to tax on the death of the survivor as increased by the percentage specified in subsection (4) below (but subject to subsection (5) and section 8C below).
- (4) That percentage is—
$$ENRBMD×100$where—E is the amount by which M is greater than VT in the case of the deceased person; andNRBMD is the nil-rate band maximum at the time of the deceased person's death.$
- (5) If (apart from this subsection) the amount of the increase in the nil-rate band maximum at the time of the survivor's death effected by this section would exceed the amount of that nil-rate band maximum, the amount of the increase is limited to the amount of that nil-rate band maximum.
- (6) Subsection (5) above may apply either—
- (a) because the percentage mentioned in subsection (4) above (as reduced under section 8C below where that section applies) is more than 100 because of the amount by which M is greater than VT in the case of one deceased person, or
- (b) because this section applies in relation to the survivor by reference to the death of more than one person who had unused nil-rate band on death.
- (7) In this Act “*nil-rate band maximum*” means the amount shown in the second column in the first row of the Table in Schedule 1 to this Act (upper limit of portion of value charged at rate of nil per cent.) and in the first column in the second row of that Table (lower limit of portion charged at next rate).
##### 8B
- (1) A claim under section 8A above may be made—
- (a) by the personal representatives of the survivor within the permitted period, or
- (b) (if no claim is so made) by any other person liable to the tax chargeable on the survivor's death within such later period as an officer of Revenue and Customs may in the particular case allow.
- (2) If no claim under section 8A above has been made in relation to a person (P) by reference to whose death that section applies in relation to the survivor, the claim under that section in relation to the survivor may include a claim under that section in relation to P if that does not affect the tax chargeable on the value transferred by the chargeable transfer of value made on P's death.
- (3) In subsection (1)(a) above “*the permitted period*” means—
- (a) the period of two years from the end of the month in which the survivor dies or (if it ends later) the period of three months beginning with the date on which the personal representatives first act as such, or
- (b) such longer period as an officer of Revenue and Customs may in the particular case allow.
- (4) A claim made within either of the periods mentioned in subsection (3)(a) above may be withdrawn no later than one month after the end of the period concerned.
##### 8C
- (1) This section applies where—
- (a) the conditions in subsection (1)(a) and (b) of section 8A above are met, and
- (b) after the death of the deceased person, tax is charged on an amount under any of sections 32, 32A and 126 below by reference to the rate or rates that would have been applicable to the amount if it were included in the value transferred by the chargeable transfer made (under section 4 above) on the deceased person's death.
- (2) If the tax is charged before the death of the survivor, the percentage referred to in subsection (3) of section 8A above is (instead of that specified in subsection (4) of that section)—
$$(ENRBMD-TANRBME)×100$where—E and NRBMD have the same meaning as in subsection (4) of that section;TA is the amount on which tax is charged; andNRBME is the nil-rate band maximum at the time of the event occasioning the charge.$
- (3) If this section has applied by reason of a previous event or events, the reference in subsection (2) to the fraction
$TANRBME$
is to the aggregate of that fraction in respect of the current event and the previous event (or each of the previous events).
- (4) If the tax is charged after the death of the survivor, it is charged as if the personal nil-rate band maximum of the deceased person were appropriately reduced.
- (5) In subsection (4) above—
- “*the personal nil-rate band maximum of the deceased person*” is the nil rate band maximum which is treated by Schedule 2 to this Act as applying in relation to the deceased person's death, increased in accordance with section 8A above where that section effected an increase in that nil-rate band maximum in the case of the deceased person (as survivor of another deceased person), and
- “*appropriately reduced*” means reduced by the amount (if any) by which the amount on which tax was charged at the rate of nil per cent. on the death of the survivor was increased by reason of the operation of section 8A above by virtue of the position of the deceased person.
##### 24A
- (1) A transfer of value is exempt to the extent that the value transferred by it is attributable to land in the United Kingdom given to a body falling within subsection (2) below.
- (2) A body falls within this subsection if it is—
- (a) a registered social landlord within the meaning of Part I of the Housing Act 1996;
- (b) a registered housing association within the meaning of the Housing Associations Act 1985; or
- (c) a registered housing association within the meaning of Part II of the Housing (Northern Ireland) Order 1992..
- (3) Subsections (2) to (5) of section 23 and subsection (4) of section 24 above shall apply in relation to subsection (1) above as they apply in relation to section 24(1).
##### 26A
A potentially exempt transfer which would (apart from this section) have proved to be a chargeable transfer shall be an exempt transfer to the extent that the value transferred by it is attributable to property which has been or could be designated under section 31(1) below and which, during the period beginning with the date of the transfer and ending with the death of the transferor,—
- (a) has been disposed of by sale by private treaty to a body mentioned in Schedule 3 to this Act or has been disposed of to such a body otherwise than by sale, or
- (b) has been disposed of in pursuance of section 230 below.
##### 29A
- (1) This section applies where—
- (a) apart from this section the transfer of value made on the death of any person is an exempt transfer to the extent that the value transferred by it is attributable to an exempt gift, and
- (b) the exempt beneficiary, in settlement of the whole or part of any claim against the deceased’s estate, effects a disposition of property not derived from the transfer.
- (2) The provisions of this Act shall have effect in relation to the transfer as if—
- (a) so much of the relevant value as is equal to the following amount, namely the amount by which the value of the exempt beneficiary’s estate immediately after the disposition is less than it would be but for the disposition, or
- (b) where that amount exceeds the relevant value, the whole of the relevant value,
were attributable to such a gift to the exempt beneficiary as is mentioned in subsection (3) below (instead of being attributable to a gift with respect to which the transfer is exempt).
- (3) The gift referred to in subsection (2) above is a specific gift with respect to which the transfer is chargeable, being a gift which satisfies the conditions set out in paragraphs (a) and (b) of section 38(1) below.
- (4) In determining the value of the exempt beneficiary’s estate for the purposes of subsection (2) above—
- (a) no deduction shall be made in respect of the claim referred to in subsection (1)(b) above, and
- (b) where the disposition referred to in that provision constitutes a transfer of value—
- (i) no account shall be taken of any liability of the beneficiary for any tax on the value transferred, and
- (ii) sections 104 and 116 below shall be disregarded.
- (5) Subsection (1)(b) above does not apply in relation to any claim against the deceased’s estate in respect of so much of any liability as is, in accordance with this Act, to be taken into account in determining the value of the estate.
- (6) In this section—
- “*exempt gift*”, in relation to a transfer of value falling within subsection (1)(a) above, means—a gift with respect to which the transfer is (apart from this section) exempt by virtue of the provisions of any sections 18 and 23 to 28 above, orwhere (apart from this section) the transfer is so exempt with respect to a gift up to a limit, so much of the gift as is within that limit;
- “*the exempt beneficiary*”, in relation to an exempt gift, means any of the following, namely—where the gift is exempt by virtue of section 18 above, the deceased’s spouse,where the gift is exempt by virtue of section 23 above, any person or body—whose property the property falling within subsection (1) of that section becomes, orby whom that property is held on trust for charitable purposes,where the gift is exempt by virtue of section 24, or 25 above, any body whose property the property falling within subsection (1) of that section becomes,where the gift is exempt by virtue of section 24A above, any body to whom the land falling within subsection (1) of that section is given, andwhere the gift is exempt by virtue of section 27 or 28 above, the trustees of any settlement in which the property falling within subsection (1) of that section becomes comprised;
- “*gift*” and “*specific gift*” have the same meaning as in Chapter III of this Part; and
- “*the relevant value*”, in relation to a transfer of value falling within subsection (1)(a) above, means so much of the value transferred by the transfer as is attributable to the gift referred to in that provision.
##### 32A
- (1) For the purposes of this section the following properties are associated with each other, namely, a building falling within section 31(1)(c) above and (to the extent that any of the following exists) an area or areas of land falling within section 31(1)(d) above in relation to the building and an object or objects falling within section 31(1)(e) above in relation to the building; and this section applies where there are such properties, which are referred to as associated properties.
- (2) Where there has been a conditionally exempt transfer of any property (or part), tax shall be charged under this section in respect of that property (or part) on the first occurrence after the transfer (or, if the transfer was a potentially exempt transfer, after the death of the transferor of an event which under this section is a chargeable event with respect to that property (or part).
- (3) If the Treasury are satisfied that at any time an undertaking given under section 30 above or this section for the maintenance, repair, preservation, access or keeping of any of the associated properties has not been observed in a material respect, then (subject to subsection (10) below) the failure to observe the undertaking is a chargeable event with respect to the whole of each of the associated properties of which there has been a conditionally exempt transfer.
- (4) If—
- (a) the person beneficially entitled to property dies, or
- (b) property (or part of it) is disposed of, whether by sale or gift or otherwise,
then, if the property is one of the associated properties and an undertaking for its maintenance, repair, preservation, access or keeping has been given under section 30 above or this section, the death or disposal is (subject to subsections (5) to (10) below) a chargeable event with respect to the whole of each of the associated properties of which there has been a conditionally exempt transfer.
- (5) Subject to subsection (6) below, the death of a person beneficially entitled to property, or the disposal of property (or part), is not a chargeable event if the personal representatives of the deceased (or, in the case of settled property, the trustees or the person next entitled) within three years of the death make or, as the case may be, the disposal is—
- (a) a disposal of the property (or part) concerned by sale by private treaty to a body mentioned in Schedule 3 to this Act, or to such a body otherwise than by sale, or
- (b) a disposal of the property (or part) concerned in pursuance of section 230 below.
- (6) Where a disposal mentioned in subsection (5)(a) or (b) above is a part disposal, that subsection does not make the event non-chargeable with respect to property other than that disposed of unless—
- (a) the requisite undertaking described in section 31 above is given with respect to the property (or part) not disposed of by such person as the Board think appropriate in the circumstances of the case, or
- (b) (where any of the property or part not disposed of is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to that property (or that part) by such person or persons as the Board think appropriate in the circumstances of the case;
and in this subsection “*part disposal*” means a disposal of property which does not consist of or include the whole of each property which is one of the associated properties and of which there has been a conditionally exempt transfer.
- (7) Where, after a relevant disposal (that is, a disposal mentioned in subsection (5)(a) or (b) above made in circumstances where that subsection applies), a person beneficially entitled to the property (or part) concerned dies or the property (or part) concerned is disposed of, the death or disposal is not a chargeable event with respect to the property (or part) concerned unless there has again been a conditionally exempt transfer of the property (or part) concerned after the relevant disposal.
- (8) The death of a person beneficially entitled to property, or the disposal of property (or part) otherwise than by sale, is not a chargeable event if—
- (a) the transfer of value made on the death or the disposal is itself a conditionally exempt transfer of the property (or part) concerned, or
- (b) the condition specified in subsection (8A) below is satisfied with respect to the property (or part) concerned.
- (8A) The condition referred to in subsection (8)(b) above is satisfied if—
- (a) the requisite undertaking described in section 31 above is given with respect to the property (or part) by such person as the Board think appropriate in the circumstances of the case, or
- (b) (where any of the property or part is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to the property (or part) by such person or persons as the Board think appropriate in the circumstances of the case.
- (9) If the whole or part of any property is disposed of by sale and—
- (a) the requisite undertaking described in section 31 above is given with respect to the property (or part) by such person as the Board think appropriate in the circumstances of the case, or
- (b) (where any of the property or part is an area of land within section 31(1)(d) above) the requisite undertakings described in that section are given with respect to the property (or part) by such person or persons as the Board think appropriate in the circumstances of the case,
the disposal is a chargeable event only with respect to the whole or part actually disposed of (if it is a chargeable event with respect to such whole or part apart from this subsection).
- (10) If—
- (a) the Treasury are satisfied that there has been a failure to observe, as to one of the associated properties or part of it, an undertaking for the property’s maintenance, repair, preservation, access or keeping, or
- (b) there is a disposal of one of the associated properties or part of it,
and it appears to the Treasury that the entity consisting of the associated properties has not been materially affected by the failure or disposal, they may direct that it shall be a chargeable event only with respect to the property or part as to which there has been a failure or disposal (if it is a chargeable event with respect to that property or part apart from this subsection.
##### 35A
- (1) An undertaking given under section 30, 32 or 32A above or paragraph 5 of Schedule 5 to this Act may be varied from time to time by agreement between the Board and the person bound by the undertaking.
- (2) Where a Special Commissioner is satisfied that—
- (a) the Board have made a proposal for the variation of such an undertaking to the person bound by the undertaking,
- (b) that person has failed to agree to the proposed variation within six months after the date on which the proposal was made, and
- (c) it is just and reasonable, in all the circumstances, to require the proposed variation to be made,
the Commissioner may direct that the undertaking is to have effect from a date specified by him as if the proposed variation had been agreed to by the person bound by the undertaking.
- (3) The date specified by the Special Commissioner must not be less than sixty days after the date of his direction.
- (4) A direction under this section shall not take effect if, before the date specified by the Special Commissioner, a variation different from that to which the direction relates is agreed between the Board and the person bound by the undertaking.
##### 39A
- (1) Where any part of the value transferred by a transfer of value is attributable to—
- (a) the value of relevant business property, or
- (b) the agricultural value of agricultural property,
then, for the purpose of attributing the value transferred (as reduced in accordance with section 104 or 116 below), to specific gifts and gifts of residue or shares of residue, sections 38 and 39 above shall have effect subject to the following provisions of this section.
- (2) The value of any specific gifts of relevant business property or agricultural property shall be taken to be their value as reduced in accordance with section 104 or 116 below.
- (3) The value of any specific gifts not falling within subsection (2) above shall be taken to be the appropriate fraction of their value.
- (4) In subsection (3) above “*the appropriate fraction*” means a fraction of which—
- (a) the numerator is the difference between the value transferred and the value, reduced as mentioned in subsection (2) above, of any gifts falling within that subsection, and
- (b) the denominator is the difference between the unreduced value transferred and the value, before the reduction mentioned in subsection (2) above, of any gifts falling within that subsection;
and in paragraph (b) above “*the unreduced value transferred*” means the amount which would be the value transferred by the transfer but for the reduction required by sections 104 and 116 below.
- (5) If or to the extent that specific gifts fall within paragraphs (a) and (b) of subsection (1) of section 38 above, the amount corresponding to the value of the gifts shall be arrived at in accordance with subsections (3) to (5) of that section by reference to their value reduced as mentioned in subsection (2) or, as the case may be, subsection (3) of this section.
- (6) For the purposes of this section the value of a specific gift of relevant business property or agricultural property does not include the value of any other gift payable out of that property; and that other gift shall not itself be treated as a specific gift of relevant business property or agricultural property.
- (7) In this section—
- “*agricultural property*” and “*the agricultural value of agricultural property*” have the same meaning as in Chapter II of Part V of this Act; and
- “*relevant business property*” has the same meaning as in Chapter I of that Part.
##### 46A
- (1) Subsections (2) and (4) below apply where—
- (a) a settlement commenced before 22nd March 2006,
- (b) a contract of life insurance was entered into before that day,
- (c) a premium payable under the contract is paid, or an allowed variation is made to the contract, at a particular time on or after that day,
- (d) immediately before that day, and at all subsequent times up to the particular time, there were rights under the contract that—
- (i) were comprised in the settlement, and
- (ii) were settled property in which a transitionally-protected interest (whether or not the same such interest throughout that period) subsisted,
- (e) rights under the contract become, by reference to payment of the premium or as a result of the variation,—
- (i) comprised in the settlement, and
- (ii) part of the settled property in which the then-current transitionally-protected interest subsists, and
- (f) any variation of the contract on or after 22nd March 2006 but before the particular time, so far as it is a variation that—
- (i) increased the benefits secured by the contract, or
- (ii) extended the term of the insurance provided by the contract,
was an allowed variation.
- (2) For the purposes of the provisions mentioned in subsection (3) below—
- (a) the rights mentioned in subsection (1)(e) above shall be taken to have become comprised in the settlement, and
- (b) the person beneficially entitled to the then-current transitionally-protected interest shall be taken to have become beneficially entitled to his interest in possession so far as it subsists in those rights,
before 22nd March 2006.
- (3) Those provisions are—
- section 3A(2) above;
- section 5(1A) above;
- section 49(1A) and (1B) below;
- section 51(1A) and (1B) below;
- section 52(2A) and (3A) below;
- section 53(1A) and (2A) below;
- section 54(2A) and (2B) below;
- section 54A(1A) below;
- section 57A(1A) below;
- section 58(1B) and (1C) below;
- section 59(1) and (2) below;
- section 80(4) below;
- section 100(1A) below;
- section 101(1A) below;
- section 102ZA(1) of the Finance Act 1986 (gifts with reservation); and
- sections 72(1A) and (2A) and 73(2A) of the 1992 Act.
- (4) If payment of the premium is a transfer of value made by an individual, that transfer of value is a potentially exempt transfer.
- (5) In this section—
- “*allowed variation*”, in relation to a contract, means a variation that takes place by operation of, or as a result of exercise of rights conferred by, provisions forming part of the contract immediately before 22nd March 2006;
- “*transitionally-protected interest*” means—an interest in possession to which a person was beneficially entitled immediately before, and on, 22nd March 2006, ora transitional serial interest.
##### 46B
- (1) Subsections (2) and (5) below apply where—
- (a) a settlement commenced before 22nd March 2006,
- (b) a contract of life insurance was entered into before that day,
- (c) a premium payable under the contract is paid, or an allowed variation is made to the contract, at a particular time on or after that day,
- (d) immediately before that day, and at all subsequent times up to the particular time, there were rights under the contract that—
- (i) were comprised in the settlement, and
- (ii) were settled property to which section 71 below applied,
- (e) rights under the contract become, by reference to payment of the premium or as a result of the variation, comprised in the settlement, and
- (f) any variation of the contract on or after 22nd March 2006 but before the particular time, so far as it was a variation that—
- (i) increased the benefits secured by the contract, or
- (ii) extended the term of the insurance provided by the contract,
was an allowed variation.
- (2) If the rights mentioned in subsection (1)(e) above would, but for subsection (1A) of section 71 below, become property to which that section applies, those rights shall become settled property to which that section applies when they become comprised in the settlement.
- (3) Subsection (5) below also applies where—
- (a) a settlement commenced before 22nd March 2006,
- (b) a contract of life insurance was entered into before that day,
- (c) a premium payable under the contract is paid, or an allowed variation is made to the contract, at a particular time on or after that day when there are rights under the contract—
- (i) that are comprised in the settlement and are settled property to which section 71A or 71D below applies,
- (ii) that immediately before that day were settled property to which section 71 below applied, and
- (iii) that on or after that day, but before the particular time, became property to which section 71A or 71D below applies in circumstances falling within subsection (4) below,
- (d) rights under the contract become, by reference to payment of the premium or as a result of the variation, comprised in the settlement, and
- (e) any variation of the contract on or after 22nd March 2006 but before the particular time, so far as it was a variation that—
- (i) increased the benefits secured by the contract, or
- (ii) extended the term of the insurance provided by the contract,
was an allowed variation.
- (4) The circumstances referred to in subsection (3)(c)(iii) above are—
- (a) in the case of property to which section 71D below applies, that the property on becoming property to which section 71D below applies ceased to be property to which section 71 below applied without ceasing to be settled property;
- (b) in the case of property to which section 71A below applies—
- (i) that the property on becoming property to which section 71A below applies ceased, by the operation of section 71(1B) below, to be property to which section 71 below applied, or
- (ii) that the property, having become property to which section 71D below applied in circumstances falling within paragraph (a) above, on becoming property to which 71A below applies ceased, by the operation of section 71D(5)(a) below, to be property to which section 71D below applied.
- (5) If payment of the premium is a transfer of value made by an individual, that transfer of value is a potentially exempt transfer.
- (6) In this section “*allowed variation*”, in relation to a contract, means a variation that takes place by operation of, or as a result of exercise of rights conferred by, provisions forming part of the contract immediately before 22nd March 2006.
##### 47A
In this Act “*settlement power*” means any power over, or exercisable (whether directly or indirectly) in relation to, settled property or a settlement.
##### 49A
- (1) Where a person (“L”) is beneficially entitled to an interest in possession in settled property, for the purposes of this Chapter that interest is an “immediate post-death interest” only if the following conditions are satisfied.
- (2) Condition 1 is that the settlement was effected by will or under the law relating to intestacy.
- (3) Condition 2 is that L became beneficially entitled to the interest in possession on the death of the testator or intestate.
- (4) Condition 3 is that—
- (a) section 71A below does not apply to the property in which the interest subsists, and
- (b) the interest is not a disabled person's interest.
- (5) Condition 4 is that Condition 3 has been satisfied at all times since L became beneficially entitled to the interest in possession.
##### 49B
Where a person is beneficially entitled to an interest in possession in settled property, for the purposes of this Chapter that interest is a “transitional serial interest” only—
- (a) if section 49C or 49D below so provides, or
- (b) if, and to the extent that, section 49E below so provides.
##### 49C
- (1) Where a person (“B”) is beneficially entitled to an interest in possession in settled property (“the current interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met.
- (2) Condition 1 is that—
- (a) the settlement commenced before 22nd March 2006, and
- (b) immediately before 22nd March 2006, the property then comprised in the settlement was property in which B, or some other person, was beneficially entitled to an interest in possession (“the prior interest”).
- (3) Condition 2 is that the prior interest came to an end at a time on or after 22nd March 2006 but before 6th April 2008.
- (4) Condition 3 is that B became beneficially entitled to the current interest at that time.
- (5) Condition 4 is that—
- (a) section 71A below does not apply to the property in which the interest subsists, and
- (b) the interest is not a disabled person's interest.
##### 49D
- (1) Where a person (“E”) is beneficially entitled to an interest in possession in settled property (“the successor interest”), that interest is a transitional serial interest for the purposes of this Chapter if the following conditions are met.
- (2) Condition 1 is that—
- (a) the settlement commenced before 22nd March 2006, and
- (b) immediately before 22nd March 2006, the property then comprised in the settlement was property in which a person other than E was beneficially entitled to an interest in possession (“the previous interest”).
- (3) Condition 2 is that the previous interest came to an end on or after 6th April 2008 on the death of that other person (“F”).
- (4) Condition 3 is that, immediately before F died, F was the spouse or civil partner of E.
- (5) Condition 4 is that E became beneficially entitled to the successor interest on F's death.
- (6) Condition 5 is that—
- (a) section 71A below does not apply to the property in which the successor interest subsists, and
- (b) the successor interest is not a disabled person's interest.
##### 49E
- (1) Where—
- (a) a person (“C”) is beneficially entitled to an interest in possession in settled property (“the present interest”), and
- (b) on C's becoming beneficially entitled to the present interest, the settled property consisted of, or included, rights under a contract of life insurance entered into before 22nd March 2006,
the present interest so far as subsisting in rights under the contract, or in property comprised in the settlement that directly or indirectly represents rights under the contract, is a “*transitional serial interest*” for the purposes of this Chapter if the following conditions are met.
- (2) Condition 1 is that—
- (a) the settlement commenced before 22nd March 2006, and
- (b) immediately before 22nd March 2006—
- (i) the property then comprised in the settlement consisted of, or included, rights under the contract, and
- (ii) those rights were property in which C, or some other person, was beneficially entitled to an interest in possession (“the earlier interest”).
- (3) Condition 2 is that—
- (a) the earlier interest came to an end at a time on or after 6th April 2008 (“the earlier-interest end-time”) on the death of the person beneficially entitled to it and C became beneficially entitled to the present interest—
- (i) at the earlier-interest end-time, or
- (ii) on the coming to an end, on the death of the person beneficially entitled to it, of an interest in possession to which that person became beneficially entitled at the earlier-interest end-time, or
- (iii) on the coming to an end of the second or last in an unbroken sequence of two or more consecutive interests in possession to the first of which a person became beneficially entitled at the earlier-interest end-time and each of which ended on the death of the person beneficially entitled to it, or
- (b) C became beneficially entitled to the present interest—
- (i) on the coming to an end, on the death of the person entitled to it, of an interest in possession that is a transitional serial interest under section 49C above, or
- (ii) on the coming to an end of the second or last in an unbroken sequence of two or more consecutive interests in possession the first of which was a transitional serial interest under section 49C above and each of which ended on the death of the person beneficially entitled to it.
- (4) Condition 3 is that rights under the contract were comprised in the settlement throughout the period beginning with 22nd March 2006 and ending with C's becoming beneficially entitled to the present interest.
- (5) Condition 4 is that—
- (a) section 71A below does not apply to the property in which the present interest subsists, and
- (b) the present interest is not a disabled person's interest.
##### 54A
- (1) If the circumstances fall within subsection (2) below, this section applies to any chargeable transfer made—
- (a) under section 52 above, on the coming to an end of an interest in possession in settled property during the life of the person beneficially entitled to it, or
- (b) on the death of a person beneficially entitled to an interest in possession in settled property;
and in the following provisions of this section the interest in possession mentioned in paragraph (a) or paragraph (b) above is referred to as “*the relevant interest*”.
- (2) The circumstances referred to in subsection (1) above are—
- (a) that the whole or part of the value transferred by the transfer is attributable to property in which the relevant interest subsisted and which became settled property in which there subsisted an interest in possession (whether the relevant interest or any previous interest) on the making by the settlor of a potentially exempt transfer at any time on or after 17th March 1987 and within the period of seven years ending with the date of the chargeable transfer; and
- (b) that the settlor is alive at the time when the relevant interest comes to an end; and
- (c) that, on the coming to an end of the relevant interest, any of the property in which that interest subsisted becomes settled property in which no qualifying interest in possession (as defined in section 59 below) subsists, other than property to which section 71 below applies; and
- (d) that, within six months of the coming to an end of the relevant interest, any of the property in which that interest subsisted has neither—
- (i) become settled property in which a qualifying interest in possession subsists or to which section 71 below applies, nor
- (ii) become property to which an individual is beneficially entitled.
- (3) In the following provisions of this section “*the special rate property*”, in relation to a chargeable transfer to which this section applies, means the property in which the relevant interest subsisted or, in a case where—
- (a) any part of that property does not fall within subsection (2)(a) above, or
- (b) any part of that property does not become settled property of the kind mentioned in subsection (2)(c) above,
so much of that property as appears to the Board or, on appeal, to the Special Commissioners to be just and reasonable.
- (4) Where this section applies to a chargeable transfer (in this section referred to as “*the relevant transfer*”), the tax chargeable on the value transferred by the transfer shall be whichever is the greater of the tax that would have been chargeable apart from this section and the tax determined in accordance with subsection (5) below.
- (5) The tax determined in accordance with this subsection is the aggregate of—
- (a) the tax that would be chargeable on a chargeable transfer of the description specified in subsection (6) below, and
- (b) so much (if any) of the tax that would, apart from this section, have been chargeable on the value transferred by the relevant transfer as is attributable to the value of property other than the special rate property.
- (6) The chargeable transfer postulated in subsection (5)(a) above is one—
- (a) the value transferred by which is equal to the value transferred by the relevant transfer or, where only part of that value is attributable to the special rate property, that part of that value;
- (b) which is made at the time of the relevant transfer by a transferor who has in the preceding seven years made chargeable transfers having an aggregate value equal to the aggregate of the values transferred by any chargeable transfers made by the settlor in the period of seven years ending with the date of the potentially exempt transfer; and
- (c) for which the applicable rate or rates are one-half of the rate or rates referred to in section 7(1) above.
- (7) This section has effect subject to section 54B below.
##### 54B
- (1) The death of the settlor, at any time after a chargeable transfer to which section 54A above applies, shall not increase the tax chargeable on the value transferred by the transfer unless, at the time of the transfer, the tax determined in accordance with subsection (5) of that section is greater than the tax that would be chargeable apart from that section.
- (2) The death of the person who was beneficially entitled to the relevant interest, at any time after a chargeable transfer to which section 54A above applies, shall not increase the tax chargeable on the value transferred by the transfer unless, at the time of the transfer, the tax that would be chargeable apart from that section is greater than the tax determined in accordance with subsection (5) of that section.
- (3) Where the tax chargeable on the value transferred by a chargeable transfer to which section 54A above applies falls to be determined in accordance with subsection (5) of that section, the amount referred to in paragraph (a) of that subsection shall be treated for the purposes of this Act as tax attributable to the value of the property in which the relevant interest subsisted.
- (4) Subsection (5) below shall apply if—
- (a) during the period of seven years preceding the date on which a chargeable transfer to which section 54A above applies (“the current transfer”) is made, there has been another chargeable transfer to which that section applied, and
- (b) the person who is for the purposes of the current transfer the settlor mentioned in subsection (2)(a) of that section is the settlor for the purposes of the other transfer (whether or not the settlements are the same);
and in subsections (5) and (6) below the other transfer is referred to as the “*previous transfer*”.
- (5) Where this subsection applies, the appropriate amount in relation to the previous transfer (or, if there has been more than one previous transfer, the aggregate of the appropriate amounts in relation to each) shall, for the purposes of calculating the tax chargeable on the current transfer, be taken to be the value transferred by a chargeable transfer made by the settlor immediately before the potentially exempt transfer was made.
- (6) In subsection (5) above “*the appropriate amount*”, in relation to a previous transfer, means so much of the value transferred by the previous transfer as was attributable to the value of property which was the special rate property in relation to that transfer.
- (7) In this section—
- “*the relevant interest*” has the meaning given by subsection (1) of section 54A above; and
- “*the special rate property*” has the meaning given by subsection (3) of that section.
##### 55A
- (1) Where a person makes a disposition by which he acquires a settlement power for consideration in money or money’s worth—
- (a) section 10(1) above shall not apply to the disposition;
- (b) the person shall be taken for the purposes of this Act to make a transfer of value;
- (c) the value transferred shall be determined without bringing into account the value of anything which the person acquires by the disposition; and
- (d) sections 18 and 23 to 27 above shall not apply in relation to that transfer of value.
- (2) For the purposes of this section, a person acquires a settlement power if he becomes entitled—
- (a) to a settlement power,
- (b) to exercise, or to secure or prevent the exercise of, a settlement power (whether directly or indirectly), or
- (c) to restrict, or secure a restriction on, the exercise of a settlement power (whether directly or indirectly),
as a result of transactions which include a disposition (whether to him or another) of a settlement power or of any power of a kind described in paragraph (b) or (c) above which is exercisable in relation to a settlement power.
##### 57A
- (1) Subject to the following provisions, subsection (2) below applies where—
- (a) a person dies who immediately before his death was beneficially entitled to an interest in possession in property comprised in a settlement, and
- (b) within two years after his death the property becomes held on trusts (whether of that or another settlement) by virtue of which a direction under paragraph 1 of Schedule 4 to this Act is given in respect of the property.
- (2) Where this subsection applies, this Act shall have effect as if the property had on the death of the deceased become subject to the trusts referred to in subsection (1)(b) above; and accordingly no disposition or other event occurring between the date of the death and the date on which the property becomes subject to those trusts shall, so far as it relates to the property, be a transfer of value or otherwise constitute an occasion for a charge to tax.
- (3) Where property becomes held on trusts of the kind specified in paragraph (b) of subsection (1) above as the result of proceedings before a court and could not have become so held without such proceedings, that paragraph shall have effect as if it referred to three years instead of two.
- (4) Subsection (2) above shall not apply if—
- (a) the disposition by which the property becomes held on the trusts referred to in subsection (1)(b) above depends on a condition or is defeasible; or
- (b) the property which becomes held on those trusts is itself an interest in settled property; or
- (c) the trustees who hold the property on those trusts have, for a consideration in money or money’s worth, acquired an interest under a settlement in which the property was comprised immediately before the death of the person referred to in subsection (1)(a) above or at any time thereafter; or
- (d) the property which becomes held on those trusts does so for a consideration in money or money’s worth, or is acquired by the trustees for such a consideration, or has at any time since the death of the person referred to in subsection (1)(a) above been acquired by any other person for such a consideration.
- (5) If the value of the property when it becomes held on the trusts referred to in subsection (1)(b) above is lower than so much of the value transferred on the death of the person referred to in subsection (1)(a) as is attributable to the property, subsection (2) above shall apply to the property only to the extent of the lower value.
- (6) For the purposes of this section, a person shall be treated as acquiring property for a consideration in money or money’s worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property. ]
#### Qualifying interest in possession.
##### 71A
- (1) This section applies to settled property (including property settled before 22nd March 2006) if—
- (a) it is held on statutory trusts for the benefit of a bereaved minor under sections 46 and 47(1) of the Administration of Estates Act 1925 (succession on intestacy and statutory trusts in favour of issue of intestate), or
- (b) it is held on trusts for the benefit of a bereaved minor and subsection (2) below applies to the trusts,
but this section does not apply to property in which a disabled person's interest subsists.
- (2) This subsection applies to trusts—
- (a) established under the will of a deceased parent of the bereaved minor, or
- (b) established under the Criminal Injuries Compensation Scheme,
which secure that the conditions in subsection (3) below are met.
- (3) Those conditions are—
- (a) that the bereaved minor, if he has not done so before attaining the age of 18, will on attaining that age become absolutely entitled to—
- (i) the settled property,
- (ii) any income arising from it, and
- (iii) any income that has arisen from the property held on the trusts for his benefit and been accumulated before that time,
- (b) that, for so long as the bereaved minor is living and under the age of 18, if any of the settled property is applied for the benefit of a beneficiary, it is applied for the benefit of the bereaved minor, and
- (c) that, for so long as the bereaved minor is living and under the age of 18, either—
- (i) the bereaved minor is entitled to all of the income (if there is any) arising from any of the settled property, or
- (ii) no such income may be applied for the benefit of any other person.
- (4) Trusts such as are mentioned in paragraph (a) or (b) of subsection (2) above are not to be treated as failing to secure that the conditions in subsection (3) above are met by reason only of—
- (a) the trustees' having the powers conferred by section 32 of the Trustee Act 1925 (powers of advancement),
- (b) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by proviso (a) of subsection (1) of that section,
- (c) the trustees' having the powers conferred by section 33 of the Trustee Act (Northern Ireland) 1958 (corresponding provision for Northern Ireland),
- (d) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by subsection (1)(a) of that section, or
- (e) the trustees' having powers to the like effect as the powers mentioned in any of paragraphs (a) to (d) above.
- (5) In this section “*the Criminal Injuries Compensation Scheme*” means—
- (a) the schemes established by arrangements made under the Criminal Injuries Compensation Act 1995,
- (b) arrangements made by the Secretary of State for compensation for criminal injuries in operation before the commencement of those schemes, and
- (c) the scheme established under the Criminal Injuries Compensation (Northern Ireland) Order 2002.
- (6) The preceding provisions of this section apply in relation to Scotland as if, in subsection (2) above, before “which” there were inserted the purposes of.
##### 71B
- (1) Subject to subsections (2) and (3) below, there shall be a charge to tax under this section—
- (a) where settled property ceases to be property to which section 71A above applies, and
- (b) in a case where paragraph (a) above does not apply, where the trustees make a disposition as a result of which the value of settled property to which section 71A above applies is less than it would be but for the disposition.
- (2) Tax is not charged under this section where settled property ceases to be property to which section 71A applies as a result of—
- (a) the bereaved minor attaining the age of 18 or becoming, under that age, absolutely entitled as mentioned in section 71A(3)(a) above, or
- (b) the death under that age of the bereaved minor, or
- (c) being paid or applied for the advancement or benefit of the bereaved minor.
- (3) Subsections (3) to (8) and (10) of section 70 above apply for the purposes of this section as they apply for the purposes of that section, but—
- (a) with the substitution of a reference to subsection (1)(b) above for the reference in subsection (4) of section 70 above to subsection (2)(b) of that section,
- (b) with the substitution of a reference to property to which section 71A above applies for each of the references in subsections (3), (5) and (8) of section 70 above to property to which that section applies,
- (c) as if, for the purposes of section 70(8) above as applied by this subsection, property—
- (i) which is property to which section 71A above applies,
- (ii) which, immediately before it became property to which section 71A above applies, was property to which section 71 above applied, and
- (iii) which, by the operation of section 71(1B) above, ceased on that occasion to be property to which section 71 above applied,
had become property to which section 71A above applies not on that occasion but on the occasion (or last occasion) before then when it became property to which section 71 above applied, and
- (d) as if, for the purposes of section 70(8) above as applied by this subsection, property—
- (i) which is property to which section 71A above applies,
- (ii) which, immediately before it became property to which section 71A above applies, was property to which section 71D below applied, and
- (iii) which, by the operation of section 71D(5)(a) below, ceased on that occasion (“the 71D-to-71A occasion”) to be property to which section 71D below applied,
had become property to which section 71A above applies not on the 71D-to-71A occasion but on the relevant earlier occasion.
- (4) In subsection (3)(d) above—
- (a) “*the relevant earlier occasion*” means the occasion (or last occasion) before the 71D-to-71A occasion when the property became property to which section 71D below applied, but
- (b) if the property, when it became property to which section 71D below applied, ceased at the same time to be property to which section 71 above applied without ceasing to be settled property, “*the relevant earlier occasion*” means the occasion (or last occasion) when the property became property to which section 71 above applied.
##### 71C
In sections 71A and 71B above “*bereaved minor*” means a person—
- (a) who has not yet attained the age of 18, and
- (b) at least one of whose parents has died.
##### 71D
- (1) This section applies to settled property (including property settled before 22nd March 2006), but subject to subsection (5) below, if—
- (a) the property is held on trusts for the benefit of a person who has not yet attained the age of 25,
- (b) at least one of the person's parents has died, and
- (c) subsection (2) below applies to the trusts.
- (2) This subsection applies to trusts—
- (a) established under the will of a deceased parent of the person mentioned in subsection (1)(a) above, or
- (b) established under the Criminal Injuries Compensation Scheme,
which secure that the conditions in subsection (6) below are met.
- (3) Subsection (4) has effect where—
- (a) at any time on or after 22nd March 2006 but before 6th April 2008, or on the coming into force of paragraph 3(1) of Schedule 20 to the Finance Act 2006, any property ceases to be property to which section 71 above applies without ceasing to be settled property, and
- (b) immediately after the property ceases to be property to which section 71 above applies—
- (i) it is held on trusts for the benefit of a person who has not yet attained the age of 25, and
- (ii) the trusts secure that the conditions in subsection (6) below are met.
- (4) From the time when the property ceases to be property to which section 71 above applies, but subject to subsection (5) below, this section applies to the property (if it would not apply to the property by virtue of subsection (1) above) for so long as—
- (a) the property continues to be settled property held on trusts such as are mentioned in subsection (3)(b)(i) above, and
- (b) the trusts continue to secure that the conditions in subsection (6) below are met.
- (5) This section does not apply—
- (a) to property to which section 71A above applies,
- (b) to property to which section 71 above, or section 89 below, applies, or
- (c) to settled property if a person is beneficially entitled to an interest in possession in the settled property and—
- (i) the person became beneficially entitled to the interest in possession before 22nd March 2006, or
- (ii) the interest in possession is an immediate post-death interest, or a transitional serial interest, and the person became beneficially entitled to it on or after 22nd March 2006.
- (6) Those conditions are—
- (a) that the person mentioned in subsection (1)(a) or (3)(b)(i) above (“B”), if he has not done so before attaining the age of 25, will on attaining that age become absolutely entitled to—
- (i) the settled property,
- (ii) any income arising from it, and
- (iii) any income that has arisen from the property held on the trusts for his benefit and been accumulated before that time,
- (b) that, for so long as B is living and under the age of 25, if any of the settled property is applied for the benefit of a beneficiary, it is applied for the benefit of B, and
- (c) that, for so long as B is living and under the age of 25, either—
- (i) B is entitled to all of the income (if there is any) arising from any of the settled property, or
- (ii) no such income may be applied for the benefit of any other person.
- (7) For the purposes of this section, trusts are not to be treated as failing to secure that the conditions in subsection (6) above are met by reason only of—
- (a) the trustees' having the powers conferred by section 32 of the Trustee Act 1925 (powers of advancement),
- (b) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by proviso (a) of subsection (1) of that section,
- (c) the trustees' having the powers conferred by section 33 of the Trustee Act (Northern Ireland) 1958 (corresponding provision for Northern Ireland),
- (d) the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by subsection (1)(a) of that section, or
- (e) the trustees' having powers to the like effect as the powers mentioned in any of paragraphs (a) to (d) above.
- (8) In this section “*the Criminal Injuries Compensation Scheme*” means—
- (a) the schemes established by arrangements made under the Criminal Injuries Compensation Act 1995,
- (b) arrangements made by the Secretary of State for compensation for criminal injuries in operation before the commencement of those schemes, and
- (c) the scheme established under the Criminal Injuries Compensation (Northern Ireland) Order 2002.
- (9) The preceding provisions of this section apply in relation to Scotland—
- (a) as if, in subsection (2) above, before “which” there were inserted the purposes of, and
- (b) as if, in subsections (3)(b)(ii) and (4)(b) above, before “trusts” there were inserted purposes of the.
##### 71E
- (1) Subject to subsections (2) to (4) below, there shall be a charge to tax under this section—
- (a) where settled property ceases to be property to which section 71D above applies, or
- (b) in a case where paragraph (a) above does not apply, where the trustees make a disposition as a result of which the value of the settled property to which section 71D above applies is less than it would be but for the disposition.
- (2) Tax is not charged under this section where settled property ceases to be property to which section 71D above applies as a result of—
- (a) B becoming, at or under the age of 18, absolutely entitled as mentioned in section 71D(6)(a) above,
- (b) the death, under the age of 18, of B,
- (c) becoming, at a time when B is living and under the age of 18, property to which section 71A above applies, or
- (d) being paid or applied for the advancement or benefit of B—
- (i) at a time when B is living and under the age of 18, or
- (ii) on B's attaining the age of 18.
- (3) Tax is not charged under this section in respect of—
- (a) a payment of costs or expenses (so far as they are fairly attributable to property to which section 71D above applies), or
- (b) a payment which is (or will be) income of any person for any of the purposes of income tax or would for any of those purposes be income of a person not resident in the United Kingdom if he were so resident,
or in respect of a liability to make such a payment.
- (4) Tax is not charged under this section by virtue of subsection (1)(b) above if the disposition is such that, were the trustees beneficially entitled to the settled property, section 10 or section 16 above would prevent the disposition from being a transfer of value.
- (5) For the purposes of this section the trustees shall be treated as making a disposition if they omit to exercise a right (unless it is shown that the omission was not deliberate) and the disposition shall be treated as made at the time or latest time when they could have exercised the right.
##### 71F
- (1) Where—
- (a) tax is charged under section 71E above by reason of the happening of an event within subsection (2) below, and
- (b) that event happens after B has attained the age of 18,
the tax is calculated in accordance with this section.
- (2) Those events are—
- (a) B becoming absolutely entitled as mentioned in section 71D(6)(a) above,
- (b) the death of B, and
- (c) property being paid or applied for the advancement or benefit of B.
- (3) The amount of the tax is given by—
$Chargeableamount×Relevantfraction×Settlement rate$
- (4) For the purposes of subsection (3) above, the “Chargeable amount” is—
- (a) the amount by which the value of property which is comprised in the settlement and to which section 71D above applies is less immediately after the event giving rise to the charge than it would be but for the event, or
- (b) where the tax is payable out of settled property to which section 71D above applies immediately after the event, the amount which, after deducting the tax, is equal to the amount on which tax would be charged by virtue of paragraph (a) above.
- (5) For the purposes of subsection (3) above, the “Relevant fraction” is three tenths multiplied by so many fortieths as there are complete successive quarters in the period—
- (a) beginning with the day on which B attained the age of 18 or, if later, the day on which the property became property to which section 71D above applies, and
- (b) ending with the day before the occasion of the charge.
- (6) Where the whole or part of the Chargeable amount is attributable to property that was excluded property at any time during the period mentioned in subsection (5) above then, in determining the “*Relevant fraction*” in relation to that amount or part, no quarter throughout which that property was excluded property shall be counted.
- (7) For the purposes of subsection (3) above, the “Settlement rate” is the effective rate (that is to say, the rate found by expressing the tax chargeable as a percentage of the amount on which it is charged) at which tax would be charged on the value transferred by a chargeable transfer of the description specified in subsection (8) below.
- (8) The chargeable transfer postulated in subsection (7) above is one—
- (a) the value transferred by which is equal to an amount determined in accordance with subsection (9) below,
- (b) which is made at the time of the charge to tax under section 71E above by a transferor who has in the period of seven years ending with the day of the occasion of the charge made chargeable transfers having an aggregate value equal to that of any chargeable transfers made by the settlor in the period of seven years ending with the day on which the settlement commenced, disregarding transfers made on that day, and
- (c) on which tax is charged in accordance with section 7(2) above.
- (9) The amount referred to in subsection (8)(a) above is equal to the aggregate of—
- (a) the value, immediately after the settlement commenced, of the property then comprised in it,
- (b) the value, immediately afer a related settlement commenced, of the property then comprised in it, and
- (c) the value, immediately after it became comprised in the settlement, of any property which became so comprised after the settlement commenced and before the occasion of the charge under section 71E above (whether or not it has remained so comprised).
##### 71G
- (1) Where—
- (a) tax is charged under section 71E above, and
- (b) the tax does not fall to be calculated in accordance with section 71F above,
the tax is calculated in accordance with this section.
- (2) The amount on which the tax is charged is—
- (a) the amount by which the value of property which is comprised in the settlement and to which section 71D above applies is less immediately after the event giving rise to the charge than it would be but for the event, or
- (b) where the tax is payable out of settled property to which section 71D above applies immediately after the event, the amount which, after deducting the tax, is equal to the amount on which tax would be charged by virtue of paragraph (a) above.
- (3) The rate at which the tax is charged is the rate that would be given by subsections (6) to (8) of section 70 above—
- (a) if the reference to section 70 above in subsection (8)(a) of that section were a reference to section 71D above,
- (b) if the other references in those subsections to section 70 above were references to section 71E above, and
- (c) if, for the purposes of section 70(8) above, property—
- (i) which is property to which section 71D above applies,
- (ii) which, immediately before it became property to which section 71D above applies, was property to which section 71 applied, and
- (iii) which ceased on that occasion to be property to which section 71 above applied without ceasing to be settled property,
had become property to which section 71D above applies not on that occasion but on the occasion (or last occasion) before then when it became property to which section 71 above applied.
##### 71H
- (1) In sections 71A to 71G above “*parent*” includes step-parent.
- (2) For the purposes of sections 71A to 71G above, a deceased individual (“D”) shall be taken to have been a parent of another individual (“Y”) if, immediately before D died, D had—
- (a) parental responsibility for Y under the law of England and Wales,
- (b) parental responsibilities in relation to Y under the law of Scotland, or
- (c) parental responsibility for Y under the law of Northern Ireland.
- (3) In subsection (2)(a) above “*parental responsibility*” has the same meaning as in the Children Act 1989.
- (4) In subsection (2)(b) above “*parental responsibilities*” has the meaning given by section 1(3) of the Children (Scotland) Act 1995.
- (5) In subsection (2)(c) above “*parental responsibility*” has the same meaning as in the Children (Northern Ireland) Order 1995.
##### 79A
- (1) An undertaking given under section 78 or 79 above may be varied from time to time by agreement between the Board and the person bound by the undertaking.
- (2) Where a Special Commissioner is satisfied that—
- (a) the Board have made a proposal for the variation of such an undertaking to the person bound by the undertaking,
- (b) that person has failed to agree to the proposed variation within six months after the date on which the proposal was made, and
- (c) it is just and reasonable, in all the circumstances, to require the proposed variation to be made,
the Commissioner may direct that the undertaking is to have effect from a date specified by him as if the proposed variation had been agreed to by the person bound by the undertaking.
- (3) The date specified by the Special Commissioner must not be less than sixty days after the date of his direction.
- (4) A direction under this section shall not take effect if, before the date specified by the Special Commissioner, a variation different from that to which the direction relates is agreed between the Board and the person bound by the undertaking.
##### 81A
- (1) Where a reversionary interest in relevant property to which—
- (a) a person who acquired it for a consideration in money or money's worth, or
- (b) the settlor or the spouse or civil partner of the settlor,
(a “relevant reversioner”) is beneficially entitled comes to an end by reason of the relevant reversioner becoming entitled to an interest in possession in the relevant property, the relevant reversioner is to be treated as having made a disposition of the reversionary interest at that time.
- (2) A transfer of value of a reversionary interest in relevant property to which a relevant reversioner is beneficially entitled is to be taken to be a transfer which is not a potentially exempt transfer.
##### 89A
- (1) This section applies to property transferred by a person (“A”) into settlement on or after 22nd March 2006 if—
- (a) A was beneficially entitled to the property immediately before transferring it into settlement,
- (b) A satisfies the Commissioners for Her Majesty's Revenue and Customs that, when the property was transferred into settlement, A had a condition that it was at that time reasonable to expect would have such effects on A as to lead to A becoming—
- (i) a person falling within section 89(4)(a) above,
- (ii) in receipt of an attendance allowance mentioned in section 89(4)(b) above, or
- (iii) in receipt of a disability living allowance mentioned in section 89(4)(c) above by virtue of entitlement to the care component at the highest or middle rate, and
- (c) the property is held on trusts—
- (i) under which, during the life of A, no interest in possession in the settled property subsists, and
- (ii) which secure that Conditions 1 and 2 are met.
- (2) Condition 1 is that if any of the settled property is applied during A's life for the benefit of a beneficiary, it is applied for the benefit of A.
- (3) Condition 2 is that any power to bring the trusts mentioned in subsection (1)(c) above to an end during A's life is such that, in the event of the power being exercised during A's life, either—
- (a) A or another person will, on the trusts being brought to an end, be absolutely entitled to the settled property, or
- (b) on the trusts being brought to an end, a disabled person's interest within section 89B(1)(a) or (c) below will subsist in the settled property.
- (4) If this section applies to settled property transferred into settlement by a person, the person shall be treated as beneficially entitled to an interest in possession in the settled property.
- (5) For the purposes of subsection (1)(b)(ii) above, assume—
- (a) that A will meet the conditions as to residence under section 64(1) of whichever of the 1992 Acts is applicable, and
- (b) that there will be no provision made by regulations under section 67(1) and (2) of that Act.
- (6) For the purposes of subsection (1)(b)(iii) above, assume—
- (a) that A will meet the prescribed conditions as to residence under section 71(6) of whichever of the 1992 Acts is applicable, and
- (b) that there will be no provision made by regulations under section 72(8) of that Act.
- (7) For the purposes of subsection (3) above, ignore—
- (a) power to give directions as to the settled property that is exercisable jointly by the persons who between them are entitled to the entire beneficial interest in the property, and
- (b) anything that could occur as a result of exercise of any such power.
- (8) In this section “*the 1992 Acts*” means—
- the Social Security Contributions and Benefits Act 1992, and
- the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
##### 89B
- (1) In this Act “*disabled person's interest*” means—
- (a) an interest in possession to which a person is under section 89(2) above treated as beneficially entitled,
- (b) an interest in possession to which a person is under section 89A(4) above treated as beneficially entitled,
- (c) an interest in possession in settled property (other than an interest within paragraph (a) or (b) above) to which a disabled person becomes beneficially entitled on or after 22nd March 2006, or
- (d) an interest in possession in settled property (other than an interest within paragraph (a) or (b) above) to which a person (“A”) is beneficially entitled if—
- (i) A is the settlor,
- (ii) A was beneficially entitled to the property immediately before transferring it into settlement,
- (iii) A satisfies Her Majesty's Commissioners for Revenue and Customs as mentioned in section 89A(1)(b) above,
- (iv) the settled property was transferred into settlement on or after 22nd March 2006, and
- (v) the trusts on which the settled property is held secure that, if any of the settled property is applied during A's life for the benefit of a beneficiary, it is applied for the benefit of A.
- (2) Subsections (4) to (6) of section 89 above (meaning of “disabled person” in subsection (1) of that section) have effect for the purposes of subsection (1)(c) above as they have effect for the purposes of subsection (1) of that section.
- (3) Section 71D above does not apply to property in which there subsists a disabled person's interest within subsection (1)(c) above (but see also section 71D(5) above).
#### Rate of ten-yearly charge.
##### 109A
##### 113A
- (1) Where any part of the value transferred by a potentially exempt transfer which proves to be a chargeable transfer would (apart from this section) be reduced in accordance with the preceding provisions of this Chapter, it shall not be so reduced unless the conditions in subsection (3) below are satisfied.
- (2) Where—
- (a) any part of the value transferred by any chargeable transfer, other than a potentially exempt transfer, is reduced in accordance with the preceding provisions of this Chapter, and
- (b) the transfer is made within seven years of the death of the transferor,
then, unless the conditions in subsection (3) below are satisfied, the additional tax chargeable by reason of the death shall be calculated as if the value transferred had not been so reduced.
- (3) The conditions referred to in subsections (1) and (2) above are—
- (a) that the original 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; and
- (b) except to the extent that the original property consists of shares or securities to which subsection (3A) below applies that, in relation to a notional transfer of value made by the transferee immediately before the death, the original property would (apart from section 106 above) be relevant business property.
- (3A) This subsection applies to shares or securities—
- (a) which were quoted at the time of the chargeable transfer referred to in subsection (1) or subsection (2) above; or
- (b) which fell within paragraph (b) or (bb) of section 105(1) above in relation to that transfer and were unquoted throughout the period referred to in subsection (3)(a) above.
- (3B) In subsection (3A) above “*quoted*”, in relation to any shares or securities, means listed on a recognised stock exchange and “*unquoted*”, in relation to any shares or securities, means not so listed.
- (4) If the transferee has died before the transferor, the reference in subsection (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) If the conditions in subsection (3) above are satisfied only with respect to part of the original property, then,—
- (a) in a case falling within subsection (1) above, only a proportionate part of so much of the value transferred as is attributable to the original property shall be reduced in accordance with the preceding provisions of this Chapter, and
- (b) in a case falling within subsection (2) above, the additional tax shall be calculated as if only a proportionate part of so much of the value transferred as was attributable to the original property had been so reduced.
- (6) Where any shares owned by the transferee immediately before the death in question—
- (a) would under any of the provisions of sections 126 to 136 of the 1992 Act be identified with the original property (or part of it), or
- (b) were issued to him in consideration of the transfer of a business or interest in a business consisting of the original property (or part of it),
they shall be treated for the purposes of this section as if they were the original property (or that part of it).
- (7) This section has effect subject to section 113B below.
- (7A) The provisions of this Chapter for the reduction of value transferred shall be disregarded in any determination for the purposes of this section of whether there is a potentially exempt or chargeable transfer in any case.
- (8) In this section—
- “*the original property*” means the property which was relevant business property in relation to the chargeable transfer referred to in subsection (1) or subsection (2) above; and
- “*the transferee*” means the person whose property the original property became on that chargeable transfer or, where on the transfer the original property became or remained settled property 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.
##### 113B
- (1) Subject to subsection (2) below, this section applies where—
- (a) the transferee has disposed of all or part of the original property before the death of the transferor; and
- (b) the whole of the consideration received by him for the disposal has been applied by him in acquiring other property (in this section referred to as “*the replacement property*”).
- (2) This section does not apply unless—
- (a) the replacement property is acquired, or a binding contract for its acquisition is entered into, within the allowed period after the disposal of the original property (or, as the case may be, the part concerned); and
- (b) the disposal and acquisition are both made in transactions at arm’s length or on terms such as might be expected to be included in a transaction at arm’s length.
- (3) Where this section applies, the conditions in section 113A(3) above shall be taken to be satisfied in relation to the original property (or, as the case may be, the part concerned) if—
- (a) the replacement property is owned by the transferee immediately before the death of the transferor; and
- (b) throughout the period beginning with the date of the chargeable transfer and ending with the death (disregarding any period between the disposal and acqusition) either the original property or the replacement property was owned by transferee; and
- (c) in relation to a notional transfer of value made by the transferee immediately before the death, the replacement property would (apart from section 106 above) be relevant business property.
- (4) If the transferee has died before the transferor, any reference in subsections (1) to (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) In any case where—
- (a) all or part of the original property has been disposed of before the death of the transferor or is excluded by section 113 above from being relevant business property in relation to the notional transfer of value referred to in section 113A(3)(b) above, and
- (b) the replacement property is acquired, or a binding contract for its acquisition is entered into, after the death of the transferor but within the allowed period after the disposal of the original property or part, and
- (c) the transferor dies before the transferee,
subsection (3) above shall have effect with the omission of paragraph (a), and as if any reference to a time immediately before the death of the transferor or to the death were a reference to the time when the replacement property is acquired.
- (6) Section 113A(6) above shall have effect in relation to the replacement property as it has effect in relation to the original property.
- (7) Where a binding contract for the disposal of any property is entered into at any time before the disposal of the property, the disposal shall be regarded for the purposes of subsections (2)(a) and (5)(b) above as taking place at that time.
- (8) In this section “*the original property*” and “*the transferee*” have the same meaning as in section 113A above and “*allowed period*” means the period of three years or such longer period as the Board may allow.
##### 124A
- (1) Where any part of the value transferred by a potentially exempt transfer which proves to be a chargeable transfer would (apart from this section) be reduced in accordance with the preceding provisions of this Chapter, it shall not be so reduced unless the conditions in subsection (3) below are satisfied.
- (2) Where—
- (a) any part of the value transferred by any chargeable transfer, other than a potentially exempt transfer, is reduced in accordance with the preceding provisions of this Chapter, and
- (b) the transfer is made within seven years of the death of the transferor,
then, unless the conditions in subsection (3) below are satisfied, the additional tax chargeable by reason of the death shall be calculated as if the value transferred had not been so reduced.
- (3) The conditions referred to in subsections (1) and (2) above are—
- (a) that the original 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 (in this subsection referred to as “*the relevant period*”) and it is not at the time of the death subject to a binding contract for sale; and
- (b) except in a case falling within paragraph (c) below, that the original property is agricultural property immediately before the death and has been occupied (by the transferee or another) for the purposes of agriculture throughout the relevant period; and
- (c) where the original property consists of shares in or securities of a company, that throughout the relevant period the agricultural property to which section 116 above applied by virtue of section 122(1) above on the chargeable transfer was owned by the company and occupied (by the company or another) for the purposes of agriculture.
- (4) If the transferee has died before the transferor, the reference in subsection (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) If the conditions in subsection (3) above are satisfied only with respect to part of the original property, then,—
- (a) in a case falling within subsection (1) above, only a proportionate part of so much of the value transferred as is attributable to the original property shall be reduced in accordance with the preceding provisions of this Chapter, and
- (b) in a case falling within subsection (2) above, the additional tax shall be calculated as if only a proportionate part of so much of the value transferred as was attributable to the original property had been so reduced.
- (6) Where any shares owned by the transferee immediately before the death in question—
- (a) would under any of the provisions of sections 126 to 136 of the 1992 Act be identified with the original property (or part of it), or
- (b) were issued to him in consideration of the transfer of agricultural property consisting of the original property (or part of it),
his period of ownership of the original property shall be treated as including his period of ownership of the shares.
- (7) This section has effect subject to section 124B below.
- (7A) The provisions of this Chapter for the reduction of value transferred shall be disregarded in any determination for the purposes of this section of whether there is a potentially exempt or chargeable transfer in any case.
- (8) In this section—
- “*the original property*” means the property which, in relation to the chargeable transfer referred to in subsection (1) or subsection (2) above, was either agricultural property to which section 116 above applied or shares or securities of a company owning agricultural property to which that section applied by virtue of section 122(1) above; and
- “*the transferee*” means the person whose property the original property became on that chargeable transfer or, where on the transfer the original property became or remained settled property 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.
##### 124B
- (1) Subject to subsection (2) below, this section applies where—
- (a) the transferee has disposed of all or part of the original property before the death of the transferor; and
- (b) the whole of the consideration received by him for the disposal has been applied by him in acquiring other property (in this section referred to as “*the replacement property*”).
- (2) This section does not apply unless—
- (a) the replacement property is acquired, or a binding contract for its acquisition is entered into, within the allowed period after the disposal of the original property (or, as the case may be, the part concerned); and
- (b) the disposal and acquisition are both made in transactions at arm’s length or on terms such as might be expected to be included in a transaction at arm’s length.
- (3) Where this section applies, the conditions in section 124A(3) above shall be taken to be satisfied in relation to the original property (or, as the case may be, the part concerned) if—
- (a) the replacement property is owned by the transferee immediately before the death of the transferor and is not at that time subject to a binding contract for sale; and
- (b) throughout the period beginning with the date of the chargeable transfer and ending with the disposal, the original property was owned by the transferee and occupied (by the transferee or another) for the purposes of agriculture; and
- (c) throughout the period beginning with the date when the transferee acquired the replacement property and ending with the death, the replacement property was owned by the transferee and occupied (by the transferee or another) for the purposes of agriculture; and
- (d) the replacement property is agricultural property immediately before the death.
- (4) If the transferee has died before the transferor, any reference in subsections (1) to (3) above to the death of the transferor shall have effect as a reference to the death of the transferee.
- (5) In any case where—
- (a) all or part of the original property has been disposed of before the death of the transferor or is subject to a binding contract for sale at the time of the death, and
- (b) the replacement property is acquired, or a binding contract for its acquisition is entered into, after the death of the transferor but within the allowed period after the disposal of the original property or part, and
- (c) the transferor dies before the transferee,
subsection (3) above shall have effect with the omission of paragraphs (a) and (c), and as if any reference to a time immediately before the death of the transferor were a reference to the time when the replacement property is acquired.
- (6) Section 124A(6) above shall have effect in relation to the replacement property as it has effect in relation to the original property.
- (7) Where a binding contract for the disposal of any property is entered into at any time before the disposal of the property, the disposal shall be regarded for the purposes of subsections (2)(a) and (5)(b) above as taking place at that time.
- (8) In this section “*the original property*” and “*the transferee*” have the same meaning as in section 124A above and “*allowed period*” means the period of three years or such longer period as the Board may allow.
##### 124C
- (1) For the purposes of this Chapter, where any land is in a habitat scheme—
- (a) the land shall be regarded as agricultural land;
- (b) the management of the land in accordance with the requirements of the scheme shall be regarded as agriculture; and
- (c) buildings used in connection with such management shall be regarded as farm buildings.
- (2) For the purposes of this section land is in a habitat scheme at any time if—
- (a) an application for aid under one of the enactments listed in subsection (3) below has been accepted in respect of the land; and
- (b) the undertakings to which the acceptance relates have neither been terminated by the expiry of the period to which they relate nor been treated as terminated.
- (3) Those enactments are—
- (a) regulation 3(1) of the Habitat (Water Fringe) Regulations 1994;
- (b) the Habitat (Former Set-Aside Land) Regulations 1994;
- (c) the Habitat (Salt-Marsh) Regulations 1994;
- (d) the Habitats (Scotland) Regulations 1994, if undertakings in respect of the land have been given under regulation 3(2)(a) of those Regulations;
- (e) the Habitat Improvement Regulations (Northern Ireland) 1995, if an undertaking in respect of the land has been given under regulation 3(1)(a) of those Regulations.
- (4) The Treasury may by order made by statutory instrument amend the list of enactments in subsection (3) above.
- (5) The power to make an order under subsection (4) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.
- (6) This section has effect—
- (a) in relation to any transfer of value made on or after 26th November 1996; and
- (b) in relation to transfers of value made before that date, for the purposes of any charge to tax, or to extra tax, which arises by reason of an event occurring on or after 26th November 1996.
##### 151A
- (1) This section applies where a member of a registered pension scheme has an alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death.
- (2) In determining for the purposes of this Act the value of his estate immediately before his death he shall be treated as if he had been beneficially entitled to property with a value equal to the relevant amount.
- (3) The relevant amount is—
- (a) the aggregate of the amount of the sums and the value of the assets forming part of the member's alternatively secured pension fund immediately before his death, less
- (b) the aggregate of the amount of the sums and the value of the assets expended on dependants' benefits within the period of six months beginning with the end of the month in which his death occurs.
- (4) For this purpose sums or assets are expended on dependants' benefits at any time if they (or sums or assets directly or indirectly deriving from them) are at that time—
- (a) applied towards the provision of a dependants' scheme pension for a relevant dependant,
- (b) applied towards the provision of a dependants' annuity for a relevant dependant,
- (c) designated as available for the payment of dependants' unsecured pension to a relevant dependant, or
- (d) designated as available for the payment of dependants' alternatively secured pension to a relevant dependant,
or if the sums (or sums directly or indirectly deriving from the sums or assets) are at that time paid as a charity lump sum death benefit.
- (5) In this section—
- “*alternatively secured pension fund*” has the same meaning as in Part 4 of the Finance Act 2004 (see paragraph 11 of Schedule 28 to that Act);
- “*charity lump sum death benefit*” has the meaning given by paragraph 18 of Schedule 29 to that Act;
- “*dependants' alternatively secured pension*” has the meaning given by paragraph 19 of Schedule 28 to that Act;
- “*dependants' annuity*” has the same meaning as in Part 4 of that Act (see paragraph 17 of that Schedule);
- “*dependants' scheme pension*” has the same meaning as in that Part of that Act (see paragraph 16 of that Schedule);
- “*dependants' unsecured pension*” has the meaning given by paragraph 18 of that Schedule; and
- “*relevant dependant*”, in relation to a member of a registered pension scheme who dies, means a dependant (within the meaning of paragraph 15 of that Schedule) who—is the person's spouse or civil partner immediately before his death; oris financially dependent on the person at that time.
##### 151B
- (1) This section applies where—
- (a) a relevant dependant of a person who, immediately before his death, was a member of a registered pension scheme has a dependant's unsecured pension fund, or a dependant's alternatively secured pension fund, in respect of an arrangement under the pension scheme immediately before his death or immediately before ceasing to be a relevant dependant of the member,
- (b) the member had reached the age of 75 at the time of his death and had an alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death, and
- (c) sums or assets forming part of that fund were designated as available for the payment of dependants' unsecured pension, or dependants' alternatively secured pension, to the relevant dependant within the period of six months beginning with the end of the month in which the member's death occurs.
- (2) Where this section applies tax shall be charged under this section.
- (3) The amount on which tax is charged under this section shall be the aggregate of the amount of the sums and the value of the assets forming part of the dependant's unsecured pension fund, or the dependant's alternatively secured pension fund, in respect of the arrangement immediately before the relevant dependant died or ceased to be a relevant dependant of the member.
- (4) But where tax is chargeable under this section by reason of the death of the relevant dependant, that amount is reduced by so much of sums forming part of the dependant's unsecured pension fund, or the dependant's alternatively secured pension fund, (or sums directly or indirectly deriving from sums or assets forming part of that fund) as are paid to a charity within the period of six months beginning with the end of the month in which his death occurs.
- (5) Tax charged under this section shall be charged at the rate or rates at which it would have been charged on the death of the member if—
- (a) the amount mentioned in subsection (3) above (as reduced under subsection (4) above) had been included in the value transferred by the chargeable transfer made on his death, and
- (b) the amount on which the tax is charged had formed the highest part of that value.
- (6) In this section—
- “*alternatively secured pension fund*” has the same meaning as in Part 4 of the Finance Act 2004 (see paragraph 11 of Schedule 28 to that Act);
- “*dependants' alternatively secured pension*” has the meaning given by paragraph 19 of that Schedule;
- “*dependant's alternatively secured pension fund*” has the same meaning as in that Part of that Act (see paragraph 25 of that Schedule);
- “*dependants' unsecured pension*” has the meaning given by paragraph 18 of that Schedule;
- “*dependant's unsecured pension fund*” has the same meaning as in that Part of that Act (see paragraph 22 of that Schedule); and
- “*relevant dependant*”, in relation to a member of a registered pension scheme who dies, means a dependant (within the meaning of paragraph 15 of that Schedule) who—is the person's spouse or civil partner immediately before his death; oris financially dependent on the person at that time.
##### 151BA
- (1) Tax charged under section 151B above shall be charged at the rate or rates at which it would be charged on the death of the member if the amount mentioned in subsection (3) of that section (as reduced under subsection (4) of that section) (“the taxable amount”) had been included in the aggregate mentioned in section 151A(3)(a) above (but subject as follows).
- (2) The rate or rates at which tax is charged on the taxable amount shall be determined as if the taxable amount had formed the very highest part of the value of the member's estate immediately before the member's death (above any amount which is part of that value apart from this section).
- (3) The rate or rates at which tax is charged on the taxable amount shall be determined on the assumptions that—
- (a) subsection (3)(b) of section 151A above were omitted, and
- (b) the references in subsections (4A) and (5) of that section to the time when tax is charged on the transfer treated as made by the member on death were to the time when tax is charged under this section.
- (4) Subsection (5) below applies where, before the time when the dependant dies or ceases to be a relevant dependant, there have been one or more reductions of tax by virtue of the coming into force of a substitution of a new Table in Schedule 1 to this Act since the member's death.
- (5) The rate or rates at which tax is charged under section 151B above is to be determined as if the new Table effecting the reduction of tax (or the most recent reduction of tax) had been in force at the time of the member's death.
#### Effect of alterations of capital, etc
##### 151C
- (1) This section applies where—
- (a) a dependant of a member of a registered pension scheme has a dependant's alternatively secured pension fund in respect of an arrangement under the pension scheme immediately before his death, and
- (b) section 151B above does not apply.
- (2) In determining for the purposes of this Act the value of the dependant's estate immediately before his death he shall be treated as if he had been beneficially entitled to property with a value equal to the relevant amount.
- (3) The relevant amount is—
- (a) the aggregate of the amount of the sums and the value of the assets forming part of the dependant's alternatively secured pension fund immediately before his death, less
- (b) so much of sums forming part of the dependant's alternatively secured pension fund (or sums directly or indirectly deriving from sums or assets forming part of that fund) as are paid as a charity lump sum death benefit within the period of six months beginning with the end of the month in which his death occurs.
- (4) In this section—
- “*charity lump sum death benefit*” has the meaning given by paragraph 18 of Schedule 29 to the Finance Act 2004;
- “*dependant*” has the meaning given by paragraph 15 of that Schedule 28 to that Act; and
- “*dependant's alternatively secured pension fund*” has the same meaning as in Part 4 of that Act (see paragraph 25 of Schedule 28 to that Act).
##### 151D
- (1) This section applies where—
- (a) a member of a registered pension scheme, or a dependant of such a member, dies after reaching the age of 75;
- (b) immediately before death the member or dependant has under the pension scheme an actual right to payments under a relevant pension or relevant annuity or a prospective right to payments under a relevant pension; and
- (c) at any time after the death a relevant unauthorised payment is made by the pension scheme.
- (2) Where this section applies tax shall be charged under this section.
- (3) The amount on which tax is charged under this section shall be the difference between—
- (a) the amount of the relevant unauthorised payment; and
- (b) the amount of any liability to income tax which has arisen under Part 4 of the Finance Act 2004 by virtue of the making of the relevant unauthorised payment.
- (4) In this section—
- “*dependant*” has the meaning given by paragraph 15 of Schedule 28 to the Finance Act 2004;
- “*dependants' annuity*” has the same meaning as in that Part of that Act (see paragraph 17 of that Schedule);
- “*dependants' scheme pension*” has the same meaning as in that Part of that Act (see paragraph 16 of that Schedule);
- “*lifetime annuity*” has the same meaning as in that Part of that Act (see paragraph 3 of that Schedule);
- “*relevant annuity*” means a lifetime annuity or dependants' annuity purchased by the application of sums or assets held for the purposes of the pension scheme;
- “*relevant pension*” means a scheme pension or dependants' scheme pension provided by the scheme administrator or as a result of the application of sums or assets held for the purposes of the pension scheme;
- “*relevant unauthorised payment*” means an unauthorised payment (within the meaning of Part 4 of the Finance Act 2004: see section 160(5) of that Act) which—consists of the payment of a lump sum in respect of the dead member or dependant; oris treated as made by virtue of the operation of section 172B of that Act by reason of the death; and
- “*scheme pension*” has the same meaning as in Part 4 of that Act (see paragraph 2 of Schedule 28 to that Act).
##### 151E
- (1) Tax charged under section 151D above shall be charged at the rate or rates at which it would be charged if the amount on which it is charged, and any amount on which tax was previously charged under that section in relation to the death of the member or dependant, were part of the value transferred by the transfer of value made on the death of the member or dependant.
- (2) The rate or rates at which tax is charged on that amount shall be determined as if that amount had formed the highest part of that value.
- (3) Subsection (4) below applies where, before the time when the unauthorised payment is made, there have been one or more reductions of tax by virtue of the coming into force of a substitution of a new Table in Schedule 1 to this Act since the death of the member or dependant.
- (4) The rate or rates at which tax is charged under section 151D above is to be determined as if the new Table effecting the reduction of tax (or the most recent reduction of tax) (“the applicable Table”) had been in force at the time of the death of the member or dependant, but subject to subsections (5) and (8) below.
- (5) The nil-rate band maximum in the applicable Table is to be treated for the purposes of this section as reduced by the used-up percentage of the difference between—
- (a) that nil-rate band maximum, and
- (b) the nil-rate band maximum which was actually in force at the time of the death of the member or dependant.
- (6) For the purposes of subsection (5) above “the used-up percentage” is—
$$100-(ENRBM×100)$where—E is the amount by which M is greater than VT under section 8A(2) above in the case of the member or dependant; andNRBM is the nil-rate band maximum at the time of the death of the member or dependant.$
- (7) The following provisions apply where—
- (a) tax is charged under section 151D above, and
- (b) immediately before the death of the member or dependant, the member or dependant had a spouse or civil partner (“the survivor”).
- (8) If the survivor died before the time when the unauthorised payment is made, tax is charged as if the personal nil-rate band maximum of the member or dependant were appropriately reduced.
- (9) In subsection (8) above—
- “*the personal nil-rate band maximum of the member or dependant*” is the nil rate band maximum in the applicable Table, increased in accordance with section 8A above where that section effected an increase in that nil-rate band maximum in the case of the member or dependant (as a survivor of another deceased person), and
- “*appropriately reduced*” means reduced by the amount (if any) by which the amount on which tax was charged at the rate of nil per cent. on the death of the survivor was increased by reason of the operation of section 8A above by virtue of the position of the member or dependant.
- (10) If the survivor did not die before the time when the unauthorised payment is made, tax is to be charged on the death of the survivor as if the percentage referred to in section 8A(3) above in the case of the member or dependant were that specified in subsection (11) below.
- (11) That percentage is—
$$AEANRBM×100$where—AE is the adjusted excess, that is the amount by which M would be greater than VT under section 8A(2) above in the case of the member or dependant if—(a) the amount on which tax is charged under section 151D above were included in the value transferred by the chargeable value made on the death of the member or dependant, and(b) the nil-rate band maximum at the time of the death were ANRBM; andANRBM is the adjusted nil-rate band maximum, that is the nil-rate band maximum in the applicable Table (as reduced under subsection (5) above where that subsection applies).$
#### The relief.
#### Dependant dying with other pension fund
##### 186A
- (1) Where any qualifying investments comprised in a person’s estate immediately before his death are—
- (a) cancelled within the period of twelve months immediately following the date of the death without being replaced by other shares or securities, and
- (b) held, immediately before cancellation, by the appropriate person,
they shall be treated for the purposes of this Chapter as having been sold by the appropriate person for a nominal consideration (one pound) immediately before cancellation.
- (2) Where any qualifying investments are included in the calculation under section 179(1) above by virtue of this section, paragraph (b) of that subsection shall have effect, so far as relating to those investments, with the omission of the words from “or” to the end.
##### 186B
- (1) This section applies to any qualifying investments comprised in a person’s estate immediately before his death in respect of which listing on a recognised stock exchange or dealing on the Unlisted Securities Market is suspended at the end of the period of twelve months immediately following the date of the death (“*the relevant period*”).
- (2) Where—
- (a) any qualifying investments to which this section applies are, at the end of the relevant period, held by the appropriate person, and
- (b) the value on death of those investments exceeds their value at the end of that period,
they shall be treated for the purposes of this Chapter as having been sold by the appropriate person immediately before the end of that period for a price equal to their value at that time.
- (3) Where any qualifying investments are included in the calculation under section 179(1) above by virtue of this section, paragraph (b) of that subsection shall have effect, so far as relating to those investments, with the omission of the words from “or” to the end.
##### 197A
- (1) Where an interest in land—
- (a) is comprised in a person’s estate immediately before his death, and
- (b) is sold by the appropriate person in the fourth year immediately following the date of the death, otherwise than in circumstances in which section 197(1) above has effect,
the interest shall be treated, for the purposes of section 191(1) above, as having been sold within the period of three years immediately following the date of the death.
- (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.
- (4) In applying section 196(1) above, no account shall be taken, for the purposes of paragraph (a) of that subsection, of an interest in relation to which subsection (1) above has effect.
##### 218A
- (1) Where—
- (a) an instrument is made varying any of the dispositions of the property comprised in the estate of a deceased person immediately before his death,
- (b) the instrument contains a statement under subsection (2) of section 142 above, and
- (c) the variation results in additional tax being payable,
the relevant persons (within the meaning of that subsection) shall, within six months after the day on which the instrument is made, deliver a copy of it to the Board and notify them of the amount of the additional tax.
- (2) To the extent that any of the relevant persons comply with the requirements of this section, the others are discharged from the duty to comply with them.
##### 219A
- (1) An officer of the Board may by notice in writing require any person who has delivered, or is liable to deliver, an account under section 216 or 217 above, within such time as may be specified in the notice—
- (a) to produce to the officer such documents as are in the person’s possession or power and as the officer may reasonably require for any of the purposes mentioned in subsection (2) below; and
- (b) to furnish the officer with such accounts or particulars as he may reasonably require for any of those purposes.
- (2) The purposes are—
- (a) enquiring into an account under section 216 or 217 above (including any claim or election included in the account);
- (b) determining whether and, if so, the extent to which such an account is incorrect or incomplete; and
- (c) making a determination for the purposes of a notice under section 221 below.
- (3) To comply with a notice under subsection (1) above, copies of documents may be produced instead of originals; but the copies must be photographic or otherwise by way of facsimile.
- (4) If so required by a notice in writing given by the officer, in the case of any document specified in the notice, the original of any copy produced under subsection (3) above must be produced for inspection by him within such time as may be specified in the notice.
- (5) The time specified in a notice under subsection (1) or (4) above shall not be less than thirty days.
- (6) The officer may take copies of, or make extracts from, any document produced to him under subsection (1) or (4) above.
- (7) A notice under subsection (1) above does not oblige a person to produce documents or furnish accounts or particulars relating to the conduct of any pending appeal by him.
##### 219B
- (1) An appeal may be brought against any requirement imposed by a notice under section 219A(1) above to produce any document or to furnish any accounts or particulars.
- (2) Subject to the following provisions of this section, the provisions of this Act relating to appeals shall have effect in relation to an appeal under this section as they have effect in relation to an appeal against a determination specified in a notice under section 221 below.
- (3) An appeal under this section must be brought within the period of thirty days beginning with the date on which the notice under section 219A(1) above is given.
- (4) On an appeal under this section the Special Commissioners may—
- (a) if it appears to them that the production of the document or the furnishing of the accounts or particulars was reasonably required by the officer of the Board for any of the purposes mentioned in section 219A(2) above, confirm the notice under section 219A(1) above so far as relating to the requirement; or
- (b) if it does not so appear to them, set aside that notice so far as so relating.
- (5) Where, on an appeal under this section, the Special Commissioners confirm the notice under section 219A(1) above so far as relating to any requirement, the notice shall have effect in relation to that requirement as if it had specified thirty days beginning with the determination of the appeal.
- (6) Neither the person required to produce documents or furnish accounts or particulars nor the officer of the Board shall be entitled to appeal under section 225 below against the determination of an appeal under this section.
##### 220A
- (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 the exchange of information foreseeably relevant to the administration or enforcement of—
- (a) the domestic laws of the United Kingdom concerning inheritance tax; and
- (b) the laws of the territory to which the arrangements relate concerning any taxes imposed by the laws of that territory which are of a similar character to that tax or are chargeable on or by reference to death or gifts inter vivos,
and that it is expedient that those arrangements shall have effect, then those arrangements shall have effect notwithstanding anything in any enactment.
- (2) Any Order in Council made under this section revoking an earlier such Order in Council may contain such transitional provisions as appear to Her Majesty to be necessary or expedient.
- (3) An Order under this section shall not be submitted to Her Majesty in Council unless a draft of the Order has been laid before and approved by a resolution of the House of Commons.
- (4) Where any arrangements have effect by virtue of this section, no obligation of 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 in accordance with the arrangements.
- (5) Neither the Board nor an authorised officer of the Board shall disclose any information in pursuance of any arrangements having effect by virtue of this section unless satisfied that the government with which the arrangements are made is bound by, or has undertaken to observe, rules of confidentiality with respect to the information which are not less strict than those applying to it in the United Kingdom.
##### 223A
- (1) This section applies if notice of appeal has been given to HMRC.
- (2) In such a case—
- (a) the appellant may notify HMRC that the appellant requires HMRC to review the matter in question (see section 223B),
- (b) HMRC may notify the appellant of an offer to review the matter in question (see section 223C), or
- (c) the appellant may notify the appeal to the tribunal (see section 223D).
- (3) See sections 223G and 223H for provision about notifying appeals to the tribunal after a review has been required by the appellant or offered by HMRC.
##### 223B
- (1) Subsections (2) and (3) apply if the appellant notifies HMRC that the appellant requires HMRC to review the matter in question.
- (2) HMRC must, within the relevant period, notify the appellant of HMRC's view of the matter in question.
- (3) HMRC must review the matter in question in accordance with section 223E.
- (4) The appellant may not notify HMRC that the appellant requires HMRC to review the matter in question and HMRC shall not be required to conduct a review if—
- (a) the appellant has already given a notification under this section in relation to the matter in question,
- (b) HMRC have given a notification under section 223C in relation to the matter in question, or
- (c) the appellant has notified the appeal to the court under section 222(3), the appropriate Lands tribunal under section 222(4), or the tribunal under section 223D.
- (5) In this section “*relevant period*” means—
- (a) the period of 30 days beginning with the day on which HMRC receive the notification from the appellant, or
- (b) such longer period as is reasonable.
##### 223C
- (1) Subsections (2) to (6) apply if HMRC notify the appellant of an offer to review the matter in question.
- (2) When HMRC notify the appellant of the offer, HMRC must also notify the appellant of HMRC's view of the matter in question.
- (3) If, within the acceptance period, the appellant notifies HMRC of acceptance of the offer, HMRC must review the matter in question in accordance with section 223E.
- (4) If the appellant does not give HMRC such a notification within the acceptance period, HMRC's view of the matter in question shall be conclusive for the purposes of this Act.
- (5) The same consequences shall follow for all purposes as would have followed if, on the date that HMRC gave notice of their view, the tribunal had determined the appeal in accordance with its terms.
- (6) Subsection (4) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under section 223H.
- (7) HMRC may not notify the appellant of an offer to review the matter in question (and, accordingly, HMRC shall not be required to conduct a review) if—
- (a) HMRC have already given a notification under this section in relation to the matter in question,
- (b) the appellant has given a notification under section 223B in relation to the matter in question, or
- (c) the appellant has notified the appeal to the court under section 222(3), the appropriate Lands tribunal under section 222(4) or the tribunal under section 223D.
- (8) In this section “*acceptance period*” means the period of 30 days beginning with the date of the document by which HMRC notify the appellant of the offer to review the matter in question.
##### 223D
- (1) This section applies if notice of appeal has been given to HMRC.
- (2) The appellant may notify the appeal to the tribunal.
- (3) If the appellant notifies the appeal to the tribunal, the tribunal is to decide the matter in question.
- (4) Subsections (2) and (3) do not apply in a case where—
- (a) HMRC have given a notification of their view of the matter in question under section 223B, or
- (b) HMRC have given a notification under section 223C in relation to the matter in question.
- (5) In a case falling within subsection (4)(a) or (b), the appellant may notify the appeal to the tribunal, but only if permitted to do so by section 223G or 223H.
##### 223E
- (1) This section applies if HMRC are required by section 223B or 223C to review the matter in question.
- (2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.
- (3) For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—
- (a) by HMRC in deciding the matter in question, and
- (b) by any person in seeking to resolve disagreement about the matter in question.
- (4) The review must take account of any representations made by the appellant at a stage which gives HMRC a reasonable opportunity to consider them.
- (5) The review may conclude that HMRC's view of the matter in question is to be—
- (a) upheld,
- (b) varied, or
- (c) cancelled.
- (6) HMRC must notify the appellant of the conclusions of the review and their reasoning within—
- (a) the period of 45 days beginning with the relevant day, or
- (b) such other period as may be agreed.
- (7) In subsection (6) “*relevant day*” means—
- (a) in a case where the appellant required the review, the day when HMRC notified the appellant of HMRC's view of the matter in question,
- (b) in a case where HMRC offered the review, the day when HMRC received notification of the appellant's acceptance of the offer.
- (8) Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in subsection (6), the review is to be treated as having concluded that HMRC's view of the matter in question (see sections 223B(2) and 223C(2)) is upheld.
- (9) If subsection (8) applies, HMRC must notify the appellant of the conclusion which the review is treated as having reached.
#### Cash options.
##### 223F
- (1) This section applies if HMRC give notice of the conclusions of a review (see section 223E(6) and (9)).
- (2) The conclusions of the review shall be conclusive for the purposes of this Act.
- (3) Subsections (2) and (3) do not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under section 223G.
##### 223G
- (1) This section applies if—
- (a) HMRC have given notice of the conclusions of a review in accordance with section 223E, or
- (b) the period specified in section 223E(6) has ended and HMRC have not given notice of the conclusions of the review.
- (2) The appellant may notify the appeal to the tribunal within the post-review period.
- (3) If the post-review period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.
- (4) If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question.
- (5) The appellant may not notify the appeal to the tribunal under this section if the appeal has been notified to the court under section 222(3) or the appropriate Lands tribunal under section 222(4).
- (6) In this section “*post-review period*” means—
- (a) in a case falling within subsection (1)(a), the period of 30 days beginning with the date of the document in which HMRC give notice of the conclusions of the review in accordance with section 223E(6), or
- (b) in a case falling within subsection (1)(b), the period that—
- (i) begins with the day following the last day of the period specified in section 223E(6), and
- (ii) ends 30 days after the date of the document in which HMRC give notice of the conclusion of the review in accordance with section 223E(9).
##### 223H
- (1) This section applies if—
- (a) HMRC have offered to review the matter in question (see section 223C), and
- (b) the appellant has not accepted the offer.
- (2) The appellant may notify the appeal to the tribunal within the acceptance period.
- (3) But if the acceptance period has ended, the appellant may notify the appeal to the tribunal only if the tribunal gives permission.
- (4) If the appellant notifies the appeal to the tribunal, the tribunal is to determine the matter in question.
- (5) The appellant may not notify the appeal to the tribunal under this section if the appeal has been notified to the court under section 222(3) or the appropriate Lands tribunal under section 222(4).
- (6) In this section “*acceptance period*” has the same meaning as in section 223C.
##### 223I
- (1) In sections 223A to 223H—
- (a) “*matter in question*” means the matter to which an appeal relates;
- (b) a reference to a notification is a reference to a notification in writing.
- (2) In sections 223A to 223H, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—
- (a) notification of HMRC's view under section 223B(2);
- (b) notification by HMRC of an offer of review (and of their view of the matter) under section 223C;
- (c) notification of the conclusions of a review under section 223E(6); and
- (d) notification of the conclusions of a review under section 223E(9).
- (3) But if a notification falling within any of the paragraphs of subsection (2) is given to the appellant, a copy of the notification may also be given to a person acting on behalf of the appellant.
##### 225A
- (1) Section 46A of the Taxes Management Act 1970 (regulations about jurisdiction of General and Special Commissioners) shall apply in relation to appeals or other proceedings under this Part of this Act as it applies in relation to appeals or other proceedings under the Taxes Acts, but with the omission from subsection (1) of—
- (a) paragraphs (a) and (b), and
- (b) the words “General Commissioners or” in paragraph (c).
- (2) Sections 56B, 56C and 56D of the Taxes Management Act 1970 (regulations about practice and procedure of General and Special Commissioners) shall apply in relation to appeals or other proceedings under this Part of this Act as they apply in relation to appeals or other proceedings under the Taxes Acts.
- (3) In this section, “*the Taxes Acts*” has the meaning given in section 118(1) of the Taxes Management Act 1970.
##### 240A
- (1) This section applies for the purposes of section 240.
- (2) A loss of tax is brought about carelessly by a person if the person fails to take reasonable care to avoid bringing about that loss.
- (3) Where—
- (a) information is provided to Her Majesty's Revenue and Customs,
- (b) the person who provided the information, or the person on whose behalf the information was provided, discovers some time later that the information was inaccurate, and
- (c) that person fails to take reasonable steps to inform Her Majesty's Revenue and Customs,
any loss of tax brought about by the inaccuracy is to be treated as having been brought about carelessly by that person.
- (4) References to a loss of tax brought about deliberately by a person include a loss of tax brought about as a result of a deliberate inaccuracy in a document given to Her Majesty's Revenue and Customs by or on behalf of that person.
##### 245A
- (1) A person who fails to make a return under section 218 above shall be liable—
- (b) to a further penalty not exceeding £60 for every day after the day on which the failure has been declared by a court or the Special Commissioners and before the day on which the requirements are complied with.
- (1B) Without prejudice to any penalties under subsection (1A) above, if a person continues to fail to comply with the requirements of section 218A after the anniversary of the end of the period of six months referred to in section 218A(1), he shall be liable to a penalty of an amount not exceeding £3,000.
- (2) A person who fails to comply with a notice under section 219 above shall be liable—
- (a) to a penalty not exceeding £300; and
- (b) to a further penalty not exceeding £60 for every day after the day on which the failure has been declared by a court or the Special Commissioners and before the day on which the return is made.
- (1A) A person who fails to comply with the requirements of section 218A above shall be liable—
- (a) to a penalty not exceeding £100; and
- (b) to a further penalty not exceeding £60 for every day after the day on which the failure has been declared by a court or the Special Commissioners and before the day on which the requirements are complied with.
- (2) A person who fails to comply with a notice under section 219 above shall be liable—
- (a) to a penalty not exceeding £300; and
- (b) to a further penalty not exceeding £60 for every day after the day on which the failure has been declared by a court or the Special Commissioners and before the day on which the notice is complied with.
- (3) A person who fails to comply with a notice under section 219A(1) or (4) above shall be liable—
@@ -8238,7 +8270,7 @@
before proceedings in which the failure could be declared are commenced.
- (5) A person who has a reasonable excuse for failing to make a return or to comply with a notice shall not be liable by reason of that failure to a penalty under this section, unless he fails to make the return or to comply with the notice without unreasonable delay after the excuse has ceased.
- (5) A person who has a reasonable excuse for failing to make a return , to comply with the requirements of section 218A or to comply with a notice shall not be liable by reason of that failure to a penalty under this section, unless he fails to make the return , to comply with the requirements of section 218A or to comply with the notice without unreasonable delay after the excuse has ceased.
##### 267A
@@ -9246,14 +9278,24 @@
[^c13614721]: [Ss. 245](https://www.legislation.gov.uk/ukpga/1984/51/section/245), [245A](https://www.legislation.gov.uk/ukpga/1984/51/section/245A) substituted for s. 245 (27.7.1999 with effect as mentioned in [s. 108(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/3) of the amending Act) by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 108(1)(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/1/3)
[^c19467951]: Word in [s. 245(2)(a)(3)](https://www.legislation.gov.uk/ukpga/1984/51/section/245/2/a/3) substituted (with effect as mentioned in [s. 295(5)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/5) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 295(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/2/a)
[^c19467991]: [S. 245(4A)](https://www.legislation.gov.uk/ukpga/1984/51/section/245/4A) inserted (with effect as mentioned in [s. 295(6)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/6) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 295(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/2/b)
[^c13614741]: [Ss. 245](https://www.legislation.gov.uk/ukpga/1984/51/section/245), [245A](https://www.legislation.gov.uk/ukpga/1984/51/section/245A) substituted for s. 245 by (27.7.1999 with effect as mentioned in [s. 108(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/3) of the amending Act) by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 108(1)(3)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/1/3)
[^c13614751]: [S. 245A(1A)](https://www.legislation.gov.uk/ukpga/1984/51/section/245A/1A) inserted (24.7.2002 with application as mentioned in [s. 120(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/120/4) of the amending Act) by [2002 c. 23](https://www.legislation.gov.uk/ukpga/2002/23), [s. 120(3)(a)](https://www.legislation.gov.uk/ukpga/2002/23/section/120/3/a),(4)
[^c19468071]: [S. 245A(1B)](https://www.legislation.gov.uk/ukpga/1984/51/section/245A/1B) inserted (with effect as mentioned in [s. 295(7)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/7) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 295(3)(a)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/3/a)
[^c13614771]: [S. 245A(4)(aa)](https://www.legislation.gov.uk/ukpga/1984/51/section/245A/4/aa) inserted (24.7.2002 with application as mentioned in [s. 120(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/120/4) of the amending Act) by [2002 c. 23](https://www.legislation.gov.uk/ukpga/2002/23), [s. 120(3)(b)](https://www.legislation.gov.uk/ukpga/2002/23/section/120/3/b),(4)
[^c13614781]: [S. 246](https://www.legislation.gov.uk/ukpga/1984/51/section/246) repealed (1.9.1994) by [S.I. 1994/1813](https://www.legislation.gov.uk/uksi/1994/1813), [reg. 2(1)](https://www.legislation.gov.uk/uksi/1994/1813/regulation/2/1), [Sch. 1 para. 20](https://www.legislation.gov.uk/uksi/1994/1813/schedule/1/paragraph/20), [Sch. 2 Pt. I](https://www.legislation.gov.uk/uksi/1994/1813/schedule/2/part/I)
[^c19468171]: [S. 247](https://www.legislation.gov.uk/ukpga/1984/51/section/247) restricted (22.7.2004 for certain purposes and otherwise 1.8.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 313(4)(c)](https://www.legislation.gov.uk/ukpga/2004/12/section/313/4/c) (with [ss. 314](https://www.legislation.gov.uk/ukpga/2004/12/section/314), [319(5)](https://www.legislation.gov.uk/ukpga/2004/12/section/319/5))
[^c19468261]: Words in [s. 247(3)](https://www.legislation.gov.uk/ukpga/1984/51/section/247/3) substituted (with effect as mentioned in [s. 295(9)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/9) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 295(4)(b)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/4/b)
[^c13614831]: Words in [s. 247(4)](https://www.legislation.gov.uk/ukpga/1984/51/section/247/4) substituted (27.7.1999 with effect as mentioned in s. 108(4) in the amending Act) by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 108(2)(c)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/2/c)
[^c13614841]: [S. 249(1)](https://www.legislation.gov.uk/ukpga/1984/51/section/249/1):transfer of functions (S.) (20.5.1999) by [S.I. 1999/679](https://www.legislation.gov.uk/uksi/1999/679), [arts. 1(2)](https://www.legislation.gov.uk/uksi/1999/679/article/1/2), [2](https://www.legislation.gov.uk/uksi/1999/679/article/2), [Sch](https://www.legislation.gov.uk/uksi/1999/679/schedule); [S.I. 1998/3178](https://www.legislation.gov.uk/uksi/1998/3178), [art. 2(2)](https://www.legislation.gov.uk/uksi/1998/3178/article/2/2), [Sch. 4](https://www.legislation.gov.uk/uksi/1998/3178/schedule/4)
@@ -9262,6 +9304,20 @@
[^c13614861]: [S. 251](https://www.legislation.gov.uk/ukpga/1984/51/section/251) and sidenote substituted (1.9.1994) by [S.I. 1994/1813](https://www.legislation.gov.uk/uksi/1994/1813), [reg. 2(1)](https://www.legislation.gov.uk/uksi/1994/1813/regulation/2/1), [Sch. 1 para.22](https://www.legislation.gov.uk/uksi/1994/1813/schedule/1/paragraph/22)
[^c19468481]: Words in [s. 256(1)(a)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/1/a) substituted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 293(2)(a)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/2/a)
[^c19468521]: [S. 256(1)(aa)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/1/aa) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 293(2)(b)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/2/b)
[^c19468561]: Words in [s. 256(1)(b)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/1/b) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 293(2)(c)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/2/c)
[^c19468641]: [S. 256(1)(c)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/1/c) repealed (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [ss. 293(2)(d)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/2/d), [326](https://www.legislation.gov.uk/ukpga/2004/12/section/326), [Sch. 42 Pt. 4(1)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/4/1)
[^c19468581]: [S. 256(1A)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/1A) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 293(3)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/3)
[^c19468671]: [S. 256(2)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/2) repealed (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [ss. 293(4)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/4), [326](https://www.legislation.gov.uk/ukpga/2004/12/section/326), [Sch. 42 Pt. 4(1)](https://www.legislation.gov.uk/ukpga/2004/12/schedule/42/part/4/1)
[^c19468601]: Words in [s. 256(3)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/3) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 293(5)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/5)
[^c13614951]: [1891 c.39](https://www.legislation.gov.uk/ukpga/1891/39).
[^c13614961]: [1946 c.64](https://www.legislation.gov.uk/ukpga/1946/64).
@@ -9554,21 +9610,15 @@
[^c13614371]: [1985 c.6](https://www.legislation.gov.uk/ukpga/1985/6).
[^c13614791]: Words in [s. 247(1)](https://www.legislation.gov.uk/ukpga/1984/51/section/247/1) substituted (27.7.1999 with effect as mentioned in s. 108(4) in the amending Act) by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 108(2)(a)(i)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/2/a/i)
[^c13614801]: Words in [s. 247(1)](https://www.legislation.gov.uk/ukpga/1984/51/section/247/1) substituted (27.7.1999 with effect as mentioned in s. 108(4) in the amending Act) by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 108(2)(a)(ii)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/2/a/ii)
[^c13614811]: Words in [s. 247(3)](https://www.legislation.gov.uk/ukpga/1984/51/section/247/3) substituted (27.7.1999 with effect as mentioned in s. 108(4) in the amending Act) by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 108(2)(b)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/2/b)
[^c13614821]: Words in [s. 247(3)](https://www.legislation.gov.uk/ukpga/1984/51/section/247/3) substituted (27.7.1999 with effect as mentioned in s. 108(4) in the amending Act) by [1999 c. 16](https://www.legislation.gov.uk/ukpga/1999/16), [s. 108(2)(b)](https://www.legislation.gov.uk/ukpga/1999/16/section/108/2/b)
[^c19468221]: Words in [s. 247(1)](https://www.legislation.gov.uk/ukpga/1984/51/section/247/1) substituted (with effect as mentioned in [s. 295(9)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/9) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 295(4)(a)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/4/a)
[^c13614761]: Words in [s. 245A(4)](https://www.legislation.gov.uk/ukpga/1984/51/section/245A/4) inserted (24.7.2002 with application as mentioned in [s. 120(4)](https://www.legislation.gov.uk/ukpga/2002/23/section/120/4) of the amending Act) by [2002 c. 23](https://www.legislation.gov.uk/ukpga/2002/23), [s. 120(3)(b)](https://www.legislation.gov.uk/ukpga/2002/23/section/120/3/b),(4)
[^c13614871]: [1981 c.54](https://www.legislation.gov.uk/ukpga/1981/54);
[^c13614881]: [1808 c.149](https://www.legislation.gov.uk/ukpga/1808/149);
[^c13614891]: [S.I. 1979/1575 (N.I. 14)](https://www.legislation.gov.uk/nisi/1979/1575).
[^c19468111]: Words in [s. 245A(5)](https://www.legislation.gov.uk/ukpga/1984/51/section/245A/5) inserted (with effect as mentioned in [s. 295(8)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/8) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 295(3)(b)(i)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/3/b/i)
[^c19468131]: Words in [s. 245A(5)](https://www.legislation.gov.uk/ukpga/1984/51/section/245A/5) inserted (with effect as mentioned in [s. 295(8)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/8) of the amending Act) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 295(3)(b)(ii)](https://www.legislation.gov.uk/ukpga/2004/12/section/295/3/b/ii)
[^c19468621]: [S. 256(3A)](https://www.legislation.gov.uk/ukpga/1984/51/section/256/3A) inserted (22.7.2004) by [Finance Act 2004 (c. 12)](https://www.legislation.gov.uk/ukpga/2004/12), [s. 293(6)](https://www.legislation.gov.uk/ukpga/2004/12/section/293/6)
[^c13615411]: [1970 c.9](https://www.legislation.gov.uk/ukpga/1970/9).
@@ -9580,6 +9630,12 @@
The National Gallery.
#### Effect of conclusions of review
#### Notifying appeal to tribunal after review concluded
The National Gallery.
#### Failure to provide information etc.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The National Gallery.
2004-03-17
Inheritance Tax Act 1984
2003-12-01
Inheritance Tax Act 1984
2003-10-13
Inheritance Tax Act 1984
2003-07-10
Inheritance Tax Act 1984
2003-04-06
Inheritance Tax Act 1984
2003-03-27
Inheritance Tax Act 1984
2002-10-16
Inheritance Tax Act 1984
2002-07-24
Inheritance Tax Act 1984
2001-01-30
Inheritance Tax Act 1984
1995-05-01
Inheritance Tax Act 1984
1994-09-01
Inheritance Tax Act 1984
1993-03-20
Inheritance Tax Act 1984
1984-07-31
Inheritance Tax Act 1984
original version
Text at this date