Finance Act 1975

Inland Revenue charge for unpaid tax

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

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

(b) where the chargeable transfer is made by the making of a settlement or is made under Schedule 5 to this Act, any property comprised in the settlement.

(2) References in sub-paragraph (1) above to any property include references to any property directly or indirectly representing it.

(3) Where the chargeable transfer is made on death, personal or movable property situated in the United Kingdom which was beneficially owned by the deceased immediately before his death and vests in his personal representatives is not subject to the Inland Revenue charge ; and for this purpose " personal property " includes leaseholds and undivided shares in land held on trust for sale, whether statutory or not, and the question whether any property was beneficially owned by the deceased shall be determined without regard to paragraph 3(1) of Schedule 5 to this Act.

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

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

(6) Except as provided by paragraph 21 below, a disposition of property subject to an Inland Revenue charge shall take effect subject to that charge.

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

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

(b) in the case of land in Northern Ireland the title to which is registered under the Local Registration of Title (Ireland). Act 1891, the charge was not entered as a burden on the appropriate register maintained under that Act or was not protected by a caution or inhibition under that Act or, in the case of other land in Northern Ireland, the purchaser had no notice of the facts giving rise to the charge ; or

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

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

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

(2) Where property subject to an Inland Revenue charge, or an interest in such property, is disposed of to a purchaser in circumstances where it does not then cease to be subject to the charge, it shall cease to be subject to it on the expiration of the period of six years beginning with the later of the following dates, namely—

(a) the date on which the tax became due ; and

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

(3) In this paragraph " the time of the disposition " means—

(a) in relation to registered land, the time of registration of the disposition; and

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

(4) On the coming into operation of section 39 of the [1970 c. 21 (N.I.).] Land Registration Act (Northern Ireland) 1970 that Act shall be substituted in sub-paragraph (1)(b) above for the Act mentioned therein.