Inheritance Tax Act 1984

Sections 27, 58, 77 etc.

SCHEDULE 4 U.K. MAINTENANCE FUNDS FOR HISTORIC BUILDINGS, ETC.

Modifications etc. (not altering text)

C1 By Finance Act 1985 s. 95,the functions of the Treasury were transferred to the Commissioners of Inland Revenue (“the Board”).

PART I U.K. TREASURY DIRECTIONS

Giving of directions U.K.

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. U.K.

(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 M1 Finance Act 1982 and exempt under section 84 of the M2 Finance Act 1976 shall be treated as property in respect of which a direction has been given under this paragraph.

Marginal Citations

M1 1982 c.39.

M2 1976 c.40.

Conditions U.K.

2 (1) The conditions referred to in paragraph 1 above are— U.K.

(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 M3 Law of Property Act 1925 or for the purposes of Article 9 of the M4 Administration of Estates (Northern Ireland) Order 1979.

Marginal Citations

M3 1925 c.20.

M4 S.I. 1979/1575 (N.I. 14).

3 (1) The requirements referred to in paragraph 2(1)(a)(i) above are (subject to paragraph 4 below)— U.K.

(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 M5 Finance Act 1975 or section 77(1)(b), (c), (d) or (e) of the M6 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), [F1 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, [F1 32A] [F2 or 79(3A)] 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), [F1 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 [F1 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 [F1 or 32A] of this Act if there had been a conditionally exempt transfer of the property when the claim was made and the undertaking [F1 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 M7 Finance Act 1982 shall be treated as made under sub-paragraph (3) above.

[F3 (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).]

Textual Amendments

F1 Finance Act 1985 Sch. 26, para. 12,in relation to events occurring after 18March 1985.

F2 Words in Sch. 4 para. 3(2)(c) substituted (with effect in accordance with s. 12(9) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 12(8)(d)

F3 Finance Act 1987 Sch. 9, para. 2,in relation to directions given on or after 17March 1987.

Marginal Citations

M5 1975 c.7.

M6 1976 c.40.

M7 1982 c.39.

4 (1) Paragraphs (a) and (b) of paragraph 3(1) above do not apply to property which— U.K.

(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 U.K.

5 U.K. 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 U.K.

6 U.K. 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 U.K.

7 U.K. 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 U.K. PROPERTY LEAVING MAINTENANCE FUNDS

Charge to tax U.K.

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. U.K.

(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 U.K.

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. U.K.

(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— U.K.

(a) property to which the settlor or his spouse [F4 or civil partner] is beneficially entitled, or

(b) property to which the settlor’s widow or widower [F5 or surviving civil partner] 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.

Textual Amendments

F4 Words in Sch. 4 para. 10(1)(a) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 39(2)(a)

F5 Words in Sch. 4 para. 10(1)(b) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 39(2)(b)

Rates of charge U.K.

11 (1) This paragraph applies where tax is chargeable under paragraph 8 above and— U.K.

(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. U.K.

(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— U.K.

(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, [F6 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. U.K.

[F7 (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, [F6 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”), [F6 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.

[F8 (2A) In determining for the purposes of sub-paragraph (2) the effective rate or rates at which tax would have been charged on the amount in accordance with section 7(1), the effect of Schedule 1A (if it would have applied) is to be disregarded.]

(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 [F9 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.

[F10 (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).]

Textual Amendments

F6 Finance Act 1986 Sch. 19, para. 38(1),with effect from 18March 1986.Originally

“under the appropriate Table”.

F7 Finance Act 1986 Sch. 19, para. 38(2),with effect from 18March 1986.

F8 Sch. 4 para. 14(2A) inserted (with effect in accordance with Sch. 33 para. 10(1) of the amending Act) by Finance Act 2012 (c. 14), Sch. 33 para. 8

F9 Finance Act 1986 Sch. 19, para. 38(3),with effect from 18March 1986.Originally

“ten years”.

F10 Finance Act 1986 Sch. 19, para. 38(4),with effect from 18March 1986.Originally

“(9) For the purposes of sub-paragraph (1) above the appropriate Table is the second Table in Schedule 1 to this Act, and for the purposes of sub-paragraphs (2) and (3) above it is (if the settlement was made on death) the first Table in that Schedule and (if not) the second.”

15 U.K. 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.

[F11 Maintenance fund following interest in possession U.K.

Textual Amendments

F11 Finance Act 1987 Sch. 9, para. 3,where the occasion of the charge or potential charge to tax under para.8above falls on or after 17March 1987.

15A (1) In relation to settled property to which this paragraph applies, the provisions of this Part of this Schedule shall have effect with the modifications set out in the following sub-paragraphs. U.K.

(2) This paragraph applies to property which became property to which paragraph 8 above applies on the occasion of a transfer of value which was made by a person beneficially entitled to an interest in possession in the property, and which (so far as the value transferred by it was attributable to the property)—

(a) was an exempt transfer by virtue of the combined effect of either—

(i) sections 27 and 57(5) of this Act, or

(ii) sections 27 and 57A of this Act, and

(b) would but for those sections have been a chargeable transfer;

and in the following sub-paragraphs “the person entitled to the interest in possession” means the person above referred to.

(3) Paragraph 9(2) shall have effect as if for the reference to the settlor there were substituted a reference to either the settlor or the person entitled to the interest in possession.

(4) Paragraph 10 shall not apply if the person entitled to the interest in possession had died at or before the time when the property became property to which paragraph 8 above applies; and in any other case shall have effect with the substitution in sub-paragraph (1) of the following words for the words from “on becoming” onwards—

“(a) on becoming property to which the person entitled to the interest in possession is beneficially entitled, or

(b) on becoming—

(i) property to which that person’s spouse [F12 or civil partner] is beneficially entitled, or

(ii) property to which that person’s widow or widower [F13 or surviving civil partner] is beneficially entitled if that person has died in the two years preceding the time when it becomes such property;

but paragraph (b) above applies only where the [F14 spouse or civil partner, or widow or widower or surviving civil partner,] would have become beneficially entitled to the property on the termination of the interest in possession had the property not then become property to which paragraph 8 above applies.”

(5) Paragraph 11 shall not apply.

(6) Sub-paragraphs (1) to (3) of paragraph 14 shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession.

(7) Sub-paragraph (4) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and

(c) was, in relation to either of those settlements, property to which paragraph 15A below applied,”,

and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine, be construed as references to the person who was the settlor in relation to the current settlement.”.

(8) Sub-paragraph (5) of paragraph 14 shall have effect with the insertion after paragraph (b) of the words “and

(c) was, in relation to any of those settlements, property to which paragraph 15A below applied,”,

and with the substitution for the words from “settlor shall” onwards of the words “person entitled to the interest in possession shall, if the Board so determine, be construed as references to any person selected by them who was the settlor in relation to any of the previous settlements or the current settlement.”

(9) Except in a case where the Board have made a determination under sub-paragraph (4) or (5) of paragraph 14, sub-paragraphs (6) and (7) of that paragraph shall have effect as if for the references to the settlor there were substituted references to the person entitled to the interest in possession.

(10) Sub-paragraph (9) of paragraph 14 shall have effect with the substitution for the words “(if the settlement was made on death)” of the words “(if the person entitled to the interest in possession had died at or before the time when the property became property to which paragraph 8 above applies)”.]

Textual Amendments

F12 Words in Sch. 4 para. 15A(4) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 39(3)(a)

F13 Words in Sch. 4 para. 15A(4) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 39(3)(b)

F14 Words in Sch. 4 para. 15A(4) substituted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 39(3)(c)

PART III U.K. 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. U.K.

(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— U.K.

(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 U.K. 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.