8(1)[F1This paragraph applies where] there is a disposal by way of gift of property which, in relation to the donor, is at that time—U.K.
(a)relevant business property within the meaning of Chapter I of Part V of the 1984 Act, or
(b)agricultural property, within the meaning of Chapter II of that Part, to which section 116 of that Act applies, or
(c)shares or securities to which section 122(1) of that Act applies (agricultural property of companies),
and that property is property subject to a reservation F2. . .
[F3(1A)Where this paragraph applies—
(a)any question whether, on the material transfer of value, any shares or securities fall [F4within paragraph (b), (bb) or (cc) of section 105(1) of the 1984 Act (certain shares or securities qualifying for relief)] shall be determined, subject to the following provisions of this paragraph, as if the shares or securities were owned by the donor and had been owned by him since the disposal by way of gift; and
(b)subject to paragraph (a), any question whether, on the material transfer of value, relief is available by virtue of Chapter I or Chapter II of Part V of the 1984 Act and, if relief is available by virtue of Chapter II, what is the appropriate percentage of that relief, shall be determined, subject to the following provisions of this paragraph, as if, so far as it is attributable to the property comprised in the gift, that transfer were a transfer of value by the donee.]
(2)For the purpose only of determining whether, on the transfer of value which, by virtue of sub-paragraph [F5(1A)(b)] above, the donee is assumed to make, the requirement of section 106 or, as the case may be, section 117 of the 1984 Act (minimum period of ownership or occupation) is fulfilled,—
(a)ownership by the donor prior to the disposal by way of gift shall be treated as ownership by the donee; and
(b)occupation by the donor prior to the disposal and any occupation by him after that disposal shall be treated as occupation by the donee.
(3)Where the property disposed of by way of gift consists of shares or securities falling within paragraph (c) of sub-paragraph (1) above, [F6relief shall not be available by virtue of Chapter II of Part V of the 1984 Act on the material transfer of value] unless—
(a)section 116 of the 1984 Act applies in relation to the value transferred by the disposal, and
(b)throughout the period beginning with the disposal and ending on the material date, the shares or securities are owned by the donee,
and for the purposes only of determining whether, on the transfer of value which, [F7by virtue of sub-paragraph (1A)(b) above], the donee is assumed to make, the requirements of subsection (1) of section 123 of the 1984 Act are fulfilled, it shall be assumed that the requirement in paragraph (b) of that subsection (as to ownership of the shares or securities) is fulfilled.
(4)In this paragraph, “the material transfer of value” means, as the case may require,—
(a)the transfer of value under section 4 of the 1984 Act on the death of the donor; or
(b)the transfer of value under subsection (4) of the principal section on the property concerned ceasing to be subject to a reservation.
(5)If the donee dies before the material transfer of value, then, as respects any time after his death, any reference to his personal representatives or, as the case may require, the person (if any) by whom the property, shares or securities concerned were taken under a testamentary dispostition made by the donee or under his intestacy (or partial intestacy).
Textual Amendments
F1Words substituted by Finance Act 1987 (c. 16, SIF 63:1), Sch. 8, para. 18(2), with effect from 17 March 1987.
F2Words repealed by Finance Act 1987 (c. 16, SIF 63:1),s. 58 and Sch. 8, para. 18(2), with effect from 17 March 1987.
F3Para. 8(1A) inserted by Finance Act 1987 (c. 16, SIF 63:1), Sch. 8, para. 18(3), with effect from 17 March 1987.
F4Words in Sch. 20 para. 8(1A)(a) substituted (in relation to transfers of value made on or after 10.3.1992) by Finance (No. 2) Act 1992 (c. 48), s. 73, Sch. 14 paras.7, 8, 9.
F5Words substituted by Finance Act 1987 (c. 16, SIF 63:1), Sch. 8, para. 18(4), with effect from 17 March 1987.
F6Words substituted by Finance Act 1987 (c. 16, SIF 63:1), Sch. 8, para. 18(5)(a), with effect from 17 March 1987.
F7Words substituted by Finance Act 1987 (c. 16, SIF 63:1), Sch. 8, para. 18(5)(b), with effect from 17 March 1987.