Finance Act 1987

15 (1) In section 227 of the 1984 Act (payment by instalments) for subsection (1A) there shall be substituted the following subsection—

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

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

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

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

(2) In subsection (1B) of that section for the words "subsection (1A) above" there shall be substituted "this section".

(3) After subsection (1B) of that section there shall be inserted the following subsection—

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

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

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