Finance Act 1975

19 (1) Such part of the value transferred shall be attributable to a specific gift as corresponds to the value of the gift; but if or to the extent that the gift—

(a) is not a gift with respect to which the transfer is exempt or is outside the limit up to which the transfer is exempt; and

(b) does not bear its own tax ;

the amount corresponding to the value of the gift shall be taken to be such amount as, after deduction of tax at the assumed rate specified in sub-paragraph (3) below, would be equal to the value of the gift.

(2) Where any question arises as to which of two or more specific gifts are outside the limit up to which a transfer is exempt or as to the extent to which a specific gift is outside that limit—

(a) the excess shall be attributed to gifts not bearing their own tax before being attributed to gifts bearing their own tax; and

(b) subject to paragraph (a) above, the excess shall be attributed to the gifts in proportion to their values.

(3) For the purposes of this paragraph—

(a) the assumed rate is the rate found by dividing the assumed amount of tax by the value transferred ; and

(b) the assumed amount of tax is the amount of tax found by applying the rate or rates applicable under section 37 of this Act to the value transferred without regard to paragraphs 1 and 10 to 13 above.

(4) For the purposes of this paragraph, any liability of the transferor which is not to be taken into account under paragraph 1(3) of Schedule 10 to this Act shall be treated as a specific gift.