Finance Act 1978

62 Reduction of tax

(1) For the Tables in section 37(3) of the [1975 c. 7.] Finance Act 1975 (rates of tax) there shall be substituted the Tables in Schedule 10 to this Act.

(2) Subsection (1) above applies to any chargeable transfer made after 26th October 1977.

(3) Where a person who has made a chargeable transfer on or before the said 26th October dies after that date and within three years of the transfer, additional tax shall be chargeable by reason of his death only if, and to the extent that, it would have been so chargeable if the first of the new Tables had applied to that transfer.

(4) Where the rate of tax applicable to a capital distribution made after the said 26th October falls to be determined under sub-paragraph (2) of paragraph 7 of Schedule 5 to the said Act of 1975 by reference to a relevant transfer made on or before that date, the amount of tax referred to in paragraph (a) of that sub-paragraph shall be calculated as if the second of the new Tables had applied to that transfer.

(5) Where the value of any trees or underwood has been left out of account under Schedule 9 to the said Act of 1975 in determining the value transferred by the chargeable transfer made on a death on or before the said 26th October and tax is chargeable under paragraph 2 of that Schedule on a disposal of the trees or underwood after that date, the rate or rates mentioned in paragraph 3 of that Schedule shall be determined as if the first of the new Tables had applied to that transfer.

(6) Where tax is chargeable under section 78 of the [1976 c. 40.] Finance Act 1976 (works of art etc.) by reason of a chargeable event occurring after the said 26th October and the rate or rates at which it is charged fall to be determined under the provisions of section 79(1)(b)(ii) or 81(4)(b) of that Act by reference to a death which occurred, or a settlement which ceased to exist, on or before that date, those provisions shall have effect as if the new Tables had been in force at the time of the death or when the settlement ceased to exist.

(7) Any question whether any, and if so what, tax is repayable or ceases to be payable by virtue of subsection (1)(a) of section 87 of the said Act of 1976 (mutual transfers) shall, where—

(a) the donor's transfer was on or before the said 26th October; and

(b) the donee's transfer is after that date,

be determined as if the new Tables had applied to the donor's transfer; but this subsection shall not be construed as affecting the amount of tax which, under subsection (3) of that section, falls to be taken into account in calculating the cancelled value.

(8) In subsection (2) above the reference to a chargeable transfer made after the said 26th October does not include a reference to any chargeable transfer which by virtue of section 114(2) of the said Act of 1976 (transfers reported late) is treated as made after that date but was in fact made on or before it.