1(1)This paragraph applies where—
(a)there is a disposal of an asset which is, or is an interest in, agricultural property within the meaning of [F1Chapter II of Part V of the Capital Transfer Tax Act 1984] (capital transfer tax relief for agricultural property), and
(b)apart from this paragraph, the disposal would not fall within [F2section 126(1)] of this Act by reason only that the agricultural property is not used for the purposes of a trade carried on as mentioned in [F2section 126(1A)(a)].
(2)Where this paragraph applies, section 126(1) of this Act shall apply in relation to the disposal if the circumstances are such that a reduction [F3at the rate of 50 per cent.] in respect of the asset—
(a)is made under [F1Chapter II of Part V of the Capital Transfer Tax Act 1984] in relation to a chargeable transfer taking place on the occasion of the disposal, or
(b)would be so made if there were a chargeable transfer on that . . . F4[F5, or]
[F6(c)would be so made but for section 124A of that Act (assuming, where there is no chargeable transfer on that occasion, that there were)].
Textual Amendments
F1Words substituted by Inheritance Tax Act 1984 (c. 51), s. 276 and Sch. 8 para. 12
F2Words substituted by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 para. 3(2) in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
F3Words substituted by Inheritance Tax Act 1984 (c. 51), s. 276 and Sch. 8 para. 12 and repealed by Finance Act 1989 (c. 26, SIF 63:2), ss. 124, 187, Schs. 14 and 17 Part VII in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
F4Words repealed by Finance Act 1981 (c. 35, SIF 63:2), s. 139 and Sch. 19 Pt. VIII
F5 “, or” inserted by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 para. 3(2) in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
F6Sch. 4 para. 1(2)(c) inserted by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 para. 3(2) in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
Modifications etc. (not altering text)
C1See Finance Act 1986 (c. 41), s. 100 for occasions when Capital Transfer Tax Act 1984 (c. 51, SIF 65) referred to as Inheritance Tax Act 1984 (c. 51)
[F72(1)If—
(a)the trustees of a settlement make a disposal otherwise than under a bargain at arm’s length of an asset within sub-paragraph (2) below, and
(b)a claim for relief under section 126 of this Act is made by the trustees and the person who acquires the asset (in this Schedule referred to as “the transferee”) or, where the trustees of a settlement are also the transferee, by the trustees making the disposal alone,
then, subject to subsection (2) of section 126 and to sections 126A and 126B, subsection (3) of section 126 shall apply in relation to the disposal.
(2)An asset is within this sub-paragraph if—
(a)it is, or is an interest in, an asset used for the purposes of a trade, profession or vocation carried on by—
(i)the trustees making the disposal, or
(ii)a beneficiary who had an interest in possession in the settled property immediately before the disposal, or
(b)it consists of shares or securities of a trading company, or of the holding company of a trading group, where—
(i)the shares or securities are neither quoted on a recognised stock exchange nor dealt in on the Unlisted Securities Market, or
(ii)not less than 25 per cent. of the voting rights exercisable by shareholders of the company in general meeting are exercisable by the trustees at the time of the disposal.
(3)Where section 126(3) applies by virtue of this paragraph, references to the trustees shall be substituted for the references in sections 126(3)(a) and 126C to the transferor; and where it applies in relation to a disposal which is deemed to occur by virtue of section 54(1) or 55(1) of this Act, section 126(6) shall not apply.]
Textual Amendments
F7Sch. 4 para. 2 substituted by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 para. 3(3) in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
3(1)This paragraph applies where—
(a)there is, [F8by virtue of section 54(1) [F9or 55(1)] of this Act (settled property)], a disposal of an asset which is, or is an interest in, agricultural property within the meaning of [F10Chapter II of Part V of the Capital Transfer Tax Act 1984], and
(b)apart from this paragraph, the disposal would not fall within paragraph [F112(1)(a)] above by reason only that the agricultural property is not used for the purposes of a trade as mentioned in [F11paragraph 2(2)(a) above].
(2)Where this paragraph applies, paragraph 2(1) above shall apply in relation to the disposal if the circumstances are such that a reduction [F12at the rate of 50 per cent.] in respect of the asset—
(a)is made under [F10Chapter II of Part V of the Capital Transfer Tax Act 1984] in relation to a chargeable transfer taking place on the occasion of the disposal, or
(b)would be so made if there were a chargeable transfer on that occasion . . . F13[F14, or]
[F15(c)would be so made but for section 124A of that Act (assuming, where there is no chargeable transfer on that occasion, that there were)].
Textual Amendments
F8Words repealed by Finance Act 1989 (c. 26, SIF 63:2), ss. 124, 187, Schs. 14 para. 3(4) and 17 Part VII in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
F9Words repealed by Finance Act 1982 (c. 39, SIF 63:2), s. 157 and Sch. 22 Part VI in relation to disposals after 5 April 1982
F10Words substituted by Inheritance Tax Act 1984 (c. 51), s. 276 and Sch. 8 para. 12
F11Words substituted by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 paras. (4)(a), (4)(b) in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
F12Words inserted by Inheritance Tax Act 1984 (c. 51), s. 276 and Sch. 8 para. 12 and repealed by Finance Act 1989 (c. 26, SIF 63:2), ss. 124, 187, Schs. 14 para. 3(4) and 17 Part VII in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
F13Words repealed by Finance Act 1981 (c. 35, SIF 63:2), s. 139 and Sch. 19 Pt. VIII
F14 “, or” inserted by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 paras. (4)(a), (4)(b) in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)
F15Sch. 4 para. 3(2)(c) inserted by Finance Act 1989 (c. 26, SIF 63:2), s. 124 and Sch. 14 paras. (4)(a), (4)(b) in relation to disposals on or after 14 March 1989 (except where relief given under Finance Act 1980 (c. 48, SIF 63:1), s. 79 in respect of a disposal before that date)