Finance Act 1980

89 Maintenance funds: charge of tax

(1) If in the case of a settlement in respect of which the Treasury have given a direction under section 84 of the [1976 c. 40.] Finance Act 1976 (maintenance funds for historic buildings)—

(a) any of the property comprised in the settlement (whether capital or income) is applied otherwise than as mentioned in paragraph (a)(i) or (ii) of subsection (3) of that section; or

(b) any of that property on ceasing to be comprised in the settlement devolves otherwise than on any such body or charity as is mentioned in paragraph (a)(ii) of that subsection,

tax shall be charged in accordance with subsection (2) below.

(2) Tax chargeable under this section shall be charged—

(a) on such an amount as, after deduction of the tax charged on it, is equal to the value of the property which is applied or which devolves as mentioned in subsection (1) above exclusive of so much, if any, of that value as is attributable to property falling within subsection (4) below; and

(b) at a rate or rates determined in accordance with Part I of Schedule 16 to this Act;

and Part II of that Schedule shall have effect with respect to the rate or rates at which tax is chargeable on subsequent occasions where tax has been previously charged under this section.

(3) The tax mentioned in paragraph (a) of subsection (2) above does not include any tax which is payable by a person for whose benefit the property is applied or on whom it devolves or which is payable out of that property; and where tax is chargeable on any occasion in accordance with that subsection the provisions of section 73 of the Finance Act 1976 and Schedule 10 to that Act (relief for business property) shall apply as if the trustees had made a transfer of value and the amount on which tax is chargeable were the value transferred by that transfer.

(4) Subject to subsections (5) and (6) below, the property the value of which is excluded from subsection (2)(a) above is—

(a) property to which the settlor or his spouse becomes beneficially entitled on the occasion on which tax would be chargeable under this section;

(b) property to which the settlor's widow or widower becomes beneficially entitled on that occasion if the settlor has died in the previous two years ;

(c) if the settlor has died after the settlement has taken effect but not more than four years later, property to which the settlor's widow or widower becomes beneficially entitled within thirty days of the expiration of six years from the date on which the settlement took effect;

(d) property which, within thirty days after the occasion on which tax would be chargeable under this section, becomes comprised in another settlement as a result of a transfer of value which is exempt under the said section 84.

(5) Subsection (4) above does not apply to any property if the person who becomes beneficially entitled to it or (in a case within paragraph (d)) makes the transfer of value has acquired it for a consideration in money or money's worth; and for the purposes of this subsection a person shall be treated as acquiring any property for a consideration in money or money's worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that or other property.

(6) Paragraphs (a), (b) and (c) of subsection (4) above do not apply unless the person who becomes beneficially entitled to the property is domiciled in the United Kingdom at the time when he becomes so entitled; and where tax is chargeable under this section in the case of a settlement (“the current settlement”) those paragraphs do not apply if the property—

(a) was previously comprised in another settlement; and

(b) ceased to be comprised in that settlement and became comprised in the current settlement in circumstances such that by virtue of paragraph (d) of that subsection or by virtue of the said section 84 or of section 90(1) below there was no charge to tax by reference to its value or there was a reduced charge to tax by virtue of section 90(3) below.

(7) The value to be excluded under subsection (2) (a) above as attributable to property falling within subsection (4)(d) above shall be—

(a) its value at the time when tax would be chargeable under this section; or

(b) its value at the time when it becomes comprised in the other settlement,

whichever is the less reduced, where the trustees of the other settlement give consideration for the property in money or money's worth, by the amount or value of that consideration.

(8) The persons liable for tax charged under subsection (2) above shall be each of the following, that is to say, the trustees of the settlement and, as respects tax on the value of property which devolves on any person or to which a person becomes beneficially entitled on the occasion on which the tax is chargeable, the person on whom it devolves or who becomes beneficially entitled to it; and in paragraphs 2(7), 12(4) and 19(1)(c) of Schedule 4 to the [1975 c. 7.] Finance Act 1975 (duty to deliver accounts and provisions as to payment of tax) after the words “section 78 of the Finance Act 1976 ” there shall be inserted the words “or section 89 of the Finance Act 1980 ”.

(9) Tax shall also be chargeable in accordance with the foregoing provisions of this section if any of the property comprised in a settlement to which subsection (1) above applies, on ceasing at any time to be comprised in the settlement, devolves on any such body or charity as is referred to in paragraph (b) of that subsection and at or before that time an interest under the settlement is or has been acquired for a consideration in money or money's worth by that or another such body or charity; but for the purposes of this subsection any acquisition from another such body or charity shall be disregarded.