Finance Act 1981

4 (1) Where tax is chargeable under paragraph 3 above it shall be charged on the following amount, namely—

(a) if the disposal is a sale for full consideration in money or money's worth, on the net proceeds of the sale ;

(b) in any other case on the value of the interest or of the part disposed of, as the case may be, immediately before the time of the disposal,

and at the rate or rates at which it would have been chargeable on that death if that amount, and any amount on which tax was previously chargeable under that paragraph in relation to the death, had been included in the value transferred on death and the amount on which the tax is chargeable had formed the highest part of that value.

(2) The tax chargeable under paragraph 3 above shall not exceed the difference between the tax chargeable on the death and the tax which would have been chargeable on the death had paragraph 1 above not applied and had the value of the interest formed the highest part of the value of the estate.