(1)[F1Subject to subsections (2), (4) and (5) below] the tax charged on the value transferred by a chargeable transfer made by any transferor shall be charged at the following rate or rates, that is to say—
(a)if the transfer is the first chargeable transfer made by that transferor in the period of [F2seven years] ending with the date of the transfer, at the rate or rates applicable to that value under the . . . F3 Table in Schedule 1 to this Act;
(b)in any other case, at the rate or rates applicable under that Table to such part of the aggregate of—
(i)that value, and
(ii)the values transferred by previous chargeable transfers made by him in that period,
as is the highest part of that aggregate and is equal to that value.
[F4(2)Except as provided by subsection (4) below, the tax charged on the value transferred by a chargeable transfer made before the death of the transferor shall be charged at one-half of the rate or rates referred to in subsection (1) above.]
(3)In [F5the Table] in Schedule 1 to this Act any rate shown in the third column is that applicable to such portion of the value concerned as exceeds the lower limit shown in the first column but does not exceed the upper limit (if any) shown in the second column.
[F6(4)Subject to subsection (5) below, subsection (2) above does not apply in the case of a chargeable transfer made at any time within the period of seven years ending with the death of the transferor but, in the case of a chargeable transfer made within that period but more than three years before the death, the tax charged on the value transferred shall be charged at the following percentage of the rate or rates referred to in subsection (1) above—
(a)where the transfer is made more than three but not more than four years before the death, 80 per cent;
(b)where the transfer is made more than four but not more than five years before the death, 60 per cent;
(c)where the transfer is made more than five but not more than six years before the death, 40 per cent; and
(d)where the transfer is made more than six but not more than seven years before the death, 20 per cent.
(5)If, in the case of a chargeable transfer made before the death of the transferor, the tax which would fall to be charged in accordance with subsection (4) above is less than the tax which would have been chargeable (in accordance with subsection (2) above) if the transferor had not died within the period of seven years beginning with the date of the transfer, subsection (4) above shall not apply in the case of that transfer.]
Textual Amendments
F1Finance Act 1986 Sch. 19, para. 2(1)(a),with effect from 18March 1986.
F2Finance Act 1986 Sch. 19, para. 2(1)(b),with effect from 18March 1986.Originally
“ten years”.
F3 Repealed by Finance Act 1986 s. 101(3)and Sch. 19, para. 2(1)(c),with effect from 18March 1986.
F4Finance Act 1986 Sch. 19, para. 2(2),with effect from 18March 1986.Originally
“(2) Except as otherwise provided, the first Table in Schedule 1 to this Act is the appropriate Table for a transfer made on or at any time within three years of the death of the transferor, and the second Table in that Schedule is the appropriate Table for any other transfer.”
F5Finance Act 1986 Sch. 19, para. 2(3),with effect from 18March 1986.Originally
“each of the Tables”.
F6Finance Act 1986 Sch. 19, para. 2(4),with effect from 18March 1986.