- Latest available (Revised)
- Point in Time (06/06/2022)
- Original (As enacted)
Point in time view as at 06/06/2022.
There are currently no known outstanding effects for the Inheritance Tax Act 1984, Section 89A.
Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.
(1)This section applies to property transferred by a person (“A”) into settlement on or after 22nd March 2006 if—
(a)A was beneficially entitled to the property immediately before transferring it into settlement,
(b)A satisfies the Commissioners for Her Majesty's Revenue and Customs that, when the property was transferred into settlement, A had a condition that it was at that time reasonable to expect would have such effects on A as to lead to A becoming [F3a person falling within any paragraph of the definition of “disabled person” in paragraph 1 of Schedule 1A to the Finance Act 2005].
(c)the property is held on trusts—
(i)under which, during the life of A, no interest in possession in the settled property subsists, and
(ii)which secure that Conditions 1 and 2 are met.
(2)Condition 1 is that if any of the settled property [F4or income arising from it] is applied during A's life for the benefit of a beneficiary, it is applied for the benefit of A.
(3)Condition 2 is that any power to bring the trusts mentioned in subsection (1)(c) above to an end during A's life is such that, in the event of the power being exercised during A's life, either—
(a)A or another person will, on the trusts being brought to an end, be absolutely entitled to the settled property, or
(b)on the trusts being brought to an end, a disabled person's interest within section 89B(1)(a) or (c) below will subsist in the settled property.
(4)If this section applies to settled property transferred into settlement by a person, the person shall be treated as beneficially entitled to an interest in possession in the settled property.
[F5(5)For the purposes of subsection (1)(b), assume—
(a)that A will meet any conditions as to residence or presence that are required to establish entitlement to the allowance, [F6disability assistance,] payment or increased pension in question,
(b)that there will be no provision made by regulations under any of the following—
(i)sections 67(1) and (2), 72(8), 104(3) and 113(2) of SSCBA 1992,
(ii)sections 67(1) and (2), 72(8), 104(3) and 113(2) of SSCB(NI)A 1992, and
(iii)sections 85 and 86 of WRA 2012 and the corresponding provision having effect in Northern Ireland, F7...
(c)that A will not be prevented from receiving the allowance, payment or increased pension in question by any of the following—
(i)section 113(1) of SSCBA 1992,
(ii)section 113(1) of SSCB(NI)A 1992,
(iii)section 87 of WRA 2012 and the corresponding provision having effect in Northern Ireland,
(iv)articles 61 and 64 of the Personal Injuries (Civilians) Scheme 1983 (S.I. 1983/686),
(v)article 53 of the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 2006 (S.I. 2006/606), and
(vi)article 42 of the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011 (S.I. 2011/517) [F8, and
(d)that there will be no provision made by regulations under section 31 of the SS(S)A 2018 for the reduction of the value of a payment of disability assistance to £0 when the person is—
(i)resident in a care home,
(ii)resident in an educational establishment,
(iii)undergoing medical or other treatment as an in-patient in a hospital or similar institution, or
(iv)undergoing imprisonment or detention in legal custody.]]
[F9(6A)The trusts on which the settled property is held are not to be treated as falling outside subsection (2) by reason only of—
(a)the trustees' having powers that enable them to apply otherwise than for the benefit of the disabled person amounts (whether consisting of income or capital, or both) not exceeding the annual limit,
(b)the trustees' having the powers conferred by section 32 of the Trustee Act 1925 (powers of advancement),
(c)the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by proviso (a) of subsection (1) of that section,
(d)the trustees' having the powers conferred by section 33 of the Trustee Act (Northern Ireland) 1958 (corresponding provision for Northern Ireland),
(e)the trustees' having those powers but free from, or subject to a less restrictive limitation than, the limitation imposed by subsection (1)(a) of that section, or
(f)the trustees' having powers to the like effect as the powers mentioned in any of paragraphs (b) to (e).
(6B)For the purposes of this section, the “annual limit” is whichever is the lower of the following amounts—
(a)£3,000, and
(b)3% of the amount that is the maximum value of the settled property during the period in question.
(6C)For those purposes the annual limit applies in relation to each period of 12 months that begins on 6 April.
(6D)The Treasury may by order made by statutory instrument—
(a)specify circumstances in which subsection (6A)(a) is, or is not, to apply in relation to a trust, and
(b)amend the definition of “the annual limit” in subsection (6B).
(6E)An order under subsection (6D) may—
(a)make different provision for different cases, and
(b)contain transitional and saving provision.
(6F)A statutory instrument containing an order under subsection (6D) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.]
(7)For the purposes of subsection (3) above, ignore—
(a)power to give directions as to the settled property that is exercisable jointly by the persons who between them are entitled to the entire beneficial interest in the property, and
(b)anything that could occur as a result of exercise of any such power.
[F10(8)In this section—
[F11“disability assistance” means disability assistance given in accordance with regulations made under section 31 of the SS(S)A 2018,]
“SSCBA 1992” means the Social Security Contributions and Benefits Act 1992,
“SSCB(NI)A 1992” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992, F12...
[F13“SS(S)A 2018” means the Social Security (Scotland) Act 2018, and]
“WRA 2012” means the Welfare Reform Act 2012.]]
Textual Amendments
F1Ss. 89A, 89B inserted (22.3.2006) by Finance Act 2006 (c. 25), s. 156, Sch. 20 paras. 6(1)(3)
F2Words in s. 89A heading substituted (with effect in accordance with Sch. 44 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 44 para. 7(7)
F3Words in s. 89A(1)(b) substituted (with effect in accordance with Sch. 44 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 44 para. 7(2)
F4Words in s. 89A(2) inserted (with effect in accordance with Sch. 44 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 44 para. 7(3)
F5S. 89A(5) substituted for s. 89A(5)(6) (with effect in accordance with Sch. 44 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 44 para. 7(4)
F6Words in s. 89A(5)(a) inserted (26.7.2021) by The Social Security (Scotland) Act 2018 (Disability Assistance, Young Carer Grants, Short-term Assistance and Winter Heating Assistance) (Consequential Provision and Modifications) Order 2021 (S.I. 2021/886), arts. 1(2), 2(2)(a)(i)
F7Word in s. 89A(5)(b) omitted (26.7.2021) by virtue of The Social Security (Scotland) Act 2018 (Disability Assistance, Young Carer Grants, Short-term Assistance and Winter Heating Assistance) (Consequential Provision and Modifications) Order 2021 (S.I. 2021/886), arts. 1(2), 2(2)(a)(ii)
F8S. 89A(5)(d) and word inserted (26.7.2021) by The Social Security (Scotland) Act 2018 (Disability Assistance, Young Carer Grants, Short-term Assistance and Winter Heating Assistance) (Consequential Provision and Modifications) Order 2021 (S.I. 2021/886), arts. 1(2), 2(2)(a)(iii)
F9Ss. 89A(6A)-(6F) inserted (with effect in accordance with Sch. 44 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 44 para. 7(5)
F10S. 89A(8) substituted (with effect in accordance with Sch. 44 para. 9 of the amending Act) by Finance Act 2013 (c. 29), Sch. 44 para. 7(6)
F11Words in s. 89A(8) inserted (26.7.2021) by The Social Security (Scotland) Act 2018 (Disability Assistance, Young Carer Grants, Short-term Assistance and Winter Heating Assistance) (Consequential Provision and Modifications) Order 2021 (S.I. 2021/886), arts. 1(2), 2(2)(b)(i)
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: