3U.K.Section 86 does not apply if the settlor dies in the year.
4(1)This paragraph applies where for the purposes of section 86(1)(d) the settlor has no interest in the settlement at any time in the year except for one of the following reasons, namely, that—U.K.
(a)property is, or will or may become, applicable for the benefit of or payable to one of the persons falling within paragraph 2(3)(b) to [F1(db)] above,
(b)income is, or will or may become, applicable for the benefit of or payable to one of those persons, or
(c)one of those persons enjoys a benefit from property or income.
(2)This paragraph also applies where sub-paragraph (1) above is fulfilled by virtue of 2 or all of paragraphs (a) to (c) being satisfied by reference to the same person.
(3)Where this paragraph applies, section 86 does not apply if the person concerned dies in the year.
(4)In a case where—
(a)this paragraph applies, and
(b)the person concerned falls within paragraph 2(3)(b)[F2, (d) or (db)] above,
section 86 does not apply if during the year the person concerned ceases to be married to the settlor[F3, child or grandchild] concerned (as the case may be).
Textual Amendments
F1Word in Sch. 5 para. 4(1)(a) substituted (with effect in accordance with s. 131(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 22 para. 3(1)
F2Words in Sch. 5 para. 4(4)(b) substituted (with effect in accordance with s. 131(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 22 para. 3(2)(a)
F3Words in Sch. 5 para. 4(4) substituted (with effect in accordance with s. 131(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 22 para. 3(2)(b)
5(1)This paragraph applies where for the purposes of section 86(1)(d) the settlor has no interest in the settlement at any time in the year except for the reason that there are 2 or more persons, each of whom—U.K.
(a)falls within paragraph 2(3)(b) to [F4(db)] above, and
(b)stands to gain for the reason stated in sub-paragraph (2) below.
(2)The reason is that—
(a)property is, or will or may become, applicable for his benefit or payable to him,
(b)income is, or will or may become, applicable for his benefit or payable to him,
(c)he enjoys a benefit from property or income, or
(d)2 or all of paragraphs (a) to (c) above apply in his case.
(3)Where this paragraph applies, section 86 does not apply if each of the persons concerned dies in the year.
Textual Amendments
F4Word in Sch. 5 para. 5(1)(a) substituted (with effect in accordance with s. 131(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 22 para. 3(1)