Part IU.K. Agricultural property and settled property
Agricultural propertyU.K.
1(1)This paragraph applies where—U.K.
(a)there is a disposal of an asset which is, or is an interest in, agricultural property within the meaning of Chapter II of Part V of the M1Inheritance Tax Act 1984 (inheritance tax relief for agricultural property), and
(b)apart from this paragraph, the disposal would not fall within section 165(1) by reason only that the agricultural property is not used for the purposes of a trade carried on as mentioned in section 165(2)(a).
(2)Where this paragraph applies, section 165(1) shall apply in relation to the disposal if the circumstances are such that a reduction in respect of the asset—
(a)is made under Chapter II of Part V of the Inheritance Tax Act 1984 in relation to a chargeable transfer taking place on the occasion of the disposal, or
(b)would be so made if there were a chargeable transfer on that occasion, or
(c)would be so made but for section 124A of that Act (assuming, where there is no chargeable transfer on that occasion, that there were).
Marginal Citations
Settled propertyU.K.
2(1)If—U.K.
(a)the trustees of a settlement make a disposal otherwise than under a bargain at arm’s length of an asset within sub-paragraph (2) below, and
(b)a claim for relief under section 165 is made by the trustees and the person who acquires the asset (“the transferee”) or, where the trustees of a settlement are also the transferee, by the trustees making the disposal alone,
then, subject to sections 165(3), 166, 167[F1, 169, 169B and 169C], section 165(4) shall apply in relation to the disposal.
(2)An asset is within this sub-paragraph if—
(a)it is, or is an interest in, an asset used for the purposes of a trade, profession or vocation carried on by—
(i)the trustees making the disposal, or
(ii)a beneficiary who had an interest in possession in the settled property immediately before the disposal, or
(b)it consists of shares or securities of a trading company, or of the holding company of a trading group, where—
(i)the shares or securities are [F2not listed on a recognised stock exchange], or
(ii)not less than 25 per cent. of the voting rights exercisable by shareholders of the company in general meeting are exercisable by the trustees at the time of the disposal.
(3)Where section 165(4) applies by virtue of this paragraph, references to the trustees shall be substituted for the references in section 165(4)(a) to the transferor; and where it applies in relation to a disposal which is deemed to occur by virtue of section 71(1) or 72(1) section 165(7) shall not apply.
Textual Amendments
F1Words in Sch. 7 para. 2(1) substituted (with effect in accordance with Sch. 21 para. 10(4) of the amending Act) by Finance Act 2004 (c. 12), Sch. 21 para. 9(2)
F2Words in Sch. 7 para. 2(2)(b)(i) substituted (with effect in accordance with s. 90(5) of the amending Act) by Finance Act 2000 (c. 17), s. 90(3)
3(1)This paragraph applies where—U.K.
(a)there is a disposal of an asset which is, or is an interest in, agricultural property within the meaning of Chapter II of Part V of the M2Inheritance Tax Act 1984, and
(b)apart from this paragraph, the disposal would not fall within paragraph 2(1)(a) above by reason only that the agricultural property is not used for the purposes of a trade as mentioned in paragraph 2(2)(a) above.
(2)Where this paragraph applies paragraph 2(1) above shall apply in relation to the disposal if the circumstances are such that a reduction in respect of the asset—
(a)is made under Chapter II of Part V of the Inheritance Tax Act 1984 in relation to a chargeable transfer taking place on the occasion of the disposal, or
(b)would be so made if there were a chargeable transfer on that occasion, or
(c)would be so made but for section 124A of that Act (assuming, where there is no chargeable transfer on that occasion, that there were).
Marginal Citations