5A

Subsection (5)(a) above does not prevent this section from applying if or, as the case may be, to the extent that—

a

the property becomes settled property by virtue of the gift,

b

by reason of the donor’s spouse (“the relevant beneficiary”) becoming beneficially entitled to an interest in possession in the settled property, the disposal is or, as the case may be, is to any extent an exempt transfer by virtue of section 18 of the 1984 Act in consequence of the operation of section 49 of that Act (treatment of interests in possession),

c

at some time after the disposal, but before the death of the donor, the relevant beneficiary’s interest in possession comes to an end, and

d

on the occasion on which that interest comes to an end, the relevant beneficiary does not become beneficially entitled to the settled property or to another interest in possession in the settled property.

5B

If or, as the case may be, to the extent that this section applies by virtue of subsection (5A) above, it has effect as if the disposal by way of gift had been made immediately after the relevant beneficiary’s interest in possession came to an end.

5C

For the purposes of subsections (5A) and (5B) above—

a

section 51(1)(b) of the 1984 Act (disposal of interest in possession treated as coming to end of interest) applies as it applies for the purposes of Chapter 2 of Part 3 of that Act; and

b

references to any property or to an interest in any property include references to part of any property or interest.