SCHEDULE 15Charge to income tax on benefits received by former owner of property
Election for application of inheritance tax provisions
22
(1)
This paragraph applies where—
(a)
a person (“the chargeable person”) would (apart from this paragraph) be chargeable under paragraph 8 (intangible property) for any year of assessment (“the initial year”) by reference to any property (“the relevant property”), and
(b)
he has not been chargeable under that paragraph in respect of any previous year of assessment by reference to the relevant property or any property which the relevant property represents or is derived from.
(2)
The chargeable person may elect in accordance with paragraph 23 that—
(a)
the preceding provisions of this Schedule shall not apply to him during the initial year and subsequent years of assessment by reference to the relevant property or any property which represents or is derived from the relevant property, but
(b)
so long as the conditions in sub-paragraph (3) are satisfied—
(i)
the relevant property and any property which represents or is derived from the relevant property shall be treated for the purposes of Part 5 of the 1986 Act (in relation to the chargeable person) as property subject to a reservationF1, but only so far as the chargeable person is not beneficially entitled to an interest in possession in the property concerned
F2(ii)
section 102(3) and (4) of that Act shall apply, but only so far as the chargeable person is not beneficially entitled to an interest in possession in the property concerned, and
(iii)
if the chargeable person is beneficially entitled to an interest in possession in the property concerned, sections 53(3) and (4) and 54 of IHTA 1984 (which deal with cases of property reverting to the settlor etc) shall not apply in relation to that property.
(3)
The conditions referred to in sub-paragraph (2)(b) are—
(a)
that the relevant property or the property which represents or is derived from the relevant property remains comprised in the settlement, and
(b)
that any income arising under the settlement would be treated by virtue of F3section 624 of ITTOIA 2005 as income of the chargeable person.