(1) For the purposes of section 179(1)(b) above, if—
(a) at any time after the death in question (whether during or after the period of twelve months immediately following the date of the death) the appropriate person receives any capital payment or payments which is or are attributable to any qualifying investments comprised in the deceased’s estate immediately before his death, and
(b) those investments are sold by him within that period,
the price for which those investments were sold or, as the case may be, the best consideration referred to in section 179(1)(b) shall be taken to be increased by an amount equal to the capital payment or, as the case may be, the aggregate of the capital payments, referred to in paragraph (a) above.
(2) If the appropriate person receives or becomes entitled to receive in respect of any qualifying investments a provisional allotment of shares in or debentures of a company and he disposes of his rights, the amount of the consideration for the disposal shall be treated for the purposes of this section as a capital payment attributable to those investments.
(3) In this section “capital payment”, in relation to any investment, does not include the price paid on the sale of the investment but, subject to that, includes any money or money’s worth which does not constitute income for the purposes of income tax.
For the purposes of section 179(1)(a) above, if—
(a) at any time after the death in question (whether during or after the period of twelve months immediately following the date of the death) the appropriate person pays an amount in pursuance of a call in respect of any qualifying investments comprised in the deceased’s estate immediately before his death, and
(b) those investments are sold by the appropriate person within that period,
the value on death of those investments shall be the aggregate of the amount so paid and their value as determined apart from this Chapter.
(1) This section applies in any case where, within the period of twelve months immediately following the date of the death in question, there occurs in relation to any qualifying investments comprised in the deceased’s estate immediately before his death (in this section referred to as “the original holding”) a transaction to which 127 of the 1992 Act applies, that is to say—
(a) a reorganisation, within the meaning of section 126(1) of that Act; or
(b) the conversion of securities within the meaning of section 132 of that Act; or
(c) the issue by a company of shares or debentures in exchange for shares in or debentures of another company in such circumstances that section 135 of that Act applies; or
(d) the issue by a company of shares or debentures under such an arrangement as is referred to in section 136 of that Act;
or any transaction relating to a unit trust scheme which corresponds to any of the transactions referred to in paragraphs (a) to (d) above and to which section 127 of that Act applies by virtue of section 99 of that Act.
(2) Where this section applies, the holding of investments which, as the result of the transaction, constitutes a new holding within the meaning of section 126(1) shall be treated for the purposes of this Chapter as being the same as the original holding; and references in the following provisions of this section to the new holding shall be construed accordingly.
(3) If the appropriate person gives, or becomes liable to give, as part of or in connection with the transaction concerned, any consideration for the new holding or any part of it, then, for the purposes of subsection (5) below, the value on death of the new holding shall be treated as the aggregate of—
(a) the value on death of the original holding, and
(b) an amount equal to that consideration,
and in any other case the value on death of the new holding shall be taken to be the same as the value on death of the original holding.
(4) For the purposes of subsection (3) above, there shall not be treated as consideration given for the new holding or any part of it—
(a) any surrender, cancellation or other alteration of any of the investments comprised in the original holding or of the rights attached thereto, or
(b) any consideration consisting of any application, in paying up the new holding or any part of it, of assets of the company concerned or of any dividend or other distribution declared out of those assets but not made.
(5) If, within the period referred to in subsection (1) above, the appropriate person sells any investments comprised in the new holding, the value on death of those investments shall be determined by the formula—
Vs
(
H
—
S
)
(
Vs
+
Vr
)
where—
Vs is the sale value of the investments,
Vr is the market value at the time of the sale of any investments remaining in the new holding after the sale,
H is the value on death of the new holding, and
S is the value on death of any investments which were originally comprised in the new holding but have been sold on a previous occasion or occasions.
(6) For the purposes of subsection (5) above the market value of any investments at any time means the value which they would (apart from this Chapter) have for the purposes of this Act if they were comprised in the estate of a person who died at that time.
(1) If—
(a) within the period of twelve months immediately following the date of the death in question, the appropriate person exchanges (with or without any payment by way of equality of exchange) any qualifying investments comprised in the deceased’s estate immediately before his death, and
(b) the market value of those investments is at the date of the exchange greater than their value on death,
then, regardless of the nature of the property taken in exchange, they shall be treated for the purposes of this Chapter as having been sold at the date of the exchange for a price equal to that market value.
(2) This section shall not apply in any case where the exchange falls within section 183(1) above; and section 183(6) shall apply for the purposes of subsection (1) above as it applies for the purposes of section 183(5).
(1) If, at any time within the period of twelve months immediately following the date of the death in question, the appropriate person sells any investments which form part of a holding of investments which are all of the same description and consist of—
(a) investments comprised in the deceased’s estate immediately before his death, and
(b) investments acquired by the appropriate person, by purchase or otherwise, after the death but not in the circumstances in which section 183 above applies,
the investments so sold shall be apportioned for the purposes of this Chapter between those falling within paragraph (a) and those falling within paragraph (b) above in the same proportion as, immediately before the sale, the investments comprised in the holding and falling within paragraph (a) above bore to the investments so comprised and falling within paragraph (b) above.
(2) For the purposes of this section, if the appropriate person holds investments of any description in the capacity of personal representative or trustee, the investments shall not be treated as forming part of the same holding as investments which, though of the same description, are held by him otherwise than in that capacity.
(3) Section 180(3) above shall have effect for the purposes of this section as it has effect for the purposes of section 180(2).
(1) In any case where—
(a) part only of a holding of qualifying investments is comprised in a person’s estate, and
(b) investments included in that holding are sold by the appropriate person within the period of twelve months immediately following the date of the death,
this Chapter shall apply as if the entirety of the holding were comprised in the estate and, if a claim is made in respect of the investments referred to in paragraph (b) above, the taxable fraction of the value of the investments to which the claim relates, as determined under this Chapter, shall be the value of that part of those investments which is comprised in the estate.
(2) In subsection (1) above, “taxable fraction” means the fraction of which the numerator is the value, as determined apart from this Chapter, of the part of the holding referred to in paragraph (a) of that subsection and the denominator is the value, as so determined, of the entirety of that holding.
(1) Where any qualifying investments comprised in a person’s estate immediately before his death are—
(a) cancelled within the period of twelve months immediately following the date of the death without being replaced by other shares or securities, and
(b) held, immediately before cancellation, by the appropriate person,
they shall be treated for the purposes of this Chapter as having been sold by the appropriate person for a nominal consideration (one pound) immediately before cancellation.
(2) Where any qualifying investments are included in the calculation under section 179(1) above by virtue of this section, paragraph (b) of that subsection shall have effect, so far as relating to those investments, with the omission of the words from “or” to the end.
(1) This section applies to any qualifying investments comprised in a person’s estate immediately before his death in respect of which listing on a recognised stock exchange ... is suspended at the end of the period of twelve months immediately following the date of the death (“the relevant period”).
(2) Where—
(a) any qualifying investments to which this section applies are, at the end of the relevant period, held by the appropriate person, and
(b) the value on death of those investments exceeds their value at the end of that period,
they shall be treated for the purposes of this Chapter as having been sold by the appropriate person immediately before the end of that period for a price equal to their value at that time.
(3) Where any qualifying investments are included in the calculation under section 179(1) above by virtue of this section, paragraph (b) of that subsection shall have effect, so far as relating to those investments, with the omission of the words from “or” to the end.
187 Attribution of values to specific investments.
(1) This section shall have effect in determining the value for the purposes of this Act (and, accordingly, the market value for the purposes of capital gains tax under section 274 of the 1992 Act) of any investment (in this section referred to as a “specific investment”) which is included among the investments to which a claim relates.
(2) Subject to the following provisions of this section, the value of a specific investment shall be its sale value.
(3) Subject to the following provisions of this section, in a case where the calculation of the loss on sale of the investments to which a claim relates is affected by section 180 above—
(a) if the value on death of a specific investment exceeds its sale price, the value of that investment shall be the aggregate of its sale value and an amount equal to the relevant proportion of the difference between its sale price and its value on death; and
(b) if the sale price of a specific investment exceeds its value on death, the value of the investment shall be its sale value less an amount equal to the relevant proportion of the difference between its value on death and its sale price.
(4) For the purposes of subsections (2) and (3) above, the sale value of a specific investment in respect of which an amount has been paid in pursuance of a call, as mentioned in section 182 above, shall be reduced by the amount so paid in respect of that investment.
(5) In a case where, by virtue of subsection (3) of section 183 above, the value on death of the new holding, within the meaning of that section, includes an amount equal to the consideration referred to in that subsection, the sale value of any specific investment comprised in the new holding shall be reduced, for the purposes of subsections (2) and (3) above, by an amount which bears to that consideration the like proportion as the value on death of the specific investment sold bears to the value on death of the whole of the new holding.
(6) In subsection (3) above “sale price”, in relation to a specific investment, means the price for which the investment was sold by the appropriate person or, if it is greater, the best consideration which could reasonably have been obtained for the specific investment at the time of the sale; and section 181 above shall apply for the purposes of this subsection as it applies for the purposes of section 179(1)(b).
In any case where, apart from this section, the loss on sale of any investments—
(a) in respect of which an amount has been paid in pursuance of a call as mentioned in section 182 above, or
(b) which are sold as mentioned in section 183(5) above,
would exceed their value as determined apart from this Chapter, their sale value shall be treated for the purposes of sections 179(2) and 187 above as being of such an amount that the loss on sale would be equal to their value as so determined.
(1) Subject to subsection (2) below, for the purposes of this Chapter where any investments are sold or purchased by the appropriate person the date on which they are sold or purchased shall be taken to be the date on which he entered into a contract to sell or purchase them.
(2) If the sale or purchase of any investments by the appropriate person results from the exercise (whether by him or by any other person) of an option, then, for the purposes of this Chapter, the date on which the investments are sold or purchased shall be taken to be the date on which the option was granted.
(1) In this Chapter—
“the appropriate person”, in relation to any interest in land comprised in a person’s estate immediately before his death, means the person liable for inheritance tax attributable to the value of that interest or, if there is more than one such person and one of them is in fact paying the tax, that person;
“interest in land” does not include any estate, interest or right by way of mortgage or other security;
“sale price”, in relation to any interest in land, means the price for which it is sold or, if greater, the best consideration that could reasonably have been obtained for it at the time of the sale;
“sale value”, in relation to any interest in land, means its sale price as increased or reduced under the following provisions of this Chapter;
“value on death”, in relation to any interest in land comprised in a person’s estate immediately before his death, means the value which, apart from this Chapter, (and apart from section 176 above) would be its value as part of that estate for the purposes of this Act.
(2) Any reference in this Chapter to the interests to which a claim relates is a reference to the interests to which section 191(1) below applies by virtue of the claim.
(3) For the purposes of this Chapter—
(a) the personal representatives of the deceased, and
(b) the trustees of a settlement,
shall each be treated as a single and continuing body of persons (distinct from the persons who may from time to time be the personal representatives or trustees).
(4) In any case where, for the purposes of this Chapter, it is necessary to determine the price at which any interest was purchased or sold or the best consideration that could reasonably have been obtained on the sale of any interest, no account shall be taken of expenses (whether by way of commission, stamp duty or stamp duty land tax or otherwise) which are incidental to the sale or purchase.
(1) Where—
(a) an interest in land is comprised in a person’s estate immediately before his death and is sold by the appropriate person within the period of three years immediately following the date of the death, and
(b) the appropriate person makes a claim under this Chapter stating the capacity in which he makes it,
the value for the purposes of this Act of that interest and of any other interest in land comprised in that estate and sold within that period by the person making the claim acting in the same capacity shall, subject to the following provisions of this Chapter, be its sale value.
(1A) A claim under this Chapter must be made not more than 4 years after the end of the period mentioned in subsection (1)(a).
(2) Subsection (1) above shall not apply to an interest if its sale value would differ from its value on death by less than the lower of—
(a) £1,000, and
(b) 5 per cent of its value on death.
(3) Subsection (1) above shall not apply to an interest if its sale is—
(a) a sale by a personal representative or trustee to—
(i) a person who, at any time between the death and the sale, has been beneficially entitled to, or to an interest in possession in, property comprising the interest sold, or
(ii) the spouse or civil partner or a child or remoter descendant of a person within sub-paragraph (i) above, or
(iii) trustees of a settlement under which a person within sub-paragraph (i) or (ii) above has an interest in possession in property comprising the interest sold; or
(b) a sale in connection with which the vendor or any person within sub-paragraph (i), (ii) or (iii) of paragraph (a) above obtains a right to acquire the interest sold or any other interest in the same land;
and for the purposes of this subsection a person shall be treated as having in the property comprised in an unadministered estate (within the meaning of section 91(2) above) the same interest as he would have if the administration of the estate had been completed.
(1) This section applies where a claim is made under this Chapter and, at any time during the period beginning on the date of the death and ending four months after the last of the sales referred to in section 191(1) above, the person making the claim purchases any interests in land in the same capacity as that in which he makes the claim.
(2) If the aggregate of the purchase prices of all the interests purchased as mentioned in subsection (1) above equals or exceeds the aggregate of the sale prices (as adjusted under sections 193 to 195 below) of all the interests to which the claim relates, this Chapter shall not apply in relation to the claim; but otherwise subsection (3) below shall have effect, and in that subsection “the appropriate fraction” means the fraction of which—
(a) the numerator is the aggregate of the said purchase prices, and
(b) the denominator is the aggregate of the said sale prices.
(3) Subject to subsection (4) below, where this subsection has effect an addition shall be made to the sale price of every interest to which the claim relates; and the amount of the addition shall be equal to the appropriate fraction of the difference between the value on death of the interest and its sale price (as adjusted under sections 193 to 196 below).
(4) Where the value on death of an interest is less than its sale price (as adjusted under sections 193 to 196 below) subsection (3) above shall apply as if it provided for a reduction instead of an increase in the sale price.
(1) Where the conditions mentioned in subsection (2) below are not satisfied in relation to any interest to which the claim relates then, subject to subsections (3) and (4) below, an addition shall be made to the sale price of the interest; and the amount of the addition shall be equal to the difference between—
(a) the value on death of the interest, and
(b) what that value would have been if the circumstances prevailing at the date of the sale and by reason of which the conditions are not satisfied had prevailed immediately before the death.
(2) The conditions referred to in subsection (1) above are—
(a) that the interest was the same in all respects and with the same incidents at the date of the death and at the date of the sale; and
(b) that the land in which the interest subsists was in the same state and with the same incidents at the date of the death and at the date of the sale.
(3) If after the date of the death but before the date of the sale compensation becomes payable under any enactment to the appropriate person or any other person liable for tax attributable to the value of the interest—
(a) because of the imposition of a restriction on the use or development of the land in which the interest subsists, or
(b) because the value of the interest is reduced for any other reason,
the imposition of the restriction or the other cause of the reduction in value shall be ignored for the purposes of subsections (1) and (2) above, but there shall be added to the sale price of the interest an amount equal to the amount of compensation.
(4) Where the value on death of an interest is less than it would have been as mentioned in subsection (1) above, that subsection shall apply as if, instead of providing for an addition to be made to the sale price, it provided for that price to be reduced to what it would have been if the change in circumstances by reason of which the conditions mentioned in subsection (2) above are not satisfied had not occurred.
(1) Where the claim relates to an interest which is the interest of a lessee under a lease the duration of which at the date of the death does not exceed fifty years, an addition shall be made to the sale price of the interest; and the amount of the addition shall be equal to the appropriate fraction of the value on death of the interest.
(2) In subsection (1) above, “the appropriate fraction” means the fraction—
P
(
1
)
-
P
(
2
)
P
(
1
)
where—
P(1) is the percentage that would be derived from the Table in paragraph 1 of Schedule 8 to the 1992 Act for the duration of the lease at the date of the death, and
P(2) is the percentage that would be so derived for the duration of the lease at the date of the sale.
If in determining the value on death of any interest to which the claim relates, any other interests, whether in the same or other land, were taken into account, an addition shall be made to the sale price of the interest; and the amount of the addition shall be equal to the difference between the value on death of the interest and the value which would have been the value on death if no other interests had been taken into account.
(1) This section applies where a person who makes a claim under this Chapter, acting in the same capacity as that in which he makes the claim—
(a) sells an interest to which section 191(1) would apply but for section 191(3), or
(b) within the period of three years immediately following the date of the death exchanges (with or without any payment by way of equality of exchange) any interest in land which was comprised in the deceased’s estate immediately before his death.
and the sale price of the interest, or in the case of an exchange its market value at the date of the exchange, exceeds its value on death.
(2) Where this section applies, an addition shall be made to the sale price of any interest to which the claim relates; and the amount of the addition—
(a) if the claim relates to one interest only, shall be equal to the excess referred to in subsection (1) above, and
(b) if the claim relates to more than one interest, shall be equal to the appropriate fraction of that excess.
(3) In subsection (2) above “the appropriate fraction” in relation to any interest to which the claim relates is the fraction of which—
(a) the numerator is the difference between the value on death of that interest and its sale price (as adjusted under sections 193 to 195 above) and
(b) the denominator is the aggregate of that difference and the corresponding differences for all the other interests to which the claim relates;
and the aggregate referred to in paragraph (b) above shall be calculated without regard to which is the greater, in the case of any particular interest, of its value on death and its sale price.
197 Compulsory acquisition more than three years after death.
(1) If after the end of the period of three years immediately following the date of the death an interest in land is acquired from the appropriate person in pursuance of a notice to treat served before the death or within that period by an authority possessing powers of compulsory acquisition, this Chapter shall apply in relation to the interest as it applies in relation to interests sold within that period.
(2) Subsection (1) above shall not have effect in relation to an interest if its sale value would exceed its value on death.
(3) In determining the period referred to in section 192(1) above, no account shall be taken of the sale of an interest in relation to which subsection (1) above has effect; and if the claim relates only to such interests, section 192 shall not apply in relation to the claim.
(1) Where an interest in land—
(a) is comprised in a person’s estate immediately before his death, and
(b) is sold by the appropriate person in the fourth year immediately following the date of the death, otherwise than in circumstances in which section 197(1) above has effect,
the interest shall be treated, for the purposes of section 191(1) above, as having been sold within the period of three years immediately following the date of the death.
(2) Subsection (1) above shall not have effect in relation to an interest if its sale value would exceed its value on death.
(3) In determining the period referred to in section 192(1) above, no account shall be taken of the sale of an interest in relation to which subsection (1) above has effect; and if the claim relates only to such interests, section 192 shall not apply in relation to the claim.
(4) In applying section 196(1) above, no account shall be taken, for the purposes of paragraph (a) of that subsection, of an interest in relation to which subsection (1) above has effect.
(1) Subject to the following subsections, the date on which an interest in land is sold or purchased by the appropriate person shall for the purposes of this Chapter be taken to be the date on which he enters into a contract to sell or purchase it.
(2) If the sale or purchase of any interest by the appropriate person results from the exercise (whether by him or by any other person) of an option granted not more than six months earlier, the date on which the interest is sold or purchased shall be taken to be the date on which the option was granted.
(3) If an interest is acquired from the appropriate person in pursuance of a notice to treat served by an authority possessing powers of compulsory acquisition, the date on which the interest is sold shall, subject to subsection (4) below, be taken to be the date on which compensation for the acquisition is agreed or otherwise determined (variations on appeal being disregarded for this purpose) or, if earlier, the date when the authority enter on the land in pursuance of their powers.
(4) If an interest in land is acquired from the appropriate person—
(a) in England, Scotland or Wales by virtue of a general vesting declaration within the meaning of the Compulsory Purchase (Vesting Declarations) Act 1981 or, in Scotland, Schedule 24 to the Town and Country Planning (Scotland) Act 1972, or
(b) in Northern Ireland, by way of a vesting order,
the date on which it is sold by the appropriate person shall be taken to be the last day of the period specified in the declaration or, in Northern Ireland, the date on which the vesting order becomes operative.
(1) The persons liable for the tax on the value transferred by a chargeable transfer made by a disposition (including any omission treated as a disposition under section 3(3) above) of the transferor are—
(a) the transferor;
(b) any person the value of whose estate is increased by the transfer;
(c) so far as the tax is attributable to the value of any property, any person in whom the property is vested (whether beneficially or otherwise) at any time after the transfer, or who at any such time is beneficially entitled to an interest in possession in the property;
(d) where by the chargeable transfer any property becomes comprised in a settlement, any person for whose benefit any of the property or income from it is applied.
(2) Subsection (1)(a) above shall apply in relation to—
(a) the tax on the value transferred by a potentially exempt transfer; and
(b) so much of the tax on the value transferred by any other chargeable transfer made within seven years of the transferor’s death as exceeds what it would have been had the transferor died more than seven years after the transfer,
with the substitution for the reference to the transferor of a reference to his personal representatives.
(3) A purchaser of property, and a person deriving title from or under such a purchaser, shall not by virtue of subsection (1)(c) above be liable for tax attributable to the value of the property unless the property is subject to an Inland Revenue charge.
(4) For the purposes of this section—
(a) any person who takes possession of or intermeddles with, or otherwise acts in relation to, property so as to become liable as executor or trustee (or, in Scotland, any person who intromits with property or has become liable as a vitious intromitter), and
(b) any person to whom the management of property is entrusted on behalf of a person not of full legal capacity,
shall be treated as a person in whom the property is vested.
(5) References in this section to any property include references to any property directly or indirectly representing it.
(1) The persons liable for the tax on the value transferred by a chargeable transfer made (under section 4 above) on the death of any person are . . . —
(a) so far as the tax is attributable to the value of property which either—
(i) was not immediately before the death comprised in a settlement, or
(ii) was so comprised and consists of land in the United Kingdom which devolves upon or vests in the deceased’s personal representatives,
the deceased’s personal representatives;
(b) so far as the tax is attributable to the value of property which, immediately before the death, was comprised in a settlement, the trustees of the settlement;
(c) so far as the tax is attributable to the value of any property, any person in whom the property is vested (whether beneficially or otherwise) at any time after the death, or who at any such time is beneficially entitled to an interest in possession in the property;
(d) so far as the tax is attributable to the value of any property which, immediately before the death, was comprised in a settlement, any person for whose benefit any of the property or income from it is applied after the death.
(1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) A purchaser of property, and a person deriving title from or under such a purchaser, shall not by virtue of subsection (1)(c) above be liable for tax attributable to the value of the property unless the property is subject to an Inland Revenue charge.
(3) For the purposes of subsection (1) above a person entitled to part only of the income of any property shall, notwithstanding anything in section 50 above, be deemed to be entitled to an interest in the whole of the property.
(4) Subsections (4) and (5) of section 199 above shall have effect for the purposes of this section as they have effect for the purposes of that section.
(1) The persons liable for the tax on the value transferred by a chargeable transfer made under Part III of this Act are—
(a) the trustees of the settlement;
(b) any person entitled (whether beneficially or not) to an interest in possession in the settled property;
(c) any person for whose benefit any of the settled property or income from it is applied at or after the time of the transfer;
(d) where the transfer is made during the life of the settlor and the trustees are not for the time being resident in the United Kingdom, the settlor.
(2) Where the chargeable transfer is made within seven years of the transferor’s death but is not a potentially exempt transfer, subsection (1)(d) above shall not apply in relation to so much of the tax as exceeds what it would have been had the transferor died more than seven years after the transfer.
(3) Subsection (1)(d) above shall not apply in relation to a settlement made before 11th December 1974 if the trustees were resident in the United Kingdom when the settlement was made, but have not been resident there at any time during the period between 10th December 1974 and the time of the transfer.
(3A) Subsection (1)(d) above shall not apply in relation to the tax chargeable on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer in a case where the settlement was made before 17th March 1987 if the trustees were resident in the United Kingdom when the settlement was made, but have not been resident there at any time between 16th March 1987 and the death of the transferor.
(4) Where more than one person is a settlor in relation to a settlement and the circumstances so require, subsection (1)(d) above shall have effect in relation to it as if the settled property were comprised in separate settlements.
(4A) Where—
(a) a charge to tax arises under or by virtue of section 74A, or
(b) in a case where paragraphs (a) to (d) of section 74A are satisfied, a charge to tax arises under section 64 or 65 in respect of the relevant settled property (within the meaning of section 74A),
subsection (1) of this section has effect as if the persons listed in that subsection included the individual mentioned in section 74A(1)(b)(i).
(5) For the purposes of this section trustees of a settlement shall be regarded as not resident in the United Kingdom unless the general administration of the settlement is ordinarily carried on in the United Kingdom and the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are for the time being resident in the United Kingdom.
(6) References in this section to any property include references to any property directly or indirectly representing it.
(1) The persons liable for tax chargeable by virtue of section 94(1) or section 99(2) above are—
(a) the company making the transfer of value concerned, and
(b) so far as the tax remains unpaid after it ought to have been paid, the persons to whom any amounts have been apportioned under section 94 above and any individual (whether such a person or not) the value of whose estate is increased by the company’s transfer.
(2) A person to whom not more than 5 per cent of the value transferred by the company’s transfer is apportioned shall not as such be liable for any of the tax; and each of the other persons to whom any part of that value has been apportioned shall be so liable only for such part of the tax as corresponds to that part of that value.
(3) A person the value of whose estate is increased by the company’s transfer shall not as such be liable for a greater amount than the amount of the increase.
(4) No person other than those liable under this section shall be liable for any tax chargeable by virtue of section 94(1) or section 99(2) above.
(1) Where—
(a) a transferor is liable for any tax on the value transferred by a chargeable transfer, and
(b) by another transfer of value made by him on or after 27th March 1974 (“the spouse or civil partner transfer”) any property became the property of a person (“the transferee”) who at the time of both transfers was his spouse or civil partner ,
the transferee is liable for so much of the tax as does not exceed the market value of the property at the time of the spouse or civil partner transfer or, in a case where subsection (2) below applies the lower market value mentioned in paragraph (c) of that subsection.
(2) This subsection applies where—
(a) the chargeable transfer is made after the spouse or civil partner transfer; and
(b) the property (“the transferred property”) which became the property of the transferee either remains the transferee’s property at the date of the chargeable transfer or has before that date been sold by the transferee by a qualifying sale; and
(c) the market value of the transferred property on the relevant date (that is to say, the date of the chargeable transfer or, as the case may be, of the qualifying sale) is lower than its market value at the time of the spouse or civil partner transfer; and
(d) the transferred property is not tangible movable property.
(3) In this section “qualifying sale” has the same meaning as in section 131 above; and, subject to subsection (4) below, sections 133 to 140 above shall have effect for the purposes of this section as they have effect for the purposes of section 131.
(4) In their application by virtue of subsection (3) above, sections 133 to 140 above shall have effect as if—
(a) references to the chargeable transfer were references to the spouse or civil partner transfer,
(b) references to the transferee’s spouse or civil partner were omitted, and
(c) references to section 131 above were references to this section.
(1) A person shall not be liable under section 200(1)(a) above for any tax as a personal representative of a deceased person, except to the extent of the following assets, namely—
(a) so far as the tax is attributable to the value of any property other than such as is mentioned in paragraph (b) below, the assets (other than property so mentioned) which he has received as personal representative or might have so received but for his own neglect or default; and
(b) so far as the tax is attributable to property which, immediately before the death, was comprised in a settlement and consists of land in the United Kingdom, so much of that property as is at any time available in his hands for the payment of the tax, or might have been so available but for his own neglect or default.
(2) A person shall not be liable for tax as trustee in relation to any property, except to the extent of—
(a) so much of the property as he has actually received or disposed of or as he has become liable to account for to the persons beneficially entitled thereto, and
(b) so much of any other property as is for the time being available in his hands as trustee for the payment of the tax or might have been so available but for his own neglect or default.
(3) A person not liable as mentioned in subsection (1) or (2) above but liable for tax as a person in whom property is vested or liable for tax as a person entitled to a beneficial interest in possession in any property shall not be liable for the tax except to the extent of that property.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) A person liable for tax as a person for whose benefit any settled property, or income from any settled property, is applied, shall not be liable for the tax except to the extent of the amount of the property or income (reduced in the case of income by the amount of any income tax borne by him in respect of it, and in the case of other property in respect of which he has borne income tax by virtue of Chapter 2 of Part 13 of the Income Tax Act 2007 by the amount of that tax).
(6) Where a person is liable for any tax—
(a) under section 199 above otherwise than as transferor or personal representatives of the transferor, or
(b) under section 201 above otherwise than as trustee of the settlement,
he shall be liable only if the tax remains unpaid after it ought to have been paid and, in a case where any part of the value transferred is attributable to the tax on it, shall be liable to no greater extent than he would have been had the value transferred been reduced by the tax remaining unpaid.
(7) Where the tax exceeds what it would have been had the transferor died more than seven years after the transfer, subsection (6) above shall not apply in relation to the excess.
(8) A person liable by virtue of section 199(2) above for any tax as personal representative of the transferor shall be liable only to the extent that either—
(a) in consequence of subsections (2), (3) and (5) above, no person falling within paragraphs (b) to (d) of section 199(1) above is liable for the tax, or
(b) the tax remains unpaid twelve months after the end of the month in which the death of the transferor occurs,
and, subject to that, shall be liable only to the extent of the assets mentioned in subsection (1) above.
(9) Where by virtue of subsection (3) of section 102 of the Finance Act 1986 the estate of a deceased person is treated as including property which would not apart from that subsection form part of his estate, a person shall be liable under section 200(1)(a) above as personal representative for tax attributable to the value of that property only if the tax remains unpaid twelve months after the end of the month in which the death occurs and, subject to that, only to the extent of the assets mentioned in subsection (1) above.
(1) Where tax is chargeable under section 32 above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (2) or subsection (3)(a) of that section, the person liable for the tax is the person who, if the property were sold—
(a) in a case within subsection (2) of that section, at the time the tax becomes chargeable, and
(b) in a case within subsection (3)(a), immediately after the death,
would be entitled to receive (whether for his benefit or not) the proceeds of sale or any income arising from them.
(2) Where tax is chargeable under section 32 above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (3)(b) of that section, the person liable for the tax is the person by whom or for whose benefit the property is disposed of.
(2A) Where tax is chargeable under section 32A above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (3) or subsection (4)(a) of that section, the person liable for the tax is the person who, if the property were sold—
(a) in a case within subsection (3) of that section, at the time the tax becomes chargeable, and
(b) in a case within subsection (4)(a), immediately after the death,
would be entitled to receive (whether for his benefit or not) the proceeds of sale or any income arising from them.
(2B) Where tax is chargeable under section 32A above on the occurrence of an event which is a chargeable event with respect to any property by virtue of subsection (4)(b) of that section, the person liable for the tax is the person by whom or for whose benefit the property is disposed of.
(3) The persons liable for tax charged under section 79(3A) above are—
(a) the trustees of the settlement concerned, and
(b) any person for whose benefit any of the property or income from it is applied at or after the time of the event occasioning the charge.
(4) The person liable for tax chargeable under paragraph 1(1) or 3(1) of Schedule 5 to this Act is the person who, if the property were sold at the time the tax becomes chargeable, would be entitled to receive (whether for his benefit or not) the proceeds of sale or any income arising from them.
(5) The person liable for tax chargeable under paragraph 1(2) or 3(2) of Schedule 5 to this Act is the person by whom or for whose benefit the property is disposed of.
The person liable for tax chargeable under section 126 above in relation to a disposal is the person who is entitled to the proceeds of sale or would be so entitled if the dispoal were a sale.
(1) A person shall not be liable under section 200(1)(a) above for tax attributable to the value of any heritable property in Scotland which is vested in him as executor in the circumstances and for the purposes mentioned in subsection (1) or (2) of section 18 of the Succession (Scotland) Act 1964.
(2) The persons liable for tax chargeable under section 147(4) above are the person who claims legitim or rights under section 131 of the Civil Partnership Act 2004 and any person mentioned in section 200(1)(c) above.
(3) Section 200(1)(a) shall not apply in relation to tax chargeable under section 147(4) above, but section 204(1) shall apply in relation to the person who claims legitim or rights under section 131 of the Civil Partnership Act 2004 as it applies in relation to the personal representatives of a deceased person.
(1) This section applies to any tax that is attributable to the value of notional pension property of a deceased member of a registered pension scheme, a qualifying non-UK pension scheme or a section 615(3) scheme.
(2) For the purposes of this Part the tax is treated as also attributable to the value of—
(a) any property held for the purposes of the scheme that is available for paying a benefit on the deceased’s death, except so far as the property may only be used to provide an excluded benefit, or an exempt benefit, on the deceased’s death, and
(b) any property that is received by a person under the scheme as a benefit on the deceased’s death, other than an excluded benefit or an exempt benefit.
(3) The persons liable for the tax (as well as including a person within section 200(1)(c) (person in whom property is vested etc))—
(a) include the deceased’s personal representatives so far as they are not already liable under section 200(1)(a),
(b) where the scheme is a registered pension scheme, include the scheme administrator where—
(i) a benefit has been paid in breach of section 226A (withholding of benefits), or
(ii) the scheme administrator has failed to comply with section 226B (direct payment of tax on receipt of notice), and
(c) where the scheme is a registered pension scheme or a section 615(3) scheme, do not (despite section 200(1)(b) and (c)) include the trustees of the scheme (if there are any) or any other person who holds property for the purposes of the scheme in question.
(4) Where the scheme administrator is liable for tax by virtue of subsection (3)(b)(ii) (and not by virtue of subsection (3)(b)(i)), their liability is limited to the amount of tax that they have failed to pay as required under section 226B.
(5) Sections 271 to 272C of the Finance Act 2004 (liability of scheme administrator) apply in relation to a liability under this Act as they apply in relation to a liability under Part 4 of that Act.
(6) Subsection (3)(c) does not prevent a person from being liable to tax—
(a) under subsection (3)(b) in their capacity as scheme administrator, or
(b) by virtue of subsection (5).
(7) In this Act “exempt benefit”, in relation to a pension scheme and a deceased member of the scheme, means a benefit paid under the scheme if and so far as the payment renders the transfer of value made on the deceased’s death an exempt transfer.
(8) For provision under which a payment of a benefit renders the transfer of value on death an exempt transfer to the extent of the payment, see—
section 18 (transfers between spouses or civil partners);
section 23 (gifts to charities or registered clubs);
section 24 (gifts to political parties);
section 24A (gifts to housing associations);
section 25 (gifts for national purposes etc);
section 27 (maintenance funds for historic buildings etc).
(1) Where personal representatives are liable for tax on the value transferred by chargeable transfer made on death, the tax shall be treated as part of the general testamentary and administration expenses of the estate, but only so far as it is attributable to the value of property in the United Kingdom which—
(a) vests in the deceased’s personal representatives, and
(b) was not immediately before the death comprised in a settlement.
(2) Subsection (1) above shall have effect subject to any contrary intention shown by the deceased in his will.
(3) If—
(a) personal representatives pay an amount of tax,
(b) the amount does not fall to be borne as part of the general testamentary and administration expenses of the estate,
(c) property to whose value the tax is attributable is vested in someone other than the personal representatives (“the vestee”), and
(d) the personal representatives cannot recover the amount by deducting it from any sums payable to the vestee out of the estate (whether because there are no sums so payable or because such sums are insufficient or have already been paid without deduction),
the vestee must repay the amount to the personal representatives.
(4) References in this section to tax include references to interest on tax.
(1) Where a person is liable, otherwise than as transferor, and otherwise than under section 203 above, for tax attributable to the value of any property he shall, for the purpose of paying the tax or raising the amount of it when paid, have power, whether or not the property is vested in him, to raise the amount of the tax by sale or mortgage of, or a terminable charge on, that property , any property derived from that property, or any part of that property or of property derived from it.
(2) A person having a limited interest in any property who pays the tax attributable to the value of that property shall be entitled to the like charge as if the tax so attributable had been raised by means of a mortgage to him.
(3) Any money held on the trusts of a settlement may be expended in paying the tax attributable to the value of any property comprised in the settlement and held on the same trusts.
(4) References in this section to tax include references to interest on tax and to costs properly incurred in respect of tax.
Where a person has paid to the Board any tax which is or might at his option have been payable by instalments and he is entitled to recover the whole or part of it from another person, that other person shall, unless otherwise agreed between them, be entitled to refund the tax or that part by the same instalments (with the same interest thereon) as those by which it might have been paid to the Board.
(1) On an application being made in such form as the Board may prescribe by a person who has paid or borne the tax attributable to the value of any property, being tax for which he is not ultimately liable, the Board shall grant a certificate specifying the tax paid and the debts and incumbrances allowed in valuing the property.
(2) Except to the extent of any repayment which may be or become due from the Board, a certificate under subsection (1) above shall be conclusive as between any person by whom the tax specified in the certificate falls to be borne and the person seeking to recover the tax from him; and any repayment of the tax falling to be made by the Board shall be duly made if made to the person producing the certificate.
(3) References in this section to tax include references to interest on tax.
(1) Except as otherwise provided by this section or by regulations under section 256 below, the personal representatives of a deceased person and every person who—
(a) is liable as transferor for tax on the value transferred by a chargeable transfer, or would be so liable if tax were chargeable on that value, or
(b) is liable as trustee of a settlement for tax on the value transferred by a transfer of value, or would be so liable if tax were chargeable on that value, or
(bb) is liable under section 199(1)(b) above for tax on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer, or would be so liable if tax were chargeable on that value, or
(bc) is liable under section 200(1)(c) above for tax on the value transferred by a chargeable transfer made on death, so far as the tax is attributable to the value of property which, apart from section 102(3) of the Finance Act 1986, would not form part of the deceased’s estate, or would be so liable if tax were chargeable on the value transferred on the death, or
(bca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(bd) is liable under section 201(1)(b), (c) or (d) above for tax on the value transferred by a potentially exempt transfer which is made under section 52 above and which proves to be a chargeable transfer, or would be so liable if tax were chargeable on that value, or
(c) is liable as trustee of a settlement for tax on an occasion on which tax is chargeable under Chapter III of Part III of this Act (apart from section 79), or would be so liable if tax were chargeable on the occasion,
shall deliver to the Board an account specifying to the best of his knowledge and belief all appropriate property and the value of that property.
(2) Where in the case of the estate of a deceased person no grant of representation or confirmation has been obtained in the United Kingdom before the expiration of the period of twelve months from the end of the month in which the death occurred—
(a) every person in whom any of the property forming part of the estate vests (whether beneficially or otherwise) on or at any time after the deceased’s death or who at any such time is beneficially entitled to an interest in possession in any such property, and
(b) where any of the property is at any such time comprised in a settlement and there is no person beneficially entitled to an interest in possession in that property, every person for whose benefit any of that property (or income from it) is applied at any such time,
shall deliver to the Board an account specifying to the best of his knowledge and belief the appropriate property vested in him, in which he has an interest or which (or income from which) is applicable for his benefit and the value of that property.
(3) Subject to subsections (3A) and (3B) below, where an account is to be delivered by personal representatives (but not where it is to be delivered by a person who is an executor of the deceased only in respect of settled land in England and Wales), the appropriate property is—
(a) all property which formed part of the deceased’s estate immediately before his death . . . , other than property which would not, apart from section 102(3) of the Finance Act 1986, form part of his estate; and
(b) all property to which was attributable the value transferred by any chargeable transfers made by the deceased within seven years of his death.
(3A) If the personal representatives, after making the fullest enquiries that are reasonably practicable in the circumstances, are unable to ascertain the exact value of any particular property, their account shall in the first instance be sufficient as regards that property if it contains—
(a) a statement to that effect;
(b) a provisional estimate of the value of the property; and
(c) an undertaking to deliver a further account of it as soon as its value is ascertained.
(3B) The Board may from time to time give such general or special directions as they think fit for restricting the property to be specified in pursuance of subsection (3) above by any class of personal representatives.
(4) Where subsection (3) above does not apply the appropriate property is any property to the value of which the tax is or would be attributable . . . .
(5) Except in the case of an account to be delivered by personal representatives, a person shall not be required to deliver an account under this section with respect to any property if a full and proper account of the property, specifying its value, has already been delivered to the Board by some other person who—
(a) is or would be liable for the tax attributable to the value of the property, and
(b) is not or would not be liable with him jointly as trustee;
and a person within subsection (2) above shall not be required to deliver an account under that subsection if he or another person within that subsection has satisfied the Board that an account will in due course be delivered by the personal representatives.
(6) An account under the preceding provisions of this section shall be delivered—
(a) in the case of an account to be delivered by personal representatives, before the expiration of the period of twelve months from the end of the month in which the death occurs, or, if it expires later, the period of three months beginning with the date on which the personal representatives first act as such;
(aa) in the case of an account to be delivered by a person within subsection (1)(bb) or (bd) above, before the expiration of the period of twelve months from the end of the month in which the death of the transferor occurs;
(ab) in the case of an account to be delivered by a person within subsection (1)(bc) above, before the expiration of the period of twelve months from the end of the month in which the death occurs;
(ac) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ad) in the case of an account to be delivered by a person within subsection (1)(c) above, before the expiration of the period of six months from the end of the month in which the occasion concerned occurs;
(b) in the case of an account to be delivered by a person within subsection (2) above, before the expiration of the period of three months from the time when he first has reason to believe that he is required to deliver an account under that subsection;
(c) in the case of an account to be delivered by any other person, before the expiration of the period of twelve months from the end of the month in which the transfer is made or, if it expires later, the period of three months beginning with the date on which he first becomes liable for tax.
(7) A person liable for tax under section 32 or 32A, 79 or 126 above or under Schedule 5 to this Act shall deliver an account under this section before the expiration of the period of six months from the end of the month in which the event by reason of which the tax is chargeable occurs.
If a person who has delivered an account under section 216 above discovers at any time that the account is defective in a material respect by reason of anything contained in or omitted from it he shall, within six months of that time, deliver to the Board a further account containing such information as may be necessary to remedy the defect.