Finance Act 1958

3 (1) The provisions of this paragraph shall have effect where the property chargeable with duty on the later death is or has been settled property.

(2) The property at any time comprised in a settlement shall be regarded as the same property, notwithstanding any substitution of one item for another; and any reference in paragraph (b) of subsection (1) of section thirty of this Act or in this Schedule to the person entitled to property shall, in the case of settled property be taken as referring to the persons in whom the property is vested oh the trusts of the settlement.

(3) Where there has been a purchase for a consideration in money or money's worth of an interest under the settlement, relief shall not he allowed on the death of a person who acquired his title to the property chargeable (or his interest therein) by or under that purchase, except by reference to the death of another such person, nor be allowed by reference to the death of such a person, except on the death of another such person.

(4) Where on the later death the settled property is chargeable with duty by virtue of section forty-three of the Finance Act, 1940, and the settlement has come to an end before the death as respects any part of that property, then in relation to that part of the property paragraph (b) of subsection (1) of section thirty of this Act and sub-paragraph (2) of this paragraph shall apply as if any reference to a time immediately before the death were a reference to a time immediately before the coming to an end of the settlement as respects that part of the property; and relief shall not be allowed by reference to a death occurring after the end of the settlement, other than the death of the settlor or of a person who received property distributed under the settlement when it came to an end and did not acquire his title thereto by or under a purchase for a consideration in money or money's worth made at any time (whether by him or another).

(5) Where relief is allowed in a case to which sub-paragraph (4) of of this paragraph applies by reference to the death of a person receiving property distributed under the settlement, and that property includes (or is treated as including) a sum of money, then—

(a) the property chargeable with duty on the later death shall be regarded as being the same as any property forming part of the said person's estate or otherwise chargeable with duty on his death to the extent to which it is shown to the satisfaction of the Commissioners that that property can be regarded as being the same property as that sum, on the assumption that the property at any time paid away or otherwise disposed of by the said person since the coming to an end of the settlement was (as far as might be) property other than that representing the said sum, or, in so far as the property forming part of his estate is not sufficient to represent the said sum, that the sum was applied by him rateably in making any gifts or settlements the property comprised in which is chargeable with estate duty on his death; and

(b) where the said person has before his death ceased to have possession and enjoyment of any property distributed to him under the settlement other than a sum of money, and has done so in any circumstances in which he can be regarded as receiving money or money's worth in substitution for it, paragraph (a) of this sub-paragraph shall apply as if the property distributed to him had included, instead of that property, a sum of money equal to the amount or value (at the time when he ceases to have possession and enjoyment of that property) of what he so receives in substitution for it:

(6) Where on the later death settled property is chargeable with duty by reason of the coming to an end of an interest limited to cease on the death (or a disposition or determination of such an interest), and relief is allowed either—

(a) by reference to an earlier death on which there passed an interest expectant on or subject to the interest so limited; or

(b) in a case to which sub-paragraph (4) of this paragraph applies,

by reference to the death of a person receiving property distributed under the settlement;

the net value of the relevant property after the earlier death shall be taken to be the value on which estate duty is payable on the earlier death, except that in the case of property referred to in paragraph (a) or (b) of sub-paragraph (5) of this paragraph it shall be taken to be the amount of the sum of money there referred to.