3(1)Where securities have been issued by the Treasury subject to a condition authorised by section 22 of the [1931 c. 49.] Finance (No. 2) Act 1931 (or section 47 of the [1915 c. 89.] Finance (No. 2) Act 1915) for exemption from taxation so long as the securities are in the beneficial ownership of persons neither domiciled nor ordinarily resident in the United Kingdom the securities are excluded property—
(a)if they are not settled property and are in the beneficial ownership of such a person ; or
(b)if they are settled property and such a person is beneficially entitled to an interest in possession in them.
(2)If the securities are settled property and no interest in possession subsists in them the condition of sub-paragraph (1)(b) above shall be treated as satisfied if it is shown that all known persons for whose benefit the settled property or income from it has been or might be applied or who might become beneficially entitled to an interest in possession in it are persons neither domiciled nor ordinarily resident in the United Kingdom.
(3)Section 45 of this Act does not apply for the purposes of this paragraph.