Section 36.
1(1)Subject to the following provisions of this Schedule, where any part of the value of a person's estate immediately before his death is attributable to the value of land in the United Kingdom on which trees or underwood are growing but which is not agricultural property within the meaning of Schedule 8 to this Act, and the conditions stated in paragraph 5 below are satisfied, then, if the person liable for the whole or part of the tax so elects—
(a)the value of the trees or underwood shall be left out of account in determining the value transferred on the death ; but
(b)tax shall be charged in the circumstances mentioned in paragraph 2 below in accordance with paragraph 3 below.
(2)An election under this paragraph must be made by notice in writing to the Board within two years of the death or such longer time as the Board may allow.
2(1)Subject to the following provisions of this paragraph, where, under paragraph 1 above, the value of any trees or underwood has been left out of account in determining the value transferred on the death of any person, and the whole or any part of the trees or underwood is disposed of, whether together with or apart from the land on which they were growing, then, if the disposal occurs before any part of the value transferred on the death of any other person is attributable to the value of that land, tax shall be charged in accordance with paragraph 3 below.
(2)The person liable for the tax chargeable under this paragraph shall be the person who is entitled to the proceeds of the sale or would be so entitled if the disposal were a sale.
(3)Sub-paragraph (1) above does not apply to a disposal made by any person to his spouse.
(4)Where tax has been charged under this paragraph on the disposal of any trees or underwood tax shall not again be charged in relation to the same death on a further disposal of the same trees or underwood.
3Where the value of any trees or underwood has been left out of account in determining the value transferred on the death of any person and tax is chargeable under paragraph 2 above on a disposal of the trees or underwood, it shall be charged on the following amount, namely.—
(a)if the disposal is a sale for full consideration in money or money's worth, on the net proceeds of the sale ; and
(b)in any other case, on the net value, at the time of the disposal, of the trees or underwood ;
and at the rate or rates at which it would have been chargeable on that death if that amount, and any amount on which tax was previously chargeable under that paragraph in relation to the death, had been included in the value transferred on death and the amount on which the tax is chargeable had formed the highest part of that value.
4Where a disposal on which tax is chargeable under paragraph 2 above is a chargeable transfer, the value transferred by it shall be calculated as if the value of the trees or underwood had been reduced by the tax chargeable under that paragraph.
5(1)The conditions referred to in paragraph 1 above are that the deceased either was beneficially entitled to the land throughout the five years immediately preceding his death or became beneficially entitled to it otherwise than for a consideration in money or money's worth and, subject to sub-paragraph (2) below, that—
(a)if the land is situated in Great Britain, the land is managed in accordance with a plan approved by the Forestry Commissioners under a forestry dedication covenant or forestry dedication agreement within the meaning of the [1967 c. 10.] Forestry Act 1967; and
(b)if the land is situated in Northern Ireland, either a grant with respect to the land has been made under section 2 of the [1953 c. 2 (N.I.).] Forestry Act (Northern Ireland) 1953 or the land is managed in accordance with a plan approved under section 3(1)(c) of that Act in connection with the Planting and Maintenance of Woodlands Scheme administered by the Department of Agriculture for Northern Ireland for the purposes of those sections.
(2)In the case of a person dying before 1st January 1976 paragraphs (a) and (b) of sub-paragraphs (1) above do not apply and, in the case of a person dying before 1st January 1981—
(a)the condition in sub-paragraph (1)(a) above shall be deemed to be satisfied if a forestry dedication covenant or a forestry dedication agreement in respect of the land has been offered to the Forestry Commissioners and the offer has not been refused ; and
(b)the condition in sub-paragraph (1)(b) above shall be taken to be satisfied if a grant has been applied for or a plan for the management of the land has been submitted to the Department of Agriculture for Northern Ireland for approval and the application or approval has not been refused.
6(1)In this Schedule—
(a)references to the value transferred on a death are references to the value transferred by the chargeable transfer made on that death ;
(b)references to the net proceeds of sale or the net value of any trees or underwood are references to the proceeds of sale or value after deduction of any expenses allowable under this Schedule so far as those expenses are not allowable for the purposes of income tax ; and
(c)references to the disposal of any trees or underwood include references to the disposal of any interest in the trees or underwood (and references to a disposal of the same trees or underwood shall, where the case so requires, be construed as referring to a disposal of the same interest).
(2)The expenses allowable under this Schedule are, in relation to any trees or underwood the value of which has been left out of account on any death.—
(a)the expenses incurred in disposing of the trees or underwood ; and
(b)the expenses incurred in replanting within three years of a disposal to replace the trees or underwood disposed of; and
(c)the expenses incurred in replanting to replace trees or under wood previously disposed of, so far as not allowable on the previous disposal.