SCHEDULES

SCHEDULE 14E+W+S+N.I.Gifts to the nation

PART 5E+W+S+N.I.Related changes

IHTA 1984E+W+S+N.I.

26IHTA 1984 is amended as follows.

27In section 25 (gifts for national purposes etc), after subsection (2) insert—

(3)A transfer of value is an exempt transfer to the extent that the value transferred by it is attributable to property that is being transferred in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to the nation).

28In section 26A (potentially exempt transfer of property subsequently held for national purposes etc), in paragraph (b), after “below” insert “ or in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to the nation) ”.

29(1)Section 32 (conditionally exempt transfers: chargeable events) is amended as follows.E+W+S+N.I.

(2)In subsection (3), for “subsections (4) and (5)” substitute “ subsections (4), (4A) and (5) ”.

(3)After subsection (4) insert—

(4A)A death or disposal is not a chargeable event with respect to any property if—

(a)in the case of a death, a person who became beneficially entitled to the property on the death disposes of it in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to the nation) within 3 years of the death, or

(b)in the case of a disposal, the disposal is made in the circumstances described in paragraph 1 of that Schedule,

and a death or disposal of the property after such a disposal as is mentioned in paragraph (a) or (b) is not a chargeable event with respect to the property unless there has again been a conditionally exempt transfer of it after that disposal.

30(1)Section 32A (associated properties) is amended as follows.E+W+S+N.I.

(2)After subsection (5) insert—

(5A)The death of a person beneficially entitled to property, or the disposal of property, is not a chargeable event if—

(a)in the case of a death, a person who became beneficially entitled to the property on the death disposes of it in the circumstances described in paragraph 1 of Schedule 14 to the Finance Act 2012 (gifts to the nation) within 3 years of the death, or

(b)in the case of a disposal, the disposal is made in the circumstances described in paragraph 1 of that Schedule.

(3)In subsection (7), after “(5)(a) or (b)” insert “ or (5A)(a) or (b) ”.

31In section 33 (amount of charge under section 32), in subsection (6)—

(a)for “section 32(4)” substitute “ section 32(4) or (4A) ”, and

(b)for “section 32A(5)”, in both places it appears, substitute “ section 32A(5) or (5A) ”.

32In section 34 (reinstatement of transferor's cumulative total), in subsection (4)—

(a)for “section 32(4)” substitute “ section 32(4) or (4A) ”, and

(b)for “section 32A(5)”, in both places it appears, substitute “ section 32A(5) or (5A) ”.

[F132A(1)This paragraph applies where a person (“the donor”) makes a qualifying gift of an object in circumstances where, had the donor instead sold the object to an individual at market value, a charge to estate duty would have arisen under section 40 of FA 1930 on the proceeds of sale.E+W+S+N.I.

(2)At the time when the gift is made, estate duty becomes chargeable under that section as if the gift were such a sale (subject to any limitation imposed by paragraph 33(2)).

(3)In the application of this paragraph to Northern Ireland, the references to section 40 of FA 1930 are to be read as references to section 2 of the Finance Act (Northern Ireland) 1931.]

Estate duty etcE+W+S+N.I.

33(1)This paragraph applies if a person makes a qualifying gift and as a result—E+W+S+N.I.

(a)estate duty becomes chargeable under section 40 of FA 1930 (exemption from death duties of objects of national etc interest), or

(b)tax becomes chargeable under Schedule 5 to IHTA 1984 (conditional exemption: deaths before 7 April 1976).

(2)Despite any other enactment, the amount of duty or tax that becomes so chargeable as a result of the gift is to be limited to the amount (if any) by which A exceeds B.

(3)For these purposes—

  • “A” is the amount of duty or tax that becomes so chargeable as a result of the gift (absent this paragraph), and

  • “B” is what that amount would be if the effective rate at which the duty or tax is charged were the highest rate specified in column 3 of the Table in Schedule 1 to IHTA 1984.

(4)References in this paragraph to the amount of duty or tax that becomes so chargeable are to the amount before applying any credit allowable against it under section 33(7) of IHTA 1984.

(5)Nothing in this paragraph entitles a person to any repayment of inheritance tax if the amount of any such credit exceeds the amount (if any) chargeable in accordance with sub-paragraph (2).

(6)In the application of this paragraph to Northern Ireland, for the reference to section 40 of FA 1930 substitute a reference to section 2 of the Finance Act (Northern Ireland) 1931.