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Finance Act 1960

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This is the original version (as it was originally enacted).

64Estate duty: graduation of charge on gifts, etc.

(1)Where, in the case of a person dying after the fourth day of April, nineteen hundred and sixty, any property is deemed to pass on the death by virtue of a gift or any other relevant disposition or event (estate duty being chargeable on the property apart from this section), and the death takes place in the third, fourth or last year of the five-year period, then subject to the provisions of this section the principal value of the property shall be reduced for estate duty purposes—

(a)by fifteen per cent. thereof, if the death takes place in the third year,

(b)by thirty per cent. thereof, if the death takes place in the fourth year,

(c)by sixty per cent. thereof, if the death takes place in the fifth year. In this section " the five-year period " means the period of five years beginning with the relevant disposition or event.

(2)In this section " relevant disposition or event" means—

(a)any such disposition as is mentioned in paragraph (a) of subsection (2) of section thirty-eight of the Customs and Inland Revenue Act, 1881 (gifts inter vivos), including—

(i)any such payment or application of money or money's worth as is mentioned in subsection (2) of section thirty-one of the Finance Act, 1939 (discharge of debts etc. disallowable for estate duty valuation),

(ii)any such disposition in favour of a relative or company as under section forty-four of the Finance Act, 1940, is to be treated as a gift made by the deceased,

(iii)any such creation or extinguishment of a debt or other right as under section forty-five of the Finance Act, 1940, is to be deemed to have been a disposition of property, and

(iv)any such payment of a premium as under subsection (2) of section thirty-four of the Finance Act, 1959, is to be treated as a gift;

(b)any such disposition or determination of an interest as is mentioned in subsection (1) of section forty-three of the Finance Act, 1940 (disposition or determination of life interests);

(c)any such disposition of the personal interest of a tenant in tail as is mentioned in section forty-five of the Finance Act, 1950 (Parliamentary settled estates);

(d)any such purchase of an interest in settled property as is mentioned in paragraph (b) of subsection (1) of section twenty-eight of the Finance Act, 1958 (purchases of interests in expectancy).

(3)Where, irrespective of the interval between the relevant disposition or event and the death, duty would be chargeable (apart from this section) by reason of a person's not being entirely excluded from possession and enjoyment of property and of any benefit to him by contract or otherwise, then:—

(a)if he was not so excluded immediately before the death, subsection (1) of this section shall not apply ;

(b)if he was so excluded at any previous time and continued to be so excluded until the death (but duty would be chargeable as aforesaid by reason of that time not falling early enough before the death), subsection (1) of this section shall apply with the substitution for the reference to the five-year period of a reference to the period of five years beginning with that time.

(4)Where —

(a)under subsection (2) of section three of the Finance Act, 1894, a deduction from the value of the property falls to be made in respect of partial consideration, or

(b)under the provisions of subsection (1) of section forty-four of the Finance Act, 1940 (dispositions in favour of relatives) and of subsection (2) of section forty of the Finance Act, 1944 (relaxation of those provisions) one or more deductions fall to be made in the course of determining the amount on which estate duty is payable in accordance with those provisions, or

(c)by virtue of subsection (8) of section twenty-eight of the Finance Act, 1958, any debt incurred or encumbrance created for the purpose of or in consideration of the purchase of an interest in expectancy is allowable as a deduction for estate duty purposes,

subsection (1) of this section shall have effect subject to the modification that the reduction provided for by that subsection shall be applied after allowing for any such deduction.

(5)Notwithstanding the foregoing provisions of this section, in subsection (2) of section fifty-nine of the Finance (1909-10) Act, 1910 (exemption for small gifts inter vivos), section thirty-three of the Finance Act, 1949 (extension of exemption for certain small gifts inter vivos) and subsection (11) of section thirty-eight of the Finance Act, 1957 (marginal relief in respect of the exemption provided for by the said section thirty-three), references to the aggregate value or amount of any gifts shall be construed as references to the aggregate value or amount thereof apart from any reduction under this section.

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