PART IV

Capital Transfer Tax
CHAPTER II

Settlements Without Interests in Possession

Rates of principal charge

Added property etc.
110
1
This subsection applies where, after the settlement commenced and after 8th March 1982, but before the anniversary concerned, the settlor made a chargeable transfer as a result of which the value of the property comprised in the settlement was increased.
2
For the purposes of subsection (1) above, it is immaterial whether the amount of the property so comprised was increased as a result of the transfer, but a transfer as a result of which the value increased but the amount did not shall be disregarded if it is shown that the transfer—
a
was not primarily intended to increase the value, and
b
did not result in the value being greater immediately after the transfer by an amount exceeding five per cent, of the value immediately before the transfer.
3
Where subsection (1) above applies, section 109(5)(a) above shall have effect as if it referred to the greater of—
a
the aggregate of the values there specified, and
b
the aggregate of the values transferred by any chargeable transfers made by the settlor in the period of ten years ending with the day on which the chargeable transfer falling within subsection (1) above was made, disregarding transfers made on that day and excluding the values mentioned in subsection (4) below ;
and where the settlor made two or more chargeable transfers falling within subsection (1) above, paragraph (b) above shall be taken to refer to the transfer in relation to which the aggregate there mentioned is the greatest.
4
The values are—
a
any value attributable to property whose value is taken into account in determining the amount mentioned in section 109(4) above ; and
b
any value attributable to property in respect of which a charge to tax has been made under section 108 above and by reference to which an amount mentioned in section 109(5)(b) above is determined.
5
Where the property comprised in a settlement immediately before the ten-year anniversary concerned, or any part of that property, had on any occasion within the preceding ten years ceased to be relevant property then, if on that occasion tax was charged in respect of the settlement under section 108 above, the aggregate calculated under section 109(5) above shall be reduced by an amount equal to the lesser of—
a
the amount on which tax was charged under section 108 (or so much of that amount as is attributable to the part in question), and
b
the value on which tax is charged under section 107 above (or so much of that value as is attributable to the part in question);
and if there were two or more such occasions relating to the property or the same part of it, this subsection shall have effect in relation to each of them.
6
References in subsection (5) above to the property comprised in a settlement immediately before an anniversary shall, if part only of the settled property was then relevant property, be construed as references to that part.
7
In relation to the first ten-year anniversary of a settlement which commenced after 26th March 1974 and before 9th March 1982, section 109(5) above shall have effect with the addition after paragraph (b) of the words
and
c
the amounts of any distribution payments (determined in accordance with the rules applicable before 9th March 1982 under paragraph 11 of Schedule 5 to the Finance Act 1975) made out of the settled property after 26th March 1974 but before 9th March 1982 and within the period of ten years before the anniversary concerned
.
1975 c. 7.