PART IV

Capital Transfer Tax
CHAPTER II

Settlements Without Interests in Possession

Special cases

Property becoming held for charitable purposes or by exempt bodies
119
1
Subject to the following provisions of this section, tax shall not be charged under this Chapter in respect of property which ceases to be relevant property, or ceases to be property to which section 113, 114, 116 or 118 above or paragraph 2 of Schedule 16 to this Act applies, on becoming—
a
property held for charitable purposes only without limit of time (defined by a date or otherwise);
b
the property of a political party qualifying for exemption under paragraph 11 of Schedule 6 to the Finance Act 1975;
c
the property of a body mentioned in paragraph 12 of that Schedule (national purposes etc.); or
d
the property of a body not established or conducted for profit.
2
Subsection (1)(d) above shall not apply unless the Treasury so direct, whether before or after the time when the property becomes the property of the body in question, and the property is within sub-paragraph (2) of paragraph 13 of Schedule 6 to the Finance Act 1975; and sub-paragraphs (3) to (8) of that paragraph shall apply for the purposes of this subsection as they apply for the purposes of that paragraph.
3
If the amount on which tax would be charged apart from this section in respect of any property exceeds the value of the property immediately after it becomes property of a description specified in paragraphs (a) to (d) of subsection (1) above (less the amount of any consideration for its transfer received by the trustees), that subsection shall not apply but the amount on which tax is charged shall be equal to the excess.
4
The reference in subsection (3) above to the amount on which tax would be charged is a reference to the amount on which it would be charged—
a
assuming (if it is not in fact so) that the tax is not paid out of settled property, and
b
apart from Schedule 10 to the Finance Act 1976 (business property) and Schedule 14 to the Finance Act 1981 (agricultural property);
and the reference in that subsection to the amount on which tax is charged is a reference to the amount on which it would be charged on that assumption and apart from those Schedules.
5
Subsection (1) above shall not apply in relation to any property if the disposition by which it becomes property of the relevant description is defeasible; but for this purpose a disposition which has not been defeated at a time twelve months after the property concerned becomes property of the relevant description and is not defeasible after that time shall be treated as not being defeasible, whether or not it was capable of being defeated before that time.
6
Subsection (1) above shall not apply in relation to any property if it or any part of it may become applicable for purposes other than charitable purposes or purposes of a body mentioned in subsection (1)(b), (c) or (d) above.
7
Subsection (1) above shall not apply in relation to any property if, at or before the time when it becomes property of the relevant description, an interest under the settlement is or has been acquired for a consideration in money or money's worth by an exempt body otherwise than from a charity or a body mentioned in subsection (1)(b) or (c) above.
8
In subsection (7) above " exempt body " means a charity or a body mentioned in subsection (1)(b), (c) or (d) above ; and for the purposes of subsection (7) above a body shall be treated as acquiring an interest for a consideration in money or money's worth if it becomes entitled to the interest as a result of transactions which include a disposition for such consideration (whether to that body or to another person) of that interest or of other property.
1976 c. 40.
1981 c. 35.