SCHEDULE 20 GIFTS WITH RESERVATION
F1Termination of interests in possession
4A
1
This paragraph applies where—
a
under section 102ZA of this Act, an individual (“D”) is taken to dispose of property by way of gift, and
b
the property continues to be settled property immediately after the disposal.
2
Paragraphs 2 to 4 above shall not apply but, subject to the following provisions of this paragraph, the principal section and the following provisions of this Schedule shall apply as if the property comprised in the gift consisted of the property comprised in the settlement on the material date, except in so far as that property neither is, nor represents, nor is derived from, property originally comprised in the gift.
3
Any property which—
a
on the material date is comprised in the settlement, and
b
is derived, directly or indirectly, from a loan made by D to the trustees of the settlement,
shall be treated for the purposes of sub-paragraph (2) above as derived from property originally comprised in the gift.
4
If the settlement comes to an end at some time before the material date as respects all or any of the property which, if D had died immediately before that time, would be treated as comprised in the gift,—
a
the property in question, other than property to which D then becomes absolutely and beneficially entitled in possession, and
b
any consideration (not consisting of rights under the settlement) given by D for any of the property to which D so becomes entitled,
shall be treated as comprised in the gift (in addition to any other property so comprised).
5
Where, under any trust or power relating to settled property, income arising from that property after the material date is accumulated, the accumulations shall not be treated for the purposes of sub-paragraph (2) above as derived from that property.
Sch. 20 para. 4A and cross-heading inserted (retrospective to 22.3.2006) by Finance Act 2006 (c. 25), Sch. 20 para. 33(3)(4) (with Sch. 20 para. 33(4))