http://www.legislation.gov.uk/ukpga/2015/33/part/2/crossheading/settlementsFinance (No. 2) Act 2015An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.texttext/xmlenStatute Law Database2020-10-05Expert Participation2020-07-22 PART 2 11Schedule 1 contains provision about calculating the rate at which inheritance tax is charged under Chapter 3 of Part 3 of IHTA 1984.121Section 79 of IHTA 1984 (exemption from ten-yearly charge) is amended as follows.2In subsection (3)—afor “then, if” substitute “ subsection (3A) below applies if ”,bin paragraph (a), for “has, on a claim made for the purpose, been” substitute “ is, on a claim made for the purpose, ”,cafter that paragraph insert—aathat claim is made during the period beginning with the date of a ten-year anniversary of the settlement (“the relevant ten-year anniversary”) and ending—itwo years after that date, oriion such later date as the Board may allow,,din paragraph (b)—ifor “that section has been given” substitute “ section 31 is given ”, andiifor “have been given” substitute “ are given ”, andeomit the words from “section 64” to the end.3After that subsection insert—3ATax is not chargeable under section 64 above in relation to the property by reference to the relevant ten-year anniversary concerned or any subsequent ten-year anniversaries; but on the first occurrence of an event which, if there had been a conditionally exempt transfer of the property immediately before that relevant ten-year anniversary, would be a chargeable event with respect to the property—athere is a charge to tax under this subsection, andbon any ten-year anniversary falling after that event, tax is chargeable under section 64 above in relation to the property.4In subsection (4), for the words from “subsection (3)” to “mentioned” substitute “ subsection (3A) above in respect of property if, after the occasion mentioned in subsection (3) above and before the occurrence mentioned in subsection (3A) ”.5In subsections (5), (5A), (6), (8)(a) and (9A)(a) for “subsection (3)” substitute “ subsection (3A) ”.6In subsection (7A), in paragraph (c), for the words from “day” to “section” substitute “ relevant ten-year anniversary ”.7In subsection (8)—ain paragraph (a), for the words from “on the first” to the end substitute “ by reference to the relevant ten-year anniversary of the settlement ”, andbin paragraph (c), omit “, and the claim was made and the undertaking was given,”.8Accordingly, in that Act—ain section 207 (liability: conditional exemption), in subsection (3), for “section 79(3)” substitute “ section 79(3A) ”,bin section 233 (interest on unpaid tax), in subsection (1)(c), for “79(3)” substitute “ 79(3A) ”,cin section 237 (imposition of charge), in subsection (3B)(a), for “or 79(3)” substitute “ or 79(3A) ”, anddin Schedule 4 (maintenance funds for historic buildings), in paragraph 3(2)(c), for “or 79(3)” substitute “ or 79(3A) ”.9The amendments made by this section have effect in relation to occasions on which tax would (ignoring the effect of the amendments) fall to be charged under section 64 of IHTA 1984 on or after the day on which this Act is passed.131In section 80 of IHTA 1984 (initial interest of settlor or spouse or civil partner), for “an interest in possession”, in each place it appears, substitute “ a qualifying interest in possession ”.2The amendments made by this section come into force on the day after the day on which this Act is passed subject to the saving provision in subsections (3) to (7).3Subsections (4) to (7) apply where—athe occasion first referred to in subsection (1) of section 80 of IHTA 1984 occurred before 22 March 2006,bon that occasion the settlor, or the settlor's spouse or civil partner, became beneficially entitled to an interest in possession in property which, as a result of that subsection, was treated as not becoming comprised in a settlement for the purposes of Chapter 3 of Part 3 of IHTA 1984 on that occasion, andcat all times in the relevant period that property, or some particular part of it, has been property in which the settlor, or the settlor's spouse or civil partner, has been beneficially entitled to an interest in possession,and in subsections (4) to (7) “the protected property” means that property or, as the case may be, that particular part of it.4The amendments made by subsection (1) do not have effect in relation to any particular part of the protected property for so long as the subsisting interest in possession continues to subsist in that part (but see subsections (5) and (6) for what happens afterwards).5As from immediately before the time when the subsisting interest in possession comes to an end so far as subsisting in any particular part of the protected property (whether or not it also comes to an end at the same time so far as subsisting in some or all of the rest of the protected property), section 80(1) of IHTA 1984 has effect in relation to that part as if the second appearance of “an interest in possession” were “a qualifying interest in possession”.6If (ignoring this subsection), subsection (5) would have the consequence that a particular part of the protected property is treated as becoming comprised in a separate settlement at a time earlier than the time at which the subsisting interest in possession comes to an end so far as subsisting in that part, that part is to be treated as becoming comprised in a separate settlement at that later time.7In this section—a“the relevant period” means the period beginning with the occasion first mentioned in section 80(1) of IHTA 1984 and ending with the day on which this Act is passed,b“qualifying interest in possession” has the same meaning as in section 80(1) of IHTA 1984,c“subsisting interest in possession”, in relation to a part of the protected property, means the interest in possession which subsisted in that part immediately before the end of the relevant period, anddthe reference in subsection (3)(c) to the spouse or civil partner of a settlor includes a reference to the widow or widower or surviving civil partner of the settlor.141In section 144 of IHTA 1984 (distributions etc from property settled by will), in subsection (1)(b), after “section” insert “ 65(4), ”.2The amendment made by this section has effect in cases where the testator's death occurs on or after 10 December 2014.