Finance Act, 1941
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Disposition or determination of life interests etc. |
30.—(1) Subject to the subsequent provisions of this section, where an interest in property limited to cease on a death has, after it has become an interest in possession, been disposed of or has determined (whether by surrender, assurance, divesting, forfeiture or any other means except the expiration of a fixed period at the expiration whereof such interest was limited to cease) either wholly or partly and either for valuable consideration or otherwise, whichever of the following provisions is applicable shall apply and have effect, that is to say:— | |
(a) if in the absence of such disposition or determination the whole of the said property would, by virtue of section 1 of the Finance Act, 1894 , have passed on the said death on which it was limited to cease, then and in such case the whole of the said property shall be deemed by virtue of this section to be included in the property passing on the said death, or | ||
(b) if in the absence of such disposition or determination the said property would, by virtue of paragraph (b) of sub-section (1) of section 2 of the Finance Act, 1894 , have passed to a particular or limited extent on the said death on which it was limited to cease, then and in such case the said property shall be deemed by virtue of this section to be included to that particular or limited extent in the property passing on the said death. | ||
(2) The foregoing sub-section of this section shall not apply or have effect if the disposition or determination mentioned in that sub-section was bona fide effected or suffered for public or charitable purposes one year or more before the death or was bona fide effected or suffered for any other purpose three years or more before the death and either— | ||
(a) bona fide possession and enjoyment of the property in which the interest the subject of such disposition or determination subsisted was, immediately after such disposition or determination, assumed by the person who became entitled thereto by virtue of or upon such disposition or determination and was thenceforward retained by that person to the entire exclusion of the person previously entitled to the said interest and the exclusion of any benefit to him by contract or otherwise, or | ||
(b) the said disposition or determination was only partial and the provisions of the next preceding paragraph of this sub-section are not fully complied with by reason only of the retention by the said person previously entitled to the said interest of some part of the property or some benefit by virtue of the instrument creating or conferring on him the said interest. | ||
(3) Nothing contained in the next preceding sub-section of this section shall prejudice or affect any charge of estate duty arising otherwise than by virtue of sub-section (1) of this section. | ||
(4) In the application of sub-section (1) of this section to a case in which an incumbrance on the property in which the interest mentioned in that sub-section subsisted has been created by associated operations which included a disposition of the said interest, the following provisions shall have effect, that is to say:— | ||
(a) where such incumbrance was created for consideration in money or money's worth which was applied wholly or partly for purposes calculated to maintain or increase the value of the said property, references in the said sub-section (1) to the said property shall be construed as referring to that property with and subject to the said incumbrance to the extent to which the consideration therefor was so applied; | ||
(b) save as provided by the foregoing paragraph, references in the said sub-section (1) to the said property shall be construed as referring to that property free from the said incumbrance. | ||
(5) In sub-section (3) of section 59 of the Finance (1909-10) Act, 1910 , the words “property taken under such a disposition or affected by such a surrender, assurance, divesting, or disposition as aforesaid” shall be construed as including property affected by any such disposition or determination as is mentioned in sub-section (1) of this section, and the said words shall have effect accordingly and the subsequent words “disposition, surrender, assurance, or divesting” in the said sub-section shall be construed as including any such disposition or determination as is mentioned in the said sub-section (1), and the words “this section” shall be construed as including this present, section. | ||
(6) This section shall not operate in respect of any such surrender, assurance, divesting, or disposition as is mentioned in paragraph (c) of the proviso to section 14 of the Finance Act, 1914, so as to make any estate duty payable which would not have been payable but for that section. | ||
(7) This section shall have effect only in relation to persons dying after the 7th day of May, 1941. |