Finance Act, 1994

Withdrawal of relief.

135.—(1) In this section “relevant period”, in relation to relevant business property comprised in a gift or inheritance, means the period of six years after the valuation date or the period between the date of the gift or inheritance and the date of a subsequent gift or inheritance consisting of the same property or of property representing that property, whichever is the lesser period.

(2) The reduction which would fall to be made under section 126 in respect of relevant business property comprised in a gift or inheritance shall cease to be applicable if and to the extent that the property, or any property which directly or indirectly replaces it—

(a) would not be relevant business property (apart from section 128 and the provisos to paragraphs (d) and (f) of subsection (1) of section 127 and other than by reason of bankruptcy or a bona fide winding-up on grounds of insolvency) in relation to a notional gift of such property taken by the same donee or successor from the same disponer at any time within the relevant period, unless it would be relevant business property (apart from section 128 and the provisos to paragraphs (d) and (f) of subsection (1) of section 127 ) in relation to another such notional gift taken within a year after the first-mentioned notional gift;

(b) is sold, redeemed or compulsorily acquired within the relevant period and is not replaced, within a year of the sale, redemption or compulsory acquisition, by other property (other than quoted shares or securities or unquoted shares or securities to which section 133 (2) (b) relates) which would be relevant business property (apart from section 128 and the proviso to section 127 (1) (d)) in relation to a notional gift of that other property taken by the same donee or successor from the same disponer on the date of the replacement,

and tax shall be chargeable in respect of the gift or inheritance as if the property were not relevant business property:

Provided that any land, building, machinery or plant which are comprised in the gift or inheritance and which qualify as relevant business property by virtue of section 127 (1) (e) shall, together with any similar property which has replaced such property, continue to be relevant business property for the purposes of this section for so long as they are used for the purposes of the business concerned.