Finance Act, 1984

Acquisitions by discretionary trusts.

106.—(1) Where, on or after the 25th day of January, 1984, under or in consequence of any disposition, property becomes subject to a discretionary trust (which expression has in this Part the meaning assigned to it by the Principal Act as amended by section 105 ) otherwise than for full consideration in money or money's worth paid by the trustees of the trust, the trust shall be deemed, on—

(a) the date on which that property becomes or became subject to the discretionary trust;

(b) the date of death of the disponer; or

(c) where there are principal objects of the trust, the date on which there ceases to be a principal object of the trust who is under the age of 25 years,

whichever date is the latest, to become or to have become beneficially entitled in possession to an absolute interest in so much, if any, of that property or of property representing that property and of accumulations of income thereof or of property representing those accumulations as remains subject to the discretionary trust on that latest date, and to take or to have taken an inheritance accordingly as if the trust, and the trustees as such for the time being of the trust, were together a person for the purposes of the Principal Act, and that latest date shall be the date of the inheritance.

(2) Property which, under or in consequence of any disposition, was subject to a discretionary trust on the 25th day of January, 1984, shall, for the purposes of subsection (1), be deemed to have become subject to the trust on that date.

(3) For the purposes of this section—

(a) an interest in expectancy shall not be property until an event happens whereby the interest ceases to be an interest in expectancy or is represented by property which is not an interest in expectancy;

(b) an interest in a policy of assurance upon human life shall not be property until, and then only to the extent that, the interest becomes an interest in possession under the provisions of section 32 of the Principal Act or is represented by property which is not an interest in expectancy.

(4) Where, apart from this subsection, property or property representing such property would be chargeable under this section with tax more than once under the same disposition, such property shall be so chargeable with tax once only, that is to say, on the earliest occasion on which such property becomes so chargeable with tax.