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Legislation
Inheritance Tax Act 1984

CHAPTER II INTERESTS IN POSSESSION, REVERSIONARY INTERESTS AND SETTLEMENT POWERS

  • Section 49 Treatment of interests in possession.
  • Section 49A Immediate post-death interest
  • Section 49B Transitional serial interests
  • Section 49C Transitional serial interest: interest to which person becomes entitled during period 22nd March 2006 to 5th October 2008
  • Section 49D Transitional serial interest: interest to which person becomes entitled on death of spouse or civil partner on or after 6th October 2008
  • Section 49E Transitional serial interest: contracts of life insurance
  • Section 50 Interests in part, etc.
  • Section 51 Disposal of interest in possession.
  • Section 52 Charge on termination of interest in possession.
  • Section 53 Exceptions from charge under section 52.
  • Section 54 Exceptions from charge on death
  • Section 54A Special rate of charge where settled property affected by potentially exempt transfer.
  • Section 54B Provisions supplementary to section 54A.
  • Section 55A Purchased settlement powers
  • Section 55 Reversionary interest acquired by beneficiary.
  • Section 56 Exclusion of certain exemptions.
  • Section 57 Application of certain exemptions.
  • Section 57A Relief where property enters maintenance fund.
  1. Chapter II · INTERESTS IN POSSESSION, REVERSIONARY INTERESTS AND SETTLEMENT POWERS
  2. Exclusion of certain exemptions.

Section 56 | Exclusion of certain exemptions.

From legislation.gov.uk

(1)Sections 18 and 23 to 27 above shall not apply in relation to property which is given in consideration of the transfer of a reversionary interest if, by virtue of section 55(1) above, that interest does not form part of the estate of the person acquiring it.

(2)Where a person acquires a reversionary interest in any settled property for a consideration in money or money’s worth, section 18 above shall not apply in relation to the property when it becomes the property of that person on the termination of the interest on which the reversionary interest is expectant.

(3)Sections 23 to 27 above shall not apply in relation to any property if—

(a)the property is an interest in possession in settled property and the settlement does not come to an end in relation to that settled property on the making of the transfer of value, or

(b)immediately before the time when it becomes the property of the exempt body it is comprised in a settlement and, at or before that time, an interest under the settlement is or has been acquired for a consideration in money or money’s worth by that or another exempt body.

(4)In subsection (3)(b) above “exempt body” means a charity, political party or other body within sections 23 to 25 above or the trustees of a settlement in relation to which a direction under paragraph 1 of Schedule 4 to this Act has effect; and for the purposes of subsection (3)(b) there shall be disregarded any acquisition from a charity, political party or body within sections 23 to 25.F1

(5)For the purposes of subsections (2) and (3) above, a person shall be treated as acquiring an interest for a consideration in money or money’s worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that interest or of other property.F2

(6)Nothing in this section shall apply to a transfer of value if or to the extent that it is a disposition whereby the use of money or other property is allowed by one person to another.

(7)Subsection (2) above shall not apply where the acquisition of the reversionary interest was before 16th April 1976; and where the acquisition was on or after that date but before 12th April 1978 that subsection shall have effect—

(a)with the substitution for the words “section 18 above” of the words “sections 18 and 23 to 25 above”, andF1

(b)with the insertion after the word “person” in both places where it occurs of the words “or body”.

(8)Subsection (3)(b) above shall not apply where the acquisition of the interest was before 12th April 1978; and subsection (5) above shall not apply where the person concerned became entitled to the interest before that date.

Notes

  1. F1

    Words in s. 56(4)(7) substituted (31.7.1998 with effect in relation to any property becoming the property of any person on or after 17.3.1998) by 1998 c. 36, s. 143(3)

  2. F2

    Finance Act 1987 (No. 2) Sch. 7, para. 2,with effect from 17March 1987.

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