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Legislation
Inheritance Tax Act 1984

Crossheading Transfers by close companies

  • Section 94 Charge on participators.
  • Section 95 Participator in two companies.
  • Section 96 Preference shares disregarded.
  • Section 97 Transfers within group, etc.
  1. Transfers by close companies
  2. Transfers within group, etc.

Section 97 | Transfers within group, etc.

From legislation.gov.uk

(1)Where a close company (“the transferor company”) is a member, but not the principal company, of a group and—F1

(a)there is—F2

(i)a disposal of an asset by the transferor company, which is a disposal to which section 171(1) of the 1992 Act applies, orF2

(ii)by virtue of an election under section 171A(2) of that Act, a deemed transfer by the transferor company to another member of the group,. . .F2F3F4

(iii)RepealedF2F3F4

(aa)the disposal is also, or the election gives rise to, a transfer of value, andF2F5

(b)the transfer of value has only a small effect on the value of the minority participators’ rights and interests in that company compared with its effect on the value of the other participators’ rights and interests in the company,

the rights and interests of the minority participators shall be left out of account in determining the respective rights and interests of the transferor company’s participators for the purpose of apportioning the value transferred under section 94 above.

(2)For the purposes of subsection (1) above—F6

(a)Section 170 of the 1992 Act (groups of companies: definitions) applies as for the purposes of sections 171 to 181 of that Act, andF7F8

(b)a minority participator is a participator of the transferor company who is not, and is not a person connected with, a participator of the principal company of the group or of any of the principal company’s participators;F9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes

  1. F1

    Finance Act 1989 s. 138(6)(a),with effect from 14March 1989.Originally

    “member”.

  2. F2

    S. 97(1)(a)(aa) substituted for para. (a) (11.5.2001 with effect as mentioned in s. 106(3) of the amending Act) by 2001 c. 9, s. 106

  3. F3

    S. 97(1)(a)(iii) and preceding word inserted (24.7.2002 with application as mentioned in s. 42(4) of the amending Act) by 2002 c. 23, s. 42(3)(a)

  4. F4

    S. 97(1)(a)(iii) and preceding word repealed (with effect as mentioned in Sch. 10 para. 9 of the amending Act) by Finance Act 2011 (c. 11), s. 65, Sch. 10 para. 8(a)

  5. F5

    Words in s. 97(1)(aa) substituted (24.7.2002 with application as mentioned in s. 42(4) of the amending Act) by 2002 c. 23, s. 42(3)(b)

  6. F6

    Repealed by Finance Act 1989 s. 138(6)(c)and Sch.17 Part VII,with effect from 14March 1989.

  7. F7

    Finance Act 1989 s. 138(6)(b),with effect from 14March 1989.Originally

    “the principal member of a group is the member of which all the other members are 75 per cent subsidiaries”.

  8. F8

    Words in s. 97 substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the substituting Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 8(4)(b) (with ss. 60, 101(1), 201(3)).

  9. F9

    Finance Act 1989 s. 138(6)(a),with effect from 14March 1989.Originally

    “member”

    and

    “member's”

    respectively.

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