Section 76 | Disposal of interests in settled property.

(1)Subject to subsection (1A) below No chargeable gain shall accrue on the disposal of an interest created by or arising under a settlement (including, in particular, an annuity or life interest, and the reversion to an annuity or life interest) by the person for whose benefit the interest was created by the terms of the settlement or by any other person except one who acquired, or derives his title from one who acquired, the interest for a consideration in money or money’s worth, other than consideration consisting of another interest under the settlement.^F1

(1A)Subject to subsection (3) below, subsection (1) above does not apply if—^F2

(a)the settlement falls within subsection (1B) below; or^F2

(b)the property comprised in the settlement is or includes property deriving directly or indirectly from a settlement falling within that subsection.^F2

(1B)A settlement falls within this subsection if there has been a time when the trustees of that settlement—^F2

(a)were not resident in the United Kingdom; or^F2F3F4

(b)fell to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom.^F2

(2)Subject to subsection (1) above, where a person who has acquired an interest in settled property (including in particular the reversion to an annuity or life interest) becomes, as the holder of that interest, absolutely entitled as against the trustee to any settled property, he shall be treated as disposing of the interest in consideration of obtaining that settled property (but without prejudice to any gain accruing to the trustee on the disposal of that property deemed to be effected by him under section 71(1)).

(3)Subsection (1A) above shall not prevent subsection (1) above from applying where the disposal in question is a disposal in consideration of obtaining settled property that is treated as made under subsection (2) above.^F5