Section 71B: Charge to tax on property to which section 71A applies, Inheritance Tax Act 1984

Subject to subsections (2) , (2B) and (3) below, there shall be a charge to tax under this section—

where settled property ceases to be property to which section 71A above applies, and

in a case where paragraph (a) above does not apply, where the trustees make a disposition as a result of which the value of settled property to which section 71A above applies is less than it would be but for the disposition.

Tax is not charged under this section where settled property ceases to be property to which section 71A applies as a result of—

the bereaved minor attaining the age of 18 or becoming, under that age, absolutely entitled as mentioned in section 71A(3)(a) above, or

the death under that age of the bereaved minor, or

being paid or applied for the advancement or benefit of the bereaved minor.

Subsection (2B) applies in a case in which—

an amount is paid or applied otherwise than for the benefit of the bereaved minor, and

the exemptions provided by subsection (2) of this section and subsections (3) and (4) of section 70 do not apply.

In such a case, tax is not charged under this section in respect of whichever is the lower of the following amounts—

the amount paid or applied, and

the annual limit.

Subsections (3) to (8) and (10) of section 70 above apply for the purposes of this section as they apply for the purposes of that section, but—

with the substitution of a reference to subsection (1)(b) above for the reference in subsection (4) of section 70 above to subsection (2)(b) of that section,

with the substitution of a reference to property to which section 71A above applies for each of the references in subsections (3), (5) and (8) of section 70 above to property to which that section applies,

as if, for the purposes of section 70(8) above as applied by this subsection, property—

which is property to which section 71A above applies,

which, immediately before it became property to which section 71A above applies, was property to which section 71 above applied, and

which, by the operation of section 71(1B) above, ceased on that occasion to be property to which section 71 above applied,

had become property to which section 71A above applies not on that occasion but on the occasion (or last occasion) before then when it became property to which section 71 above applied, and

as if, for the purposes of section 70(8) above as applied by this subsection, property—

which is property to which section 71A above applies,

which, immediately before it became property to which section 71A above applies, was property to which section 71D below applied, and

which, by the operation of section 71D(5)(a) below, ceased on that occasion ("the 71D-to-71A occasion") to be property to which section 71D below applied,

had become property to which section 71A above applies not on the 71D-to-71A occasion but on the relevant earlier occasion.

In subsection (3)(d) above—

"the relevant earlier occasion" means the occasion (or last occasion) before the 71D-to-71A occasion when the property became property to which section 71D below applied, but

if the property, when it became property to which section 71D below applied, ceased at the same time to be property to which section 71 above applied without ceasing to be settled property, "the relevant earlier occasion" means the occasion (or last occasion) when the property became property to which section 71 above applied.

Section 71B: Charge to tax on property to which section 71A applies

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