I3.716 The disposal condition (chattels)
The 'disposal condition' in relation to a chattel is that:
(a) at any time after 17 March 1986 the chargeable person (whether alone or jointly with others) owned:
(i) the chattel, or
(ii) any other property the proceeds of the disposal of which were (directly or indirectly) applied by another person towards the acquisition of the chattel, and
(b) the chargeable person has disposed of all or part of his interest in the chattel or other property otherwise than by an excluded transaction1
The requirement in (a)(i) above (contained in FA 2004, Sch 15, para 6(2)(a)(i)) applies where the taxpayer is in possession of or has the use of a chattel, which he previously owned (either alone or with others) at any time after 17 March 1986.
The requirement in (a)(ii) above (contained in FA 2004, Sch 15, para 6(2)(a)(ii)) applies where the taxpayer (whether alone or with others) is in possession of or has the use of a chattel which he did not previously own, but which was acquired using (directly or indirectly) the disposal proceeds from any other property that he owned (whether alone or with others) at any time after 17 March 1986. The replaced property (ie the property previously owned) did not need to be chattels; it may have been any kind of property.
The expression 'property' is defined as having the same meaning as in IHTA 19842. Although IHTA 1984 contains no specific definition of 'property', it states that it includes rights and