Commentary

I3.724 Relationship between disposal and contribution conditions (land and chattels)

IHT, trusts and estates

I3.724 Relationship between disposal and contribution conditions (land and chattels)

I3.724 Relationship between disposal and contribution conditions (land and chattels)

To trigger a charge under the pre-owned assets rules, it is necessary only that either the disposal condition or the contribution condition is met1. It is important to consider both conditions to determine whether one or the other may apply. Where both conditions are met as a result of the same circumstances, there will be only one charge2.

There is no statutory provision to deal with the situation where both conditions are met and the calculations of the respective charges produce different arithmetic consequences. This is considered unlikely to arise; if it were to do so, HMRC may seek to tax the higher of the two charges.

There appears to be a potential overlap of the disposal and contribution conditions. For example, money given to a third party and used to acquire the relevant land or the chattel may fall clearly within the contribution condition, but there seems to be nothing to prevent the money itself from being treated as 'other property' for the purposes of FA 2004, Sch 15, para 3(2) or para 6(2), thus triggering the disposal condition also. An alternative view is that money cannot be caught by the disposal condition in this way

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial