Commentary

I7.522 Charge on failure of conditions

IHT, trusts and estates

I7.522 Charge on failure of conditions

I7.522 Charge on failure of conditions

If the Board is (or, before 25 July 1985, the Treasury was) satisfied that an undertaking given under the exemption provisions1 in respect of deaths before 7 April 1976 has in any material respect not been observed, CTT becomes chargeable with respect to the property in question. Where the property involved is a building, land adjoining a building and essential for the preservation of its character etc, or an object historically associated with a building2, CTT is also chargeable in respect of the associated property3. So, for example, where an undertaking is breached in respect of a building, CTT is chargeable with respect to the building and any adjoining land or historically associated objects. Where the CTT became chargeable before 1 January 1985, it was charged under either FA 1975, s 32 (in respect of objects such as books, paintings etc falling under paragraph (e) in I7.521) or FA 1975, s 34 (in respect of land, buildings etc). Where the CTT becomes chargeable after 31 December 1984, it is charged under IHTA 1984, Sch 5, para 2 or 4, respectively.

The person liable for the CTT is the person who, if the property were sold at the time the tax becomes chargeable, would be entitled to receive (whether for his own benefit or not) the proceeds of sale or any income arising from them4.

If the undertaking is complied with, no CTT is chargeable5 if the property is:

  1.  

    •     sold by private treaty to one of

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