Commentary

I7.547 Taxation of maintenance funds before 9 March 1982

IHT, trusts and estates

I7.547 Taxation of maintenance funds before 9 March 1982

I7.547 Taxation of maintenance funds before 9 March 1982

The initial attempt at providing exemption for maintenance funds failed because the conditions were far too restrictive. The rules were relaxed by FA 1980 and the exemption as amended remained in force and applied to events occurring before 9 March 1982. This old exemption, as amended by FA 1980, is described below.

Transfers of property into a maintenance fund were exempt provided certain conditions were satisfied. During the period of the fund there was no ten year periodic charge. When property ceased to be part of a maintenance fund it became liable to tax unless one of the available exemptions applied.

Conditions for relief

A transfer of property into a maintenance fund was exempt only if all the conditions set out below were satisfied.

  1.  

    (a)     the Treasury1 was satisfied that all the following requirements had been met (whereupon it gave a direction, either before or after the transfer, exempting the property concerned)2

  2.  

    (b)     the property was settled upon trusts which conformed to the requirements set out below3

  3.  

    (c)     the settled property was of a character and amount appropriate for the purposes of the settlement4. (The Treasury had to be satisfied that it was of a suitable value in relation to the cost of upkeep of the building being preserved, and that it produced a reasonable amount of income)

  4.  

    (d)     the settlement was for the preservation of qualifying property5

  5.  

    (e)     for six years after any property became comprised in the settlement it could be

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