ihta84/s12.- Dispositions allowable for income tax or conferring retirement benefits.

[1976 s.89(1)T(5).]

12.-(1) A disposition made by any person is not a transfer of value if it is allowable in computing that person's profits or gains for the purposes of income tax or corporation tax or would be so allowable if those profits or gains were sufficient and fell to be so computed.

1988 c. 1.

(2) Without prejudice to subsection (1) above, a disposition made by any person is not a transfer of value if-

(a) it is a contribution to a retirement benefits scheme which is approved by the Board for the purposes of Chapter [I of Part XIV of the Income and Corporation Taxes Act 1988¹ (occupational pension schemes) and provides benefits in respect of service which is or includes service as a employee (as defined in that Chapter) of that person; or

(b) it is made so as to provide-

(i) benefits on or after retirement for a person not connected with him who is or has been in his employ, or

(ii) benefits on or after the death of such a person for his widow or dependants,

and does not result in the recipient receiving benefits which, having regard to their form and amount, are greater than what could be provided under a scheme approved as aforesaid; [or²]

(c) it is a contribution under approved personal pension arrangements within the meaning of Chapter [IV of Part XIV of the Income and Corporation Taxes Act 1988³] entered into by an employee of the person making the disposition²].

(3) Where a person makes dispositions of the kinds described in [more than one paragraph⁴ of subsection (2) above in respect of service by the same person, they shall be regarded as satisfying the conditions of that subsection only to the extent to which the benefits they provide do not exceed what could be provided by a disposition of the kind described in [any one⁵] of those paragraphs.

(4) For the purposes of subsection (2)(b) above, the right to occupy a dwelling rent-free or at a rent less than might be expected to be obtained in a transaction at arm's length between persons not connected with each other-shall be regarded as equivalent to a pension at a rate equal to the rent or additional rent that might be expected to be obtained in such a transaction.

(5) Where a disposition satisfies the conditions of the preceding provisions of this section to a limited extent only, so much of it as satisfies them and so much of it as does not satisfy them shall be treated as separate dispositions.

1 Substituted by 1988(T), Sch.29, para.32. Originally "II of Part II of the Finance Act 1970".

2 1987 (No.2), s.98(2), with effect from 23 July 1987.

3 Substituted by 1988(T), Sch.29, para.32. Originally "II of Part I of the Finance (No.2) Act 1987."

4 Substituted by 1987 (No.2), s.98(3) with effect from 23 July 1987. Originally "both paragraph (a) and paragraph (b)".

5 Substituted by 1987 (No.2), s.98(3) with effect from 23 July 1987. Originally "either".