ihta84/s72.- Property leaving employee trusts and newspaper trusts.

[1982
s.116(1).]

72.-(1) This section applies to settled property to which section 86 below applies if no qualifying interest in possession subsists in it.

[1982
s.116(2).]

(2) Subject to subsections (4) and (5) below, there shall be a charge to tax under this section-

(a) where settled property ceases to be property to which this section applies, otherwise than by virtue of a payment out of the settled property, and

(b) where a payment is made out of settled property to which this section applies for the benefit of a person within subsection (3) below, or a person connected with such a person, and

(c) in a case which paragraphs (a) and (b) above do not apply, where the trustees make a disposition (otherwise than by way of a payment out of the settled property) as a result of which the value of settled property to which this section applies is less than it would be but for the disposition.

[1982 s.116(3).]

(3) A person is within this subsection if-

(a) he has directly or indirectly provided any of the settled property otherwise than by additions not exceeding in value 1,000 in any one year; or

(b) in a case where the employment in question is employment by a close company, he is a participator in relation to that company and either-

(i) is beneficially entitled to, or to rights entitling him to acquire, not less than 5 per cent. of, or of any class of the shares comprised in, its issued share capital, or

(ii) would, on a winding-up of the company, be entitled to not less than 5 per cent. of its assets; or

(c) he has acquired an interest in the settled property for a consideration in money or money's worth.

[1982
s.116(4).]

(4) If the trusts are those of a profit sharing scheme approved in accordance with Schedule 9 to the [Taxes Act 1988 ¹ ], tax shall not be chargeable under this section by virtue of subsection (3)(b) above on an appropriation of shares in pursuance of the scheme.

[1982 s.116(5);
1984 s.102(1).]

(5) Subsections (3) to (10) of section 70 above shall apply for the purposes of this section as they apply for the purposes of that section (with the substitution of a reference to subsection (2)(c) above for the reference in section 70(4) to section 70(2)(b)).

[1982
s.116(6).]

(6) In this section-

(a) "close company" and "participator" have the same meanings as in Part IV of this Act; and

(b) "year" means the period beginning with 26th March 1974 and ending with 5th April 1974, and any subsequent period of twelve months ending with 5th April;

and a person shall be treated for the purposes of this section as acquiring an interest for a consideration in money or money's worth if he becomes entitled to it as a result of transactions which include a disposition for such consideration (whether to him or another) of that interest or of other property.

1 Substituted by 1988(T) Sch.29, para.32. Originally "Finance Act 1978".