PART 5

Capital Acquisitions Tax

126. —(1) The Finance Act, 1991 , is hereby amended by the substitution of the following section for section 117:

“117.—(1) In so far as an inheritance consists of a house or the appropriate part of a house—

(a) at the date of the inheritance, and

(b) at the valuation date,

and is taken by a successor who, at the date of the inheritance, is a lineal ancestor, a lineal descendant (other than a child, or a minor child of a deceased child), a brother or a sister, or a child of a brother or of a sister, of the disponer, and

(i) has resided continuously with the disponer in the house or, where that house has directly or indirectly replaced other property, in that house and in that other property, for periods which together comprised—

(I) in the case where the successor is a brother or a sister of the disponer and has, at the date of the inheritance, attained the age of 55 years, the 5 years immediately preceding the date of the inheritance, and

(II) in any other case, the 10 years immediately preceding the date of the inheritance, and

(ii) is not beneficially entitled in possession to any other house or the appropriate part of any other house,

the estimated market value of the house or the appropriate part of the house shall, notwithstanding anything to the contrary in section 15 of the Principal Act, be reduced by 80 per cent or £150,000, whichever is the lesser:

Provided that where the house or the appropriate part of the house comprised in the inheritance is, on both of those dates, agricultural property within the meaning of section 19 (1) of the Principal Act and the successor is, at the valuation date and after taking the inheritance, a farmer within the meaning of that section, the provisions of this section shall not apply.

(2) In this section—

‘appropriate part’, in relation to a house, has the meaning assigned to it in relation to property by subsection (5) of section 5 of the Principal Act;

‘house’ means a building, or a part of a building used by the disponer as his main or only dwelling together with its garden or grounds of an ornamental nature.”.

(2) This section shall have effect in relation to inheritances taken on or after the 3rd day of December, 1997.

127. —(1) Section 117 of the Finance Act, 1993 , is hereby amended—

(a) in paragraph (b), by the substitution of “one per cent” for “one and one-quarter per cent.”, and

(b) in paragraph (c), by the substitution of “one per cent” for “one and one-quarter per cent.”.

(2) This section shall have effect in relation to probate tax due before, on or after the date of the passing of this Act where the period in respect of which interest is to be charged, or a discount falls to be made, commences on or after that date.

128. — Section 134 of the Finance Act, 1994 , shall have effect and be deemed always to have had effect as if the following subsections were substituted for subsection (7):

“(7) Where, in relation to a gift or an inheritance—

(a) relevant business property consisting of shares in or securities of a company are comprised in the gift or inheritance on the valuation date, and

(b) property consisting of a business, or interest in a business, not falling within section 127(4) (hereinafter in this section referred to as ‘company business property’) is on that date beneficially owned by that company or, where that company is a holding company of one or more companies within the same group, by any company within that group,

that company business property shall, for the purposes of subsection (1), be excluded property in relation to those shares or securities unless it would, apart from section 127(3), have been relevant business property if—

(i) it had been the subject matter of that gift or inheritance, and

(ii) it had been comprised in the disposition for the periods during which it was in the beneficial ownership of that first-mentioned company or of any member of that group, while being such a member, or actually comprised in the disposition.

(8) In ascertaining whether or not company business property complies with paragraphs (i) and (ii) of subsection (7), the provisions of section 129 shall, with any necessary modifications, apply to that company business property as to a case to which subsection (1) of section 129 relates.”.

129. —(1) The Capital Acquisitions Tax Act, 1976 , is hereby amended by the insertion of the following section after section 52 of that Act:

“52A.—No appeal shall lie under section 51 or 52 until such time as the person aggrieved by the decision or assessment (as the case may be) complies with section 36(2) in respect of the gift or inheritance in relation to which the decision or assessment is made, as if there were no time-limit for complying with section 36(2) and that person were a person primarily accountable for the payment of tax by virtue of section 35(1) and required by notice in writing by the Commissioners to deliver a return.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 12th day of February, 1998.