Section 107 — Inheritance Tax Act 1984: Replacements.

Replacements. 107 1 Property shall be treated as satisfying the condition in section 106 above if—

a it replaced other property and it, that other property and any property directly or indirectly replaced by that other property were owned by the transferor for periods which together comprised at least two years falling within the five years immediately preceding the transfer of value, and b any other property concerned was such that, had the transfer of value been made immediately before it was replaced, it would (apart from section 106) have been relevant business property in relation to the transfer.

2 In a case falling within subsection (1) above relief under this Chapter shall not exceed what it would have been had the replacement or any one or more of the replacements not been made.

3 For the purposes of subsection (2) above changes resulting from the formation, alteration or dissolution of a partnership, or from the acquisition of a business by a company controlled by the former owner of the business, shall be disregarded.

4 Without prejudice to subsection (1) above, where any shares falling within section 105(1)(aa) , (ac) or (bb) above which are owned by the transferor immediately before the transfer would under any of the provisions of sections 126 to 136 of the 1992 Act be identified with other shares previously owned by him his period of ownership of the first-mentioned shares shall be treated for the purposes of section 106 above ... as including his period of ownership of the other shares.