Section 55A — Inheritance Tax Act 1984: Purchased settlement powers

Purchased settlement powers 55A 1 Where a person makes a disposition by which he acquires a settlement power for consideration in money or money’s worth—

a section 10(1) above shall not apply to the disposition;

b the person shall be taken for the purposes of this Act to make a transfer of value;

c the value transferred shall be determined without bringing into account the value of anything which the person acquires by the disposition;

and d sections 18 and 23 to 27 above shall not apply in relation to that transfer of value.

2 For the purposes of this section, a person acquires a settlement power if he becomes entitled—

a to a settlement power, b to exercise, or to secure or prevent the exercise of, a settlement power (whether directly or indirectly), or c to restrict, or secure a restriction on, the exercise of a settlement power (whether directly or indirectly), as a result of transactions which include a disposition (whether to him or another) of a settlement power or of any power of a kind described in paragraph (b) or (c) above which is exercisable in relation to a settlement power.