Section 516 — Income Tax Act 2007: Transfer of property between settlements

Transfer of property between settlements 516 1 This section applies if the whole of the property comprised in a settlement becomes comprised in another settlement because of a tax-free transfer.

2 The occasion of charge under section 512, which would otherwise occur at the time of transfer, occurs when tax first becomes chargeable under that section in respect of any settlement comprising the transferred property (“the chargeable settlement”).

3 For the purposes of section 513(1) as it applies to the chargeable settlement, the relevant period is adjusted so that it begins—

a on the occasion when tax last became chargeable under section 512 in respect of any previous settlement from which the property was transferred, or b if there has been no such occasion, when such previous settlement (or the first of them) took effect.

4 In this section “ tax-free transfer ” means a transfer of property from one settlement into another in either of the following cases—

a where paragraph 9(1) of Schedule 4 to IHTA 1984 provides (or, but for paragraph 9(4) of that Schedule, would provide) an exception from charge in respect of the property, or b where, both immediately before and immediately after the transfer, the property is heritage maintenance property.