Revenue Note for Guidance
This section deals with the situation where a person takes a beneficial interest in property which has the effect of increasing the value of any other property which he/she has already received from the same disponer. The increase in the value of the original property is deemed to be a gift or inheritance, as the case may be, taken on the date when he/she received the additional property.
The object of the section is to prevent the splitting of property for tax avoidance purposes in cases where the market value of the whole property is greater than the sum of its parts.
(1) “company”, in subsection (4), means a private company within the meaning of section 27.
(2) “property” does not include any property to which a donee or successor became beneficially entitled in possession prior to 28 February 1969.
(3) Where the taking by any person of a beneficial interest in any property (referred to as the additional property) under any disposition made by a disponer has the effect of increasing the value of any other property (referred to as the original property) to which that person is beneficially entitled in possession, and which has been derived from the same disponer, the following provisions apply:
(4) The re-valuation of the original gift will apply even if, at the date of the second transfer, the beneficiary has disposed of the original property within the previous 5 years (otherwise than for full consideration in money or money’s worth) or has disposed of it to a private company of which he/she has control within the meaning of section 27(4)(b).
Relevant Date: Finance Act 2015