Section 147 Works of art etc.C4C1C2
United Kingdom
A gain accruing on the disposal of an asset by way of gift shall not be a chargeable gain if the asset is property falling within F1subsection (2) of section 26 of the Capital Transfer Tax Act 1984 (gifts for public benefit) and the Treasury give a direction in relation to it under subsection (1) of that section.
A gain shall not be a chargeable gain if it accrues on the disposal of an asset with respect to which a capital transfer tax undertaking or an undertaking under the following provisions of this section has been given and—
the disposal is by way of sale by private treaty to a body mentioned in Schedule 3 to the Capital Transfer Tax Act 1984 (museums, etc), or is to such a body otherwise than by sale, or
the disposal is to the Board in pursuance of section 230 of the Capital Transfer Tax Act 1984 or in accordance with directions given by the Treasury under section 50 or 51 of the M1Finance Act 1946 (acceptance of property in satisfaction of tax).
Subsection (4) below shall have effect in respect of the disposal of any asset which is property which has been or could be designated under section 31 of the Capital Transfer Tax Act 1984, being—
a disposal by way of gift, including a gift in settlement, or
a disposal of settled property by the trustee on an occasion when, under section 54(1) F2or 55(1) above, the trustee is deemed to dispose of and immediately re-acquire settled property (other than any disposal on which by virtue of section 56 above no chargeable gain or allowable loss accrues to the trustee),
if the requisite undertaking described in the said section 31 (maintenance, preservation and access) is given by such person as the Treasury think appropriate in the circumstances of the case.
The person making a disposal to which subsection (3) above applies and the person acquiring the asset on the disposal shall be treated for all the purposes of this Act as if the asset was acquired from the one making the disposal for a consideration of such an amount as would secure that on the disposal neither a gain nor a loss would accrue to the one making the disposal.
If—
there is a sale of the asset and capital transfer tax is chargeable under section 32 of the Capital Transfer Tax Act 1984 (or would be chargeable if a capital transfer tax undertaking as well as an undertaking under this section had been given), or
the Treasury are satisfied that at any time during the period for which any such undertaking was given it has not been observed in a material respect,
the person selling that asset or, as the case may be, the owner of the asset shall be treated for the purposes of this Act as having sold the asset for a consideration equal to its market value, and, in the case of a failure to comply with the undertaking, having immediately re-acquired it for a consideration equal to its market value.
The period for which an undertaking under this section is given shall be until the person beneficially entitled to the asset dies or it is disposed of, whether by sale or gift or otherwise; and if the asset subject to the undertaking is disposed of—
otherwise than on sale, and
without a further undertaking being given under this section,
subsection (5) above shall apply as if the asset had been sold to an individual.
References in this subsection to a disposal shall be construed without regard to any provision of this Act under which an asset is deemed to be disposed of.
Where under subsection (5) above a person is treated as having sold for a consideration equal to its market value any asset within section 31(1)(c), (d) or (e) of the Capital Transfer Tax Act 1984, he shall also be treated as having sold and immediately re-acquired for a consideration equal to its market value any asset associated with it; but the Treasury may direct that the preceding provisions of this subsection shall not have effect in any case in which it appears to them that the entity consisting of the asset and any assets associated with it has not been materially affected.
For the purposes of this subsection two or more assets are associated with each other if one of them is a building falling within the said section 31(1)(c) and the other or others such land or objects as, in relation to that building, fall within the said section 31(1)(d) or (e).
If in pursuance of subsection (5) above a person is treated as having on any occasion sold an asset and capital transfer tax becomes chargeable on the same occasion, then, in determining the value of the asset for the purposes of that tax, an allowance shall be made for the capital gains tax chargeable on any chargeable gain accruing on that occasion.
Annotations
Textual amendments
- F1
Words substituted by Inheritance Tax Act 1984 (c. 51), s. 276 and Sch. 8 para. 10
- F2
Words repealed by Finance Act 1982 (c. 39, SIF 63:2), s. 157 and Sch. 22 Part VI in relation to disposals after 5 April 1982
- F3
Words inserted by Inheritance Tax Act 1984 (c. 51), s. 276 and Sch. 8 para. 10
Marginal citations
- M1
- M2
Modifications
- C1
- C2
See Capital Transfer Tax Act 1984 (c. 51, SIF 65) and Finance Act 1986 (c. 41), s. 100 for occasions when Capital Transfer Tax Act 1984 (c. 51, SIF 65) renamed Inheritance Tax Act 1984 (c. 51)
- C3
See Finance Act 1988 (c. 39, SIF 63;1, 2), s. 96 and Sch. 8 para. 1
- C4
See— Diplomatic Privileges Act 1964 (c. 81); Commonwealth Secretariat Act 1966 (c. 10); International Organisations Act 1968 (c. 48); Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 505
Notes on the whole Act
Textual amendments
- F1
Act repealed (6.3.1992 with effect as mentioned in s. 289(1)(2) of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with s. 201(3), Sch. 11 paras. 20, 22, 26(2), 27 and with saving in Sch. 11 para. 24(2)) and subject to an amendment (prosp.) by Museum and Galleries Act 1992 (c. 44), s. 11(2), Sch. 8 Pt. I para. 1(1)(2)(7), and amendments by: Disability Living Allowance and Disability Working Allowance Act 1991 (c. 21), s. 4(2), Sch. 2 para. 9(1)(2) (in force 6.4.1992 by S.I. 1991/2617, art. 2(f)); S.I. 1991/2874, art. 2 (in force 6.4.1992 by S.R. 1992/94, art. 2); Social Security (Consequential Provisions) Act 1992 (c. 6), s. 4, Sch. 2 para. 52(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), s. 4, Sch. 2 para. 20(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Finance (No. 2) Act 1992 (c. 48), ss. 35(2), 47, 48, 56, 77, Sch. 9 para. 20(1)(inserting ss. 143A and 143B), Sch. 17 paras. 3, 6(2)(5), 7, (the amendments coming into force 16.7.1992 except for the amendment by s. 56, Sch. 9 para. 20(1) which comes into force on 19.2.1993 by S.I. 1993/236, art. 2); and amendments (retrospective to 1.1.1992) by ss. 35(2), 47, 48 of the same 1992 Act, and amendments (27.7.1993 with effect as mentioned in ss. 84(3), 86(4), 88(4), 105(4) of the amending Act) by 1993 c. 34, ss. 84(3), 86(4), 88(4)(a)(b), 105(3)(4)