Paragraph 15 Effect on section 65(5)(b) IHTA charge etc

After paragraph 13A (as inserted by paragraph 14 of this Schedule) insert—

“Effect of this Schedule on section 65(5) IHTA 1984 and section 260(2) of TCGA 1992

13B

(1)

The effects of Parts 1 and 2 of this Schedule are to be ignored for the purposes of section 65(5)(b) of IHTA 1984 (and accordingly will not prevent any amount being regarded as income of a person for the purposes of income tax for the purposes of that section).

(2)

Where—

(a)

the trustees of a settlement make a capital payment to an individual,

(b)

the making of that payment results in the individual having qualifying overseas capital,

(c)

that qualifying overseas capital is designated,

so much of the deemed disposal under section 71 of TCGA 1992 arising on the making of the payment as reflects the designated qualifying overseas capital is (despite sub-paragraph (1)) treated as a chargeable transfer within the meaning of IHTA 1984 for the purposes only of section 260(2)(a) of TCGA 1992 (gifts on which inheritance tax is chargeable etc).”