Paragraph 4 F1
For the purposes of this Schedule a loan is a relevant loan if and to the extent that money or money's worth made available under the loan is used to finance, directly or indirectly—
the acquisition by an individual, a partnership or the trustees of a settlement of—
F2relevant UK property, or
property to which paragraph 2 to any extent applies, or
the acquisition by an individual, a partnership or the trustees of a settlement of an interest in a close company or a partnership (“the intermediary”) and the acquisition by the intermediary of property within paragraph (a)(i) or (ii).
In this paragraph references to money or money's worth made available under a loan or sale proceeds being used “indirectly” to finance the acquisition of something include the money or money's worth or sale proceeds being used to finance—
the acquisition of any property the proceeds of sale of which are used directly or indirectly to finance the acquisition of that thing, or
the making, or repayment, of a loan to finance the acquisition of that thing.
In this paragraph references to the acquisition of F3relevant UK property by an individual, a partnership, the trustees of a settlement or a close company include the maintenance, or an enhancement, of the value of relevant UK property which is (as the case may be) the property of the individual, property comprised in the settlement or property of the partnership or close company.
Where the F4relevant UK property by virtue of which a loan is a relevant loan is disposed of, the loan ceases to be a relevant loan.
Where a proportion of the relevant UK property by virtue of which a loan is a relevant loan is disposed of, the loan ceases to be a relevant loan by the same proportion.
In this Schedule, references to a loan include an acknowledgment of debt by a person or any other arrangement under which a debt arises; and in such a case references to money or money's worth made available under the loan are to the amount of the debt.
Annotations
Textual amendments
- F1
Sch. A1 inserted (with effect in accordance with Sch. 10 para. 9 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 10 para. 1 (with Sch. 10 para. 9(2))
- F2
Words in Sch. A1 para. 4(1)(a)(i) substituted (with effect in accordance with Sch. 12 para. 20 of the amending Act) by Finance Act 2026 (c. 11), Sch. 12 paras. 18(3)(b)(i), 20
- F3
Words in Sch. A1 para. 4(3) substituted (with effect in accordance with Sch. 12 para. 20 of the amending Act) by Finance Act 2026 (c. 11), Sch. 12 paras. 18(3)(b)(ii), 20
- F4
Words in Sch. A1 para. 4(4)(5) substituted (with effect in accordance with Sch. 12 para. 20 of the amending Act) by Finance Act 2026 (c. 11), Sch. 12 paras. 18(4), 20
Notes on the whole Act
Textual amendments
- F1
By Finance Act 1986 s. 100(1), on and after 25 July 1986 the Capital Transfer Tax Act 1984 may be cited as the Inheritance Tax Act 1984.
Notes on Part 1
Textual amendments
- F2
Words in Sch. A1 Pt. 1 heading inserted (with effect in accordance with Sch. 12 para. 20 of the amending Act) by Finance Act 2026 (c. 11), Sch. 12 paras. 18(2), 20