Section 59 Qualifying interest in possession.

United Kingdom

F1(1)

In this Chapter “qualifying interest in possession” means—

(a)

an interest in possession—

(i)

to which an individual is beneficially entitled, and

(ii)

which, if the individual became beneficially entitled to the interest in possession on or after 22nd March 2006, is an immediate post-death interest, a disabled person's interest or a transitional serial interest, or

(b)

an interest in possession to which, where subsection (2) below applies, a company is beneficially entitled.

(2)

This subsection applies where—

(a)

the business of the company consists wholly or mainly in the acquisition of interests in settled property, and

(b)

the company has acquired the interest for full consideration in money or money’s worth from an individual who was beneficially entitled to it F2, and

(c)

if the individual became beneficially entitled to the interest in possession on or after 22nd March 2006, the interest is an immediate post-death interest, or a disabled person's interest within section 89B(1)(c) or (d) below or a transitional serial interest, immediately before the company acquires it.

(3)

Where the acquisition mentioned in paragraph (b) of subsection (2) above was before 14th March 1975—

(a)

the condition set out in paragraph (a) of that subsection shall be treated as satisfied if the business of the company was at the time of the acquisition such as is described in that paragraph, and

(b)

that condition need not be satisfied F3if the company F4—

(i)

is an insurance company (within the meaning of Part 2 of the Finance Act 2012), and

(ii)

has permission under Part 4A of the Financial Services and Markets Act 2000 to effect or carry out contracts of long-term insurance.

F5(4)

In subsection (3)(b) above “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

Annotations

Textual amendments

F1: S. 59(1) substituted (22.3.2006) by Finance Act 2006 (c. 25), s. 156, Sch. 20 para. 20(2)
F2: S. 59(2)(c) and preceding word inserted (22.3.2006) by Finance Act 2006 (c. 25), s. 156, Sch. 20 para. 20(3)
F3: Words in s. 59(3) substituted (1.5.1995 with effect as mentioned in s. 52(5) of the amending Act) by 1995 c. 4, s. 52(4)
F4: Words in s. 59(3)(b) substituted (31.1.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 3(2) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)
F5: S. 59(4) added (1.12.2001 with effect as mentioned in art. 5(4) of the amending S.I.) by S.I. 2001/3629, art. 5(1)(3)(4)

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 Chapter III

Textual amendments

F1: Words in Pt. 3 Ch. 3 heading added (22.3.2006) by Finance Act 2006 (c. 25), s. 156, Sch. 20 para. 20(5)

Modifications

C1

See Finance Act 1990 s. 126—exemption for pools payments to trustees for football ground improvements in respect of events on or after 6April 1990.

C2

Pt. 3 Ch. 3 modified (22.7.2004) by Finance Act 2004 (c. 12), s. 283, Sch. 36 para. 57(1) (with s. 283(5))

C3

Pt. 3 Ch. 3 modified (22.7.2004) by Finance Act 2004 (c. 12), s. 283, Sch. 36 para. 56(2)(b) (with s. 283(5))

C4

Part III Chapter III (ss.58-85) excluded by Finance Act 1991 (c.31, SIF 63:1), s. 121(4).

Pt. III Ch. III (ss. 58-85) restricted (3.5.1994) by 1994 c. 9, s. 248