Finance Act, 1938

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PART IV.

Death Duties.

Estate duty on cesser by death of a limited interest in settled property.

26.—(1) The following provisions shall have effect, for the purposes of Part I of the Finance Act, 1894 , in relation to the death of a person who dies after the passing of this Act and on whose death an interest in the residue of the estate, or in a part of the residue of the estate, of a testator is limited to cease and who dies before the completion of the administration of that estate, that is to say:—

(a) the said interest shall, until the completion of the administration of the said estate, be deemed to be an interest in—

(i) the unadministered estate of the said testator, as for the time being held by his personal representatives but subject to outstanding charges on residue in so far as those charges are payable out of the said unadministered estate and subject to any adjustments between capital and income remaining to be made in due course of administration, and

(ii) the property (if any) representing ascertained residue of the said estate;

(b) the said interest shall be deemed to have become an interest in possession on the date as from which the income of the said residue would have been attributable to the said interest if the said residue had been ascertained immediately after the death of the said testator;

(c) where the said interest is an interest in a part only of the residue of an estate, references in the foregoing paragraphs of this sub-section to unadministered estate, to residue, and to charges on residue shall be construed as referring only to the part of the unadministered estate, of the residue, and of the charges on residue respectively to which such interest extends or which is otherwise appropriate to the context.

(2) In this section—

the expression “unadministered estate” means all property for the time being held by the personal representatives of a testator as such personal representatives, but excluding property devolving on the personal representatives otherwise than as assets for the payment of the debts of the testator and also excluding property which is the subject of a specific disposition;

the expression “ascertained residue” means property which, having ceased to be held by the personal representatives as personal representatives, is held as part of the residue;

the expression “personal representatives” means, in relation to the estate of a deceased person, his executors as defined by paragraph (d) of sub-section (1) of section 22 of the Finance Act, 1894 , and includes persons having under the law of another country any function in relation to a deceased person corresponding to a function for administration purposes under the law of Ireland of executors as so defined;

the expression “specific disposition” means a specific devise or specific bequest made by a testator, and includes any disposition having, whether by statute or otherwise, an effect under the law of Ireland or of another country similar to the effect of a specific devise or specific bequest under the law of Ireland.

(3) Real estate which vests in the personal representatives of a testator (whether by statute or by an express provision in the will of such testator) and is included (whether by a specific or a general description) in a residuary gift made by such will shall be deemed for the purposes of this section to be part of the residue of the estate of such testator and not to be the subject of a specific disposition.