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Amendment of section 18 (computation of tax) of Principal Act.
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113.— (1) Section 18 of the Principal Act is amended—
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(a) by substituting the following for the definition of “ relevant period ” in subsection (1):
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“ ‘ relevant period ’ means—
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(a) in relation to an earlier relevant inheritance, the period of 5 years commencing on the date of death of the disponer,
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(b) in relation to a settled relevant inheritance, the period of 5 years commencing on the date of death of the life tenant concerned,
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(c) in relation to a will trust relevant inheritance, the period of 5 years commencing on the date when property becomes subject to a discretionary trust which was created under the will of the disponer, and
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(d) in relation to a later relevant inheritance, the period of 5 years commencing on the latest date on which a later relevant inheritance was deemed to be taken from the disponer;”,
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(b) by substituting the following for the definition of “the appropriate trust” in subsection (1):
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“ ‘ the appropriate trust ’, in relation to a relevant inheritance, means the trust by which the inheritance was deemed to have been taken;
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‘ will trust relevant inheritance ’ means a relevant inheritance deemed to be taken when property becomes subject to a discretionary trust which was created under the will of the disponer.”,
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and
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(c) by substituting the following for subsection (3):
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“(3) Where, in the case of each earlier relevant inheritance, each settled relevant inheritance, each will trust relevant inheritance or each later relevant inheritance, as the case may be, taken from the same disponer, one or more objects of the appropriate trust became beneficially entitled in possession before the expiration of the relevant period to an absolute interest in the entire of the property of which that inheritance consisted on and at all times after the date of that inheritance (other than property which ceased to be subject to the terms of the appropriate trust by virtue of a sale or exchange of an absolute interest in that property for full consideration in money or money’s worth), then, in relation to all such earlier relevant inheritances, all such settled relevant inheritances, all such will trust relevant inheritances or all such later relevant inheritances, as the case may be, the tax so chargeable is computed at the rate of 3 per cent.”.
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(2) This section applies to inheritances deemed to be taken on or after 1 February 2007.
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