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Amendment of provisions relating to discretionary trusts.
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111.— (1) The Principal Act is amended—
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(a) in section 2 by inserting the following after subsection (1):
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“(1A) For the purposes of the definition of ‘discretionary trust’ in subsection (1), any entity which is similar in its effect to a discretionary trust shall be treated as a discretionary trust irrespective of how it is described in the place where it is established.
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(1B) Any reference in this Act to trustees in relation to a discretionary trust shall be deemed to include persons acting in a similar capacity to trustees in relation to an entity referred to in subsection (1A).”,
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(b) in section 15 by inserting the following after subsection (1):
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“(1A) For the purposes of this section and section 20, where a discretionary trust is created under the will (including under a codicil to that will) of a deceased person property shall be deemed to be subject to the trust on the date of death of that person.”,
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(c) in section 18 in the definition of “relevant period” in subsection (1) by inserting “and” at the end of paragraph (b) and by deleting paragraph (c),
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(d) in section 18 by deleting the definition of “the appropriate trust” in subsection (1) and by inserting the following before the definition of “earlier relevant inheritance”:
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“ ‘appropriate trust’, in relation to a relevant inheritance, means the trust by which that inheritance was deemed to be taken;”,
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(e) in section 18 by deleting the definition of “will trust relevant inheritance”,
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(f) in section 18 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 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 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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and
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(g) in section 21 by substituting the following for paragraph (b):
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“(b) (i) subject to subparagraph (ii), the valuation date of the taxable inheritance is the relevant chargeable date,
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(ii) where—
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(I) a charge for tax arises on a particular date by reason of section 15 or section 118 (in so far as that section relates to a provision repealed by this Act that corresponds to section 15), giving rise to a taxable inheritance (in this subparagraph referred to as the ‘first taxable inheritance’),
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(II) on a later date, a charge for tax arises under or in consequence of the same disposition by reason of section 20 giving rise to a taxable inheritance (in this subparagraph referred to as the ‘second taxable inheritance’) comprising the same property or property representing that property, and
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(III) the valuation date of the first taxable inheritance is a date after the chargeable date of the second taxable inheritance,
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then the valuation date of the second taxable inheritance is the same date as the valuation date of the first taxable inheritance.”.
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(2) This section applies on and from 8 February 2012.
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