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Finance Act, 2000

Amendment of Chapter 1 (business relief) of Part VI of Finance Act, 1994.

148.—(1) Part VI of the Finance Act, 1994 , is amended in Chapter 1—

(a) in section 134, by the substitution of the following subsections for subsections (1) and (2):

“(1) In determining for the purposes of this Chapter what part of the taxable value of a gift or inheritance is attributable to the value of relevant business property so much of the last-mentioned value as is attributable to—

(a) any excepted assets within the meaning of subsection (2), or

(b) any excluded property within the meaning of subsection (7),

shall be left out of account.

(2) An asset shall be an excepted asset in relation to any relevant business property if it was not used wholly or mainly for the purposes of the business concerned throughout the whole or the last two years of the relevant period, but where the business concerned is carried on by a company which is a member of a group, the use of an asset for the purposes of a business carried on by another company which at the time of the use and immediately prior to the gift or inheritance was also a member of that group shall be treated as use for the purposes of the business concerned, unless that other company's membership of the group falls to be disregarded under section 133:

Provided that the use of an asset for the purposes of a business to which section 127(4) relates shall not be treated as use for the purposes of the business concerned.”,

(b) in section 135—

(i) by the substitution of the following subsection for subsection (1):

“(1) In this section ‘relevant period’, in relation to relevant business property comprised in a gift or inheritance, means the period of 6 years commencing on the date of the gift or inheritance.”,

and

(ii) by the substitution of the following paragraph for paragraphs (ii) and (iii) of the proviso (inserted by the Finance Act, 1996 ) to subsection (2):

“(ii) this section shall not have effect where the donee or successor dies before the event which would otherwise cause the reduction to cease to be applicable.”,

and

(c) by the insertion of the following section after section 135:

“Avoidance of double relief.

135A.—Where the whole or part of the taxable value of any taxable gift or taxable inheritance is attributable to agricultural property to which subsection (2) of section 19 of the Principal Act applies, such whole or part of the taxable value shall not be reduced under this Chapter.”.

(2) Paragraphs (a) and (c) of subsection (1) shall have effect in relation to gifts or inheritances taken on or after 10 February 2000 and paragraph (b) of subsection (1) shall have effect where the event which causes the reduction to cease to be applicable occurs on or after 10 February 2000.