CHAPTER IIIU.K. SETTLEMENTS WITHOUT INTERESTS IN POSSESSION [F1, AND CERTAIN SETTLEMENTS IN WHICH INTERESTS IN POSSESSION SUBSIST]

Principal charge to taxU.K.

[F2(7A)Tax shall not be charged under this section by reason only that property comprised in a settlement becomes excluded property by virtue of section 48(3A)(a) (holding in an authorised unit trust or a share in an open-ended investment company is excluded property unless settlor domiciled in UK when [F3property became comprised in settlement]).]

[F4(7B)Tax shall not be charged under this section by reason only that property comprised in a settlement becomes excluded property by virtue of section 48(3E) ceasing to apply in relation to it.]

[F5(7C)Tax shall not be charged under this section by reason only that property comprised in a settlement ceases to any extent to be property to which paragraph 2 or 3 of Schedule A1 applies and thereby becomes excluded property by virtue of section 48(3)(a) above.

(7D)Tax shall not be charged under this section where property comprised in a settlement or any part of that property—

(a)is, by virtue of paragraph 5(2)(a) of Schedule A1, not excluded property for the two year period referred to in that paragraph, but

(b)becomes excluded property at the end of that period.]

(8)If the settlor of [F6property comprised in] a settlement was not domiciled in the United Kingdom when the [F7property became comprised in the settlement (but see also subsection (8A))], tax shall not be charged under this section by reason only that [F8the property] is invested in securities issued by the Treasury subject to a condition of the kind mentioned in section 6(2) above and thereby becomes excluded property by virtue of section 48(4)(b) above.

[F9(8A)If—

(a)an amount is payable in respect of property (“the existing property”) comprised in a settlement, and

(b)the amount represents an accumulation of income which (once accumulated) becomes comprised in the settlement,

subsection (8) has effect, in the case of the amount, as if any reference to the time it became comprised in the settlement were to the time the existing property became comprised in the settlement.]

(9)For the purposes of this section trustees shall be treated as making a disposition if they omit to exercise a right (unless it is shown that the omission was not deliberate) and the disposition shall be treated as made at the time or latest time when they could have exercised the right.