Schedule 4
Finance Bill
12:30 pm
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
I beg to move amendment No. 62, in schedule 4, page 131, line 39, leave out from beginning to end of line 7 on page 132 and insert—
‘(3) Where a claim is made under this section, the nil-rate band maximum at the relevant time is to be treated for the relevant purposes as increased by the relevant percentage specified in subsection (4) below (but subject to subsection (5) and section 8C below).
(3A) For the purposes of subsection (3) above—
(a) where the claim specifies that it is made in relation to the death of the survivor (“a death claim”)—
(i) “the relevant time” is the time of the survivor’s death, and
(ii) “the relevant purposes” are the purposes of the change to tax or additional tax on or by reason of the death of the survivor;
and
(b) where the claim specifies that it is made in relation to an immediately chargeable lifetime transfer (meaning a chargeable transfer which is not made on death and which was not a potential exempt transfer) (“a lifetime claim”)—
(i) “the relevant time” is the date on which that chargeable transfer was made, and
(ii) “the relevant purposes” are the purposes of the charge to tax on that chargeable transfer (not being additional tax payable by reason of the death of the survivor).
(4) For the purposes of subsection (3) above, but subject to subsection (4A) below, “the relevant percentage” is—
where—
E is the amount by which M is greater than VT in the case of the deceased person; and
NRBM is the nil-rate band maximum at the relevant time.
(4A) Where a claim has been made under this section in relation to an immediately chargeable lifetime transfer (“the spent transfer”) and the survivor’s death did not occur within 7 years after the date on which that chargeable transfer was made (“the spent transfer date”), then for the purpose of all claims under this section in relation to occasions (whether immediately chargeable lifetime transfers or the death of the survivor) on or after the seventh anniversary of the spent transfer date the adjustment specified in subsection (4B) below shall be made for the purpose of calculating the relevant percentage under subsection (4) above.
(4B) Subject to subsection (4C) below, E for the purpose of the formula in subsection (4) above shall be reduced by R per cent of itself where—
PNRB is the amount which would have been survivor’s nil-rate band maximum at the time of the spent transfer if no claim had been made under this section in relation to the spent transfer;
TNRB is the survivor’s nil-rate band maximum as computed in the light of the claim made under this section in relation to the spent transfer; and
ELT is the amount by which the value transferred by the spent transfer, added to the value transferred by any chargeable transfers made by the survivor within 7 years before the spent transfer, exceeded PNRB.
(4C) Where an adjustment was made under subsection (4A) above in calculating the relevant percentage in relation to the spent transfer, the adjustment specified in subsection (4B) above shall be made in relation to the amount to which E was adjusted on that occasion; and this subsection shall apply cumulatively where lifetime claims have been made in relation to successive spent transfers each of which has given rise to an adjustment under subsection (4B) above.’.