Section 5 Meaning of estate
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(1) For the purpose of this act a person's estate is the aggregate of all the property to which he is beneficially entitled, [except that—
(a) the estate of a person—
(i) does not include an interest in possession in settled property to which section 71A or 71D below applies, and
(ii) does not include an interest in possession that falls within subsection (1A) below, and
(b) the]1 estate of a person immediately before his death does not include excluded property [or a foreign-owned work of art which is situated in the United Kingdom for one or more of the purposes of public display, cleaning and restoration (and for no other purpose).]2
Amendments
1 Substituted by Finance Act 2006 section 156 and Schedule 20 para 10(2) from 22 March 2006.
2 Inserted by S.I. 2009/730 article 13(2) in relation to deaths and ten-year anniversaries occurring on or after 6 April 2009.
(1A) An interest in possession falls within this subsection if—
(a) it is an interest in possession in settled property,
(b) the settled property is not property to which section 71A or 71D below applies,
(c) the person is beneficially entitled to the interest in possession,
(d) the person became beneficially entitled to the interest in possession on or after 22nd March 2006, and
(e) the interest in possession is—
(i) not an immediate post-death interest,
(ii) not a disabled person's interest, and
(iii) not a transitional serial interest.
Amendments
Subs (1A) inserted by Finance Act 2006 section 5 para 10(3) from 22 March 2006.
(2) A person who has a general power which enables him, or would if he were sui juris enable him, to dispose of any property other than settled property, or to charge money on any property other than settled property, shall be treated as beneficially entitled to the property or money; and for this purpose “general power” means a power or authority enabling the person by whom it is exercisable to appoint or dispose of property as he thinks fit.
(3) In determining the value of a person's estate at any time his liabilities at that time shall be taken into account, except as otherwise provided by this Act.
(4) The liabilities to be taken into account in determining the value of a transferor's estate immediately after a transfer of value include his liability for capital transfer tax on the value transferred but not his liability (if any) for any other tax or duty resulting from the transfer.
Amendments
Note: In accordance with Finance Act 1986 section 100, for any liability to tax arising on or after 25 July 1986, any reference in the legislation to “capital transfer tax” has effect as a reference to “inheritance tax”.
(5) Except in the case of a liability imposed by law, a liability incurred by a transferor shall be taken into account only to the extent that it was incurred for a consideration in money or money's worth.
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