What does paragraph 4 of Schedule 8 to the Inheritance Tax Act 1984 do?

Paragraph 4 of Schedule 8 amends section 49(4) of the Finance Act 1975 by inserting a cross-reference to section 18 of the Capital Transfer Tax Act 1984 (now the Inheritance Tax Act 1984). This ensures the spouse exemption provisions under the 1984 Act are properly recognised within the framework of the earlier 1975 Act.

Why was the amendment to section 49(4) of the Finance Act 1975 necessary?

When the Capital Transfer Tax Act 1984 was enacted, earlier legislation needed updating so that cross-references remained accurate. Section 49(4) originally referred only to the spouse exemption in Schedule 6 to the 1975 Act. The amendment added the updated spouse exemption rules in section 18 of the 1984 Act to ensure consistent treatment.

Is paragraph 4 of Schedule 8 to the Inheritance Tax Act 1984 still in force?

This provision was subsequently affected by repeals made under the Finance Act 1985, specifically section 93 and Schedule 27 Part X. Practitioners should check the current status of these provisions before relying on them, as the repeals may have rendered the amendment spent or superseded.

How does the spouse exemption under section 18 interact with section 49(4) of the Finance Act 1975?

After the amendment, where a transfer between spouses qualified for exemption under section 18 of the Capital Transfer Tax Act 1984, that exemption would be properly recognised for the purposes of section 49(4) of the Finance Act 1975. This ensured consistent treatment of spouse exemptions across both pieces of United Kingdom legislation.

Inheritance Tax Act 1984 Schedule 8 paragraph 4

Amendment to the Finance Act 1975

Paragraph 4 of Schedule 8 amends section 49(4) of the Finance Act 1975 to add a cross-reference to section 18 of the Capital Transfer Tax Act 1984 (now the Inheritance Tax Act 1984), ensuring that the spouse exemption provisions are properly linked across the two pieces of legislation.

This paragraph makes a consequential amendment to section 49(4) of the Finance Act 1975.
It inserts a reference to section 18 of the Capital Transfer Tax Act 1984 (the spouse exemption) alongside the existing reference to paragraph 1 of Schedule 6 to the 1975 Act.
The purpose is to ensure that the spouse exemption under the 1984 Act is recognised within the framework of the 1975 Act.
This provision was subsequently affected by repeals made by the Finance Act 1985, section 93 and Schedule 27 Part X.

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