Inheritance Tax Act 1984 Schedule 2 paragraph 7

Conditional exemption and chargeable events for heritage property

Schedule 2, paragraph 7 addresses transitional provisions relating to conditionally exempt transfers of heritage property, ensuring that the inheritance tax rules apply appropriately where exemptions were originally granted under the old capital transfer tax or estate duty regimes.

• Where heritage property (such as works of art, historic buildings or land of outstanding scenic or scientific interest) was conditionally exempt from tax under earlier legislation, the inheritance tax chargeable event rules apply when the conditions of exemption are breached or the property is sold.
• The paragraph ensures continuity between the old capital transfer tax regime and the current inheritance tax regime, so that conditional exemptions already granted are preserved but remain subject to a potential tax charge.
• If the property is disposed of or the undertakings given in return for the exemption are broken, a charge to inheritance tax arises calculated in accordance with the current rules.
• The provisions were amended by the Finance Act 1986 to reflect the rebranding of capital transfer tax as inheritance tax and to update cross-references accordingly.

---