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FINANCE ACT, 1949
Limitations on Relief from Estate Duty Chargeable under Section 31 of Finance Act, 1941.
1. (1) The provisions of subsection (2) of section 25 of the Finance Act, 1940 (No. 14 of 1940) (which provides, amongst other things, for the disallowance of debts the consideration for which was property derived from the deceased) shall, in the manner specified in this paragraph, have effect in relation to the computation of the amount allowed.
(2) Where, if—
(a) the annuity payments had formed the consideration for a debt created by the deceased equal to the total amount of those payments; and
(b) subsection (1) of section 7 of the Finance Act, 1894 (which provides for an allowance for debts in computing the amount on which estate duty is payable) were applied to that debt,
the full amount of that debt would not, having regard to the operation of subsection (2) of the said section 25, have been allowable under subsection (1) of the said section 7, the annuity payments shall, for the purpose of ascertaining the amount allowed, be reduced so as not to exceed the amount, if any, which would have been allowable in the circumstances aforesaid under subsection (1) of the said section 7, but, in applying the said section 25 for the purposes of this paragraph, property which is the subject matter of the disposition shall not be treated as property derived from the deceased.
2. Where, if section 31 of the Finance Act, 1941 , had not been passed and section 3 of the Finance Act, 1894 (which relates, amongst other things, to property which the deceased has parted with before his death for consideration) had been applied to the property which was the subject matter of the disposition, a deduction would have been allowable under subsection (2) of the said section 3 for partial consideration, the amount allowed shall not exceed the amount of that deduction.
3. Where the amount allowed is allowed as a deduction from the value of property liable to a debt or incumbrance created by the deceased, it shall not exceed the amount, if any, which would be allowed under subsection (1) of section 7 of the Finance Act, 1894, if section 31 of the Finance Act, 1941 , had not been passed.