FAMILY PROVISION ACT 1982 - SECT 22 Prescribed transactions

This legislation has been repealed.

FAMILY PROVISION ACT 1982 - SECT 22

22 Prescribed transactions

(1) A person shall be deemed to enter into a prescribed transaction if:

(a) on or after the appointed day the person does, directly or indirectly, or omits to do, any act, as a result of which:

(i) property becomes held by another person (whether or not as trustee), or

(ii) property becomes subject to a trust,

whether or not the property becomes in either case so held immediately, and

(b) full valuable consideration in money or money's worth for the firstmentioned person's doing, or omitting to do, that act is not given.

(2) Except as provided in subsections (5) and (6), a prescribed transaction referred to in subsection (1) shall, for the purposes of this Act, be deemed to take effect at the time property becomes held by a person or subject to a trust as referred to in subsection (1) (a).

(3) The fact that a person has done, or omitted to do, an act as a result of which property became held by another person or subject to a trust shall not prevent a later act or omission by the firstmentioned person (as a result of which the same property becomes held by another person or subject to a trust) constituting a prescribed transaction.

(4) In particular and without limiting the generality of subsection (1), a person shall, for the purposes of subsection (1) (a), be deemed to do, or omit to do, an act, as a result of which property becomes held by another person or subject to a trust if:

(a) the person is entitled, on or after the appointed day, to exercise a power to appoint, or dispose of, property which is not in the person's estate but the power is not exercised before the person ceases (by reason of death or the occurrence of any other event) to be so entitled and, as a result of the omission to exercise the power and of the person's death or the occurrence of the other event:

(i) the property becomes held by another person (whether or not as trustee) or subject to a trust (whether or not the property becomes in either case so held immediately), or

(ii) another person becomes (whether or not immediately) or, if the person was previously entitled, continues to be, entitled to exercise the power,

(b) holding an interest in property which would, on the person's death, become, by survivorship, held by another person (whether or not as trustee) or subject to a trust, the person is entitled, on or after the appointed day, to exercise a power to prevent the person's interest in the property becoming, on the person's death, so held or subject to that trust but the power is not exercised before the person ceases (by reason of death or the occurrence of any other event) to be so entitled,

(c) holding an interest in property in which another interest is held by another person (whether or not as trustee) or is subject to a trust, the person is entitled, on or after the appointed day, to exercise a power to extinguish the other interest in the property but the power is not exercised before the person ceases (by reason of death or the occurrence of any other event) to be so entitled and, as a result of the omission to exercise the power and of the person's death or the occurrence of the other event, the other interest in the property continues to be so held or subject to that trust,

(d) the person is entitled, on or after the appointed day, in relation to a policy of assurance on the person's life under which money is payable in consequence of the person's death or, as the case may require, in consequence of the occurrence of any other event to a person other than the executor or administrator of the person's estate, to exercise a power:

(i) to substitute a person or a trust for the person to whom or trust subject to which money is payable under the policy of assurance, or

(ii) to surrender or otherwise deal with such a policy of assurance on the person's life,

but the power is not exercised before the person ceases (by reason of death or the occurrence of any other event) to be so entitled,

(e) being, on or after the appointed day, a member of, or participant in, a body (corporate or unincorporate), association, scheme, fund or plan, the person dies and, as a result of the person's being such a member or participant and of the person's death or the occurrence of any other event, property becomes held by another person (whether or not as trustee) or subject to a trust (whether or not the property becomes in either case so held immediately), or

(f) on or after the appointed day, the person enters into a contract providing for a disposition of property out of the person's estate (whether the disposition is to take effect before, on or after the person's death and whether in pursuance of the person's will or otherwise).

(5) Except as provided in subsection (6), a prescribed transaction involving the doing of, or omitting to do, an act as referred to in subsection (4) (paragraph (f) excepted) shall be deemed to be entered into immediately before, and to take effect on, the death or the occurrence of the other event referred to in that subsection in relation to that act or omission.

(6) Where:

(a) a prescribed transaction involves any kind of contract, and

(b) valuable consideration, although not full valuable consideration, in money or money's worth is given for the disponer's becoming a party to the contract,

the transaction shall, for the purposes of this Act, be deemed to be entered into and to take effect at the time the contract is entered into.

(7) Notwithstanding subsections (1) and (4), the making by a person of, or the omitting by a person to make, a will is not an act or omission referred to in subsection (1) (a) except in so far as it constitutes a failure to exercise a power of appointment or disposition in relation to property which is not in the person's estate.