That, in the case of a person dying after the passing of the Act giving statutory effect to this Resolution, property which was previously subject to an annuity or other periodical payment limited to cease on the death of such deceased person shall, notwithstanding that such annuity or other periodical payment had been surrendered, assured, divested, or otherwise disposed of (whether for value or otherwise) in the lifetime of such deceased person to or for the benefit of the person entitled to such property, be deemed for the purposes of Part I of the Finance Act, 1894, to pass on the death of such deceased person to the extent of the benefit which would accrue from the cesser of such annuity or other periodical payment unless—
(a) such surrender, assurance, divesting, or disposition was bona fide made or effected at least three years before the death of such deceased person, and
(b) such deceased person was not, at any time within three years before his death, in receipt of any substituted annuity or other periodical payment limited to cease on his death and secured (whether by contract or otherwise) to him in return for such surrender, assurance, divesting, or disposition.
This Resolution is designed to meet losses on estate duty which arise in cases such as the following:—A, before his death settled property on B, subject to an annuity payable to C for life. If C continues to enjoy the annuity up to his death there is deemed to be a passing, on the occasion of C's death, of the property needed to provide the annuity, and a claim for estate duty arises accordingly. If, however, C for some reason, for example, on his death-bed, takes legal steps to release the annuity in favour of B, there will be no claim for estate duty when the death occurs. This Resolution is designed to enable a claim for duty to be made in a case in which an annuity is released in the same way as such a claim can at present be made in which life interests are released.