1959-HKRS29-8-26_Part01 — Page 22

2 & 3 Eliz

2, c. 44,

6. 2903).

03) & (4).

40

(ii) any voting rights exercisable by virtue of any preferences shares in the company, being voting rights which the Commissioner is satisfied do not materially affect the effective control of the company's affairs.

(7) The cases referred 10 in subsection (5) as being dealt with in this subsection are as follows-

(a) if during a continuous period of two years falling wholly within the three years ending with his death, the deceased had powers equivalent to control of the company; or

(b) if during any such period as aforesaid the divi- dends declared by the company and the interest accruing due on debentures of the company as defined in sub-paragraph (ii) of paragraph (c) are, as to amounts forming in the aggregate more than one half of the total amount of the dividends and interest, to be treated by virtue of sections 33 and 34 as benefits accruing to the deceased from the company, or would have fallen to be so treated if the deceased had made a transfer of property to the company; or

(c) if at any time during the three years ending with the death of the deceased, not being a time when some other person had control or powers equi- valent to control of the company, the deceased had a beneficial interest in possession in shares in or debentures of the company, or in both, of an aggregate nominal amount representing one half or more of the aggregate nominal amount of the shares in and debentures of the company then outstanding, but for this purpose-

() at any time when both the deceased and another person had such an interest in the same share or debenture, the deceased's interest in it shall be treated as extending only to the same fraction of it as that interest would have been deemed for purposes of estate duty to extend to if the share or deben- ture bud passsed on his death at that time; and

(i) the expression "debenture" shall not include an obligation of the company in respect of a debt incurred by it for money borrowed by way of temporary loan, if the loan was not

Quick succession relief.

1 & 3 EIZ. 3, c. 44,

* 3004).

2 4 3 Bliz *.. 44,

4. 31(5),

2 & 3 Eliz. 2, c. 44,

1. 3005).

41

one of a series of temporary loans by the same person and either was repaid within two years of being made or was made less than two years before the deceased's death. (8) Where any shares or debentures which fall to be valued in accordance with this section have also fallen to be so valued on a previous death within five years, then for the purposes of section 28 those shares and debentures shall, in relation to those deaths, be treated in the same way as an interest in land or in a business not carried on by a company, if on both deaths their value is wholly or partly attributable to the value of land of the company or any subsidiary of it or to the value of assets used by the company or any subsidiary of it in a business not consisting mainly in the holding of or dealing in investments other than land:

Provided that the amount on which the reduction under the said section 28 is to be calculated shall be limited, where necessary, to the duty on the part so attributable of the value, on which duty is payable, of the shares or debentures, and references to that part of the value shall, in the proviso to the said section 28, be substituted for the references to the whole value, whether in relation to the first or the second death.

(9) In determining for the purposes of subsection (8) what part of the value of any shares in or debentures of a company is attributable to the value of particular assets,-

(a) the value of the shares or debentures shall be apportioned in proportion to the net value of the company's assets after allowing for liabilities other than liabilities in respect of shares in or debentures of the company; and

(b) the value apportioned under this subsection to the value of any shares in or debentures of another company, being a subsidiary either of the first-mentioned company or of a company of which that company is a subsidiary, shall, where material, be similarly apportioned between the other company's assets.

(10) Where a company alters its share capital by sub- dividing any shares into shares of smaller amount, or by consolidating and dividing any shares into shares of larger amount, subsection (8) shall apply to shares derived by those means from shares of the same class which have fallen to be valued in accordance with this section on a