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Where a person deliberately omits to exercise a right and, as a result of that omission, the value of his estate is diminished and either the estate of another person is increased, or the value of settled property (not subject to an interest in possession) is increased, the omission is treated as though it were a disposition¹. See Division I5.3 for further information on relevant property settlements.

Although this rule requires there to be an increase in the value of the estate of another person or of settled property with no interest in possession², the tax is still charged by reference to the loss of value to the person omitting to exercise the right. Neither the person omitting to exercise the right nor the person whose estate is increased has to be an individual — see the discussion of person in I3.113.

The right may be either connected with property or purely contractual. It does not include rights which are primarily of a personal or non-pecuniary nature, where the