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The definitions of the disposal and contribution conditions refer to proceeds on disposal 'directly or indirectly' applied¹, or consideration 'directly or indirectly' provided. 'Indirectly' equates any proceeds or contribution invested in acquiring intermediate property with the eventual proceeds on disposal of that property. Replaced property may be any kind of property; for example, a charge under the POAT rules relating to the occupation of land is not precluded where the land in question replaced other property such as chattels or intangible property.

Example 1

Mrs E gifted shares to her goddaughter, who sold them and invested the proceeds in a flat (the relevant land) in which Mrs E now lives. Subject to possible exclusions and exemptions (see I3.734–I3.739A) the disposal condition is met and Mrs E may face a POAT charge. It is clear that the proceeds on disposal of the 'other property' that Mrs E owned (ie the shares) were applied directly in acquiring the relevant land.

Example 2

In 2015 Miss F bought a new Bentley and disposed of