(1) Section 143 of the Finance Act, 1994, is amended -

(a) in subsection (1) -

(i) by the insertion of the following definition after the definition of "relevant inheritance":

"'settled relevant inheritance' means a relevant inheritance taken on the death of a life tenant;",

(ii) by the substitution of the following definition for the definition of "the relevant period":

"'relevant period' means -

(a) in relation to an earlier relevant inheritance, the period of 5 years commencing on the date of death of the disponer,

(b) in relation to a settled relevant inheritance, the period of 5 years commencing on the date of death of the life tenant concerned, and

(c) in relation to a later relevant inheritance, the period of 5 years commencing on the latest date on which a later relevant inheritance was deemed to be taken from the disponer;",

and

(b) in subsection (2) by the substitution of the following for the proviso to subsection (2):