This section deems a chain of dispositions within a three-year period before and after a gift to be taken from the original disponer. Where a donee who takes a gift makes a further disposition within the period commencing three years before and ending three years after the date of that gift, and subsequent donees similarly take gifts, each donee is treated as taking from the original disponer rather than from the immediate disponer; such a deemed gift is treated as an inheritance (not a gift) where the original disponer dies within two years of the original disposition and the disposition date is on or after 1 April 1975.

The section does not apply to any first-mentioned disposition to the extent that no other disposition connected as described in subsection (1) was made with a view to enabling or facilitating that first-mentioned disposition or the recoupment in any manner of its cost.