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| Finance (No. 2) Bill [Lords], As Amended
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| Mr Chancellor of the Exchequer |
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| | To move, That the Finance (No.2) Bill, as amended, be considered in the following |
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| | order, namely, new Clauses relating to Part 6, new Schedules relating to Part 6, |
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| | amendments relating to Clauses 155 and 156, Schedule 20, Clause 157, remaining new |
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| | Clauses, remaining new Schedules, amendments relating to Clauses 1 to 27, Schedule 1, |
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| | Clause 28, Schedule 2, Clause 29, Schedule 3, Clauses 30 to 37, Schedule 4, Clauses 38 |
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| | to 42, Schedule 5, Clauses 43 to 76, Schedule 6, Clauses 77 to 79, Schedule 7, Clauses 80 |
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| | and 81, Schedules 8 and 9, Clause 82, Schedule 10, Clauses 83 to 86, Schedule 11, |
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| | Clauses 87 and 88, Schedule 12, Clause 89, Schedule 13, Clauses 90 and 91, Schedule 14, |
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| | Clauses 92 to 102, Schedule 15, Clauses 103 and 104, Schedule 16, Clauses 105 to 134, |
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| | Schedule 17, Clauses 135 to 146, Schedule 18, Clauses 147 to 154, Schedule 19, Clause |
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| | 158, Schedule 21, Clauses 159 and 160, Schedule 22, Clause 161, Schedule 23, Clauses |
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| | 162 and 163, Schedule 24, Clause 164, Schedule 25, Clauses 165 to 178, Schedule 26, and |
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| NEW CLAUSES RELATING TO PART 6 |
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| | Trusts relating to divorce, life protection policies and disabled persons |
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| | Negatived on division NC2 |
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| To move the following Clause:— |
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| | ‘The provisions of Schedule 20 shall not operate so as to discourage, impede or |
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| | prevent the use of trusts which are set up— |
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| | (a) | as a result of relationship breakdown and create a “relationship |
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| | breakdown settlement interest”, as defined in section 59A of the |
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| | Inheritance Tax Act 1984; or |
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| | (b) | in relation to the proceeds of life protection policies, as defined in section |
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| | 58(4) of the Inheritance Tax Act 1984; or |
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| | (c) | by or in favour of disabled persons within the definition set out in section |
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| | 89 of the Inheritance Tax Act 1984.’. |
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| | Information relating to section 157 and Schedule 20 |
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| To move the following Clause:— |
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| | ‘The Chancellor of the Exchequer shall provide the House with the information |
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| | relating to section 157 of and Schedule 20 to this Act requested by the Treasury |
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| | Committee in its Report on the 2006 Budget at page 56 paragraph 109.’. |
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| Page 377, line 21 [Schedule 20], after ‘minor’, insert ‘(whether by exercise of |
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| trustees’ powers under such a will or otherwise).’. |
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| Page 380, line 30 [Schedule 20], at end insert— |
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| | (a) | section 71 above applied to settled property immediately before 22nd |
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| | (b) | on or after that date a beneficiary (within the meaning of section 71 |
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| | above) (“B”) became entitled to an interest in possession in that settled |
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| | (c) | before that interest in possession had come to an end and while B was |
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| | under the age of 25 and before [6th April 2008] that settled property |
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| | became held for the benefit of B on trusts such as are mentioned in |
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| | subsection (3)(b)(i) above, |
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| | | subsections (3) and (4) above shall apply as though the settled property had |
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| | become held on the trusts referred to in paragraph (c) above immediately at the |
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| | time B in fact became entitled to the interest in possession referred to in paragraph |
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| Mr Chancellor of the Exchequer |
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| Page 384, line 38 [Schedule 20], at end insert— |
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| | ‘(2) | For the purposes of sections 71A to 71G above, a deceased individual |
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| | (“D”) shall be taken to have been a parent of another individual (“Y”) |
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| | if, immediately before D died, D had— |
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| | (a) | parental responsibility for Y under the law of England and |
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| | (b) | parental responsibilities in relation to Y under the law of |
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| | (c) | parental responsibility for Y under the law of Northern |
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| | (3) | In subsection (2)(a) above “parental responsibility” has the same |
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| | meaning as in the Children Act 1989. |
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| | (4) | In subsection (2)(b) above “parental responsibilities” has the meaning |
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| | given by section 1(3) of the Children (Scotland) Act 1995. |
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| | (5) | In subsection (2)(c) above “parental responsibility” has the same |
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| | meaning as in the Children (Northern Ireland) Order 1995.”.’. |
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| Page 386, line 3 [Schedule 20], after ‘interest’, insert ‘, or |
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| | (d) | a relationship breakdown settlement interest.’. |
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| Mr Chancellor of the Exchequer |
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| Page 386, line 29 [Schedule 20], leave out ‘(“B”)’. |
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| Mr Chancellor of the Exchequer |
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| Page 386, line 30 [Schedule 20], leave out ‘(“the current interest”)’. |
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| Mr Chancellor of the Exchequer |
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| Page 386, line 33 [Schedule 20], leave out ‘the following conditions are met’ and |
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| insert ‘section 49BA or 49BB below so provides’. |
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| Mr Chancellor of the Exchequer |
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| Page 386, line 34 [Schedule 20], at end insert— |
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| | ‘49BA | Transitional serial interest: interest to which person becomes |
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| | entitled during period 22nd March 2006 to 5th April 2008 |
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| | (1) | Where a person (“B”) is beneficially entitled to an interest in |
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| | possession in settled property (“the current interest”), that interest is a |
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| | transitional serial interest for the purposes of this Chapter if the |
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| | following conditions are met.’. |
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| Page 386, line 42 [Schedule 20], after ‘but’, insert ‘(unless B was the spouse or |
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| civil partner of the person entitled to the prior interest)’. |
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| Mr Chancellor of the Exchequer |
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| Page 387, line 6 [Schedule 20], at end insert— |
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| | ‘49BB | Transitional serial interest: interest to which person becomes |
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| | entitled on death of spouse or civil partner on or after 6th April 2008 |
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| | (1) | Where a person (“E”) is beneficially entitled to an interest in |
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| | possession in settled property (“the successor interest”), that interest is |
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| | a transitional serial interest for the purposes of this Chapter if the |
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| | following conditions are met. |
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| | (a) | the settlement commenced before 22nd March 2006, and |
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| | (b) | immediately before 22nd March 2006, the property then |
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| | comprised in the settlement was property in which a person |
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| | other than E was beneficially entitled to an interest in |
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| | possession (“the previous interest”). |
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| | (3) | Condition 2 is that the previous interest came to an end on or after 6th |
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| | April 2008 on the death of that other person (“F”). |
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| | (4) | Condition 3 is that, immediately before F died, F was the spouse or |
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| | (5) | Condition 4 is that E became beneficially entitled to the successor |
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| | (a) | section 71A below does not apply to the property in which the |
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| | successor interest subsists, and |
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| | (b) | the successor interest is not a disabled person’s interest.’. |
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| Mr Chancellor of the Exchequer |
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| Page 387, line 47 [Schedule 20], leave out ‘49B(1)(a)’ and insert ‘49BA’. |
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| Mr Chancellor of the Exchequer |
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| Page 388, line 4 [Schedule 20], leave out ‘49B(1)(a)’ and insert ‘49BA’. |
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| Page 388, line 18 [Schedule 20], at beginning insert— |
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| | ‘6 (1) | In section 89 (trusts for disabled persons)— |
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| | (a) | in subsection (4)(a) at end insert— |
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| | “(aa) | a person who lacked capacity within the meaning of |
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| | (b) | in subsection (4)(c), leave out “or middle” and insert “middle or |
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| | (c) | after subsection (4)(c) at end insert— |
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| | “(d) | a person who satisfies the Commissioners for Her |
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| | Majesty’s Revenue and Customs that he had a |
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| | condition that it was at that time reasonable to expect |
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| | would have such effects on him as to lead to him |
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| | (i) | falling within subsection (4)(a) or (aa) above, |
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| | (ii) | in receipt of an attendance allowance |
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| | mentioned in subsection (4)(b) above, or |
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| | (iii) | in receipt of a disability living allowance |
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| | mentioned in subsection (4)(c) above.”.’. |
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| Page 388, line 29 [Schedule 20], after ‘89(4)(a)’, insert ‘or (aa)’. |
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| Page 388, line 34 [Schedule 20], leave out ‘or middle’ and insert ‘, middle or |
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| Mr Chancellor of the Exchequer |
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| Page 389, line 36 [Schedule 20], leave out from ‘person’ to ‘on’ in line 37 and |
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| insert ‘becomes beneficially entitled’. |
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| Page 390, line 26 [Schedule 20], leave out ‘or middle’ and insert ‘, middle or |
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| Page 390, line 46 [Schedule 20], leave out ‘or middle’ and insert ‘, middle or |
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| Page 391, line 2 [Schedule 20], at end insert— |
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| | ‘(7) | The reference in subsection (1) above to a disabled person includes, in relation to |
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| | any settled property, a reference to a person who satisfied Her Majesty’s Revenue |
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| | and Customs that he would, when the property was transferred into settlement, |
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| | have been entitled to an attendance allowance or disability living allowance, by |
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| | virtue of entitlement to the care component at the highest, middle or lower rate, |
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| | whether or not such an allowance was actually claimed.’. |
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| Mr Chancellor of the Exchequer |
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| Page 392, line 10 [Schedule 20], leave out ‘or 89A’. |
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| Page 393, line 9 [Schedule 20], at end insert ‘, and |
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| | (iv) | not a relationship breakdown settlement interest.”’. |
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| Page 393, line 9 [Schedule 20], after ‘interest’, insert— |
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| | ‘10A (1) | Section 10 of IHTA 1984 is amended as follows. |
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| | (2) | In subsection (1)(b) after “with each other”, insert “, or |
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| | (c) | it is made in accordance with or pursuant to a court order in |
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| | proceedings for the following types of provision— |
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| | (i) | financial relief for the parties to a marriage and any |
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| | children of the family in connection with proceedings |
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| | for divorce, nullity of marriage or judicial separation |
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| | including, but not limited to, property adjustment |
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| | orders or variation of settlement orders under section |
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| | 24 of the Matrimonial Causes Act 1973 or orders |
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| | under section 8 of the Family Law (Scotland) Act |
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| | 1985 and any successive legislation; or |
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| | (ii) | financial relief for the parties of a civil partnership in |
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| | connection with proceedings for dissolution of the |
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| | civil partnership including, but not limited to, |
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| | property adjustment orders or variation of settlement |
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| | orders under Schedule 5 of the Civil Partnership Act |
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| | 2004 and any successive legislation; or |
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| | (iii) | where a marriage has been dissolved or annulled or |
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| | the parties to a marriage have been legally separated, |
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| | by means of judicial or other proceedings in an |
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| | overseas country and the divorce, annulment or legal |
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