§ 13801.3. Independent Gift and Power of Appointment to Same Person.

(a) Transfers on or After June 25, 1935. Should any person on or after June 25, 1935 (the effective date of the Inheritance Tax Act of 1935), receive both a power of appointment subject to the Inheritance Tax Law (see Revenue and Taxation Code Section 13694) over particular property and an outright bequest or devise of other property from the same transferor, the specific exemption allowable is governed by the following:

(1) General Power of Appointment. If the power is general in nature, or if it is limited in nature but the donee may use or otherwise receive benefit from the property subject to the power, the value of the property subject to the power is aggregated with the value of the property bequeathed or devised, and one exemption is allowed on the whole. This exemption is the one in effect at the date of the transferor's death.

(2) Limited Power of Appointment. If the power is limited in nature, and the donee cannot use or otherwise receive benefit from the property subject to the power, an exemption is allowed on the bequest or devise, but none is allowed on the property subject to the power, unless the exemption allowed on the bequest or devise exceeds the amount of the latter, in which case the surplus will be allowed against the property subject to the power. The exemption applicable is the one in effect at the date of the transferor's death.

(b) Incomplete Inter Vivos Transfer Between July 27, 1917, and June 25, 1935, Plus Power of Appointment on or After June 25, 1935. Should any person receive property pursuant to an incomplete inter vivos transfer (see Section 13304.2), made on or after July 27, 1917 (the effective date of the Inheritance Tax Act of 1917) but prior to June 25, 1935, and on or after the latter date receive from the same transferor a power of appointment subject to the Inheritance Tax Law over other property, the exemption applicable is governed by subsection (a) of this regulation.

(c) Complete Inter Vivos Transfer Between July 27, 1917, and June 25, 1935, Plus Power of Appointment on or After June 25, 1935. Should any person receive property pursuant to a complete inter vivos transfer (see Section 13304.1), made on or after July 27, 1917, but prior to June 25, 1935, and on or after the latter date receive from the same transferor a power of appointment subject to the Inheritance Tax Law over other property, the specific exemption in force at the time of the second transfer being different from that in force at the time of the first:

(1) General Power of Appointment. If the power is general in nature, or if it is limited in nature but the donee may use or otherwise receive benefit from the property subject to the power, the value of the property subject to the power is aggregated with the value of the property transferred inter vivos, and one exemption is allowed on the whole in accordance with Regulations 13801-13804(c)(3).

(2) Limited Power of Appointment. If the power is limited in nature, and the donee cannot use or otherwise receive benefit from the property subject to the power, an exemption is allowed on the property transferred inter vivos, but none of the property subject to the power, unless the exemption allowed on the property transferred inter vivos exceeds the amount of the latter, in which case the surplus will be allowed against the property subject to the power. The exemption applicable is the one in effect at the date of the transfer inter vivos.

Note

Note: As to the computation of tax where the same person is given a power of appointment together with an outright gift of other property, see Section 13408.1.

Note: Reference: Section 13801, Revenue and Taxation Code.