(a) In this section, "life interest", in relation to a settlement -
(i) includes a right under the settlement to the income of, or the use or occupation of, settled property for the life of a person (or for the lives of persons) other than the person entitled to the right,
(ii) does not include any right which is contingent on the exercise of the discretion of the trustee or the discretion of some other person, and
(iii) does not include an annuity, notwithstanding that the annuity is payable out of or charged on settled property or the income of settled property except where some or all of the settled property is appropriated by the trustees as a fund out of which the annuity is payable and there is no right of recourse to settled property not so appropriated, or to the income of settled property not so appropriated.
(b) Without prejudice to subsection (4)(b), where under paragraph (a) (iii) an annuity is to be treated as a life interest in relation to a settlement, the settled pr
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