Someone, now deceased, has left a "gift of residue" in her will. The recipient died a long time ago, before the deceased person. That gift is now supposed to go under the intestacy rules to someone entirely different. Why is this? Is there an act and section that declares this? This is an English Law question, by the way.
It is an equitable rule that if someone dies, their gift will lapse and then either fall back into residue or pass under the intestacy rules. There is no statute. But as a matter of common sense, if someone has died before the testator and the will speaks from death, at the date of death that person is not in existence so cannot have a beneficial interest in anything. The only exception to this is under s33 Wills Act 1837 which saves lapsed gifts to issue of the testator.