Wealth Tax Act , 1975

1 Interpretation.

1.—(1) In this Act save where the context otherwise requires—

“accountable person” means a person who is accountable for the payment of tax by virtue of section 14;

“assessable person” means an individual, discretionary trust or private non-trading company;

“child” includes—

(a) a stepchild;

(b) a child adopted—

(i) under the Adoption Acts, 1952 to 1974; or

(ii) under an adoption law, other than the Adoption Acts, 1952 to 1974, being an adoption that has, in the place where the law applies, substantially the same effect in relation to property rights (including the law of succession) as an adoption under the Adoption Acts, 1952 to 1974, has in the State in relation to such rights;

and such child shall be deemed to be the child of the adopter or adopters born to him or them in lawful wedlock and not to be the child of any other person;

“the Commissioners” means the Revenue Commissioners;

“discretionary trust” means any disposition whereby, or by virtue or in consequence of which, property is held on trust to apply, or with a power to apply, the income or capital or part of the income or capital of the property for the benefit of any person or persons or of any one or more of a number or of a class of persons whether at the discretion of trustees or any other person and notwithstanding that there may be a power to accumulate all or any part of the income and for the purposes of this definition “disposition” includes any disposition whether by deed or will and any covenant, agreement or arrangement whether effected with or without writing;

“entitled in possession” means having a present right to the enjoyment of property as opposed to having a future such right, and without prejudice to the generality of the foregoing, a person shall also, for the purposes of this Act, be deemed to be entitled in possession to—

(a) property comprised in an instrument which he may revoke, and

(b) an interest or share in a partnership, joint tenancy or estate of a deceased person, in which he is a partner, joint tenant or beneficiary as the case may be,

but he shall not be deemed to be entitled in possession to an interest in expectancy until an event happens whereby this interest ceases to be an interest in expectancy and for the purposes of this definition “interest in expectancy” includes an estate in remainder or reversion but does not include—

(i) a remainder expectant on the determination of a lease.

(ii) a reversion expectant on the determination of a limited interest created by the person;

“limited interest” shall be construed in accordance with section 3 (5) (b);

“the market value”, in relation to property, means the market value thereof ascertained in accordance with section 8 or 9 as the case may be;

“minor child” means a child who has not attained the age of 21 years on the relevant valuation date and who has not married on or before that date;

“the net market value”, in relation to any property, means the net market value thereof ascertained in accordance with section 10 or 11, as the case may be;

“ordinarily resident” has the same meaning as in the Income Tax Acts and an individual who has been ordinarily resident in the State for a year ending on a valuation date shall be deemed to be ordinarily resident in the State on that valuation date;

“personal property” means any property other than real property;

“personal representative” means the executor or administrator for the time being of a deceased person and includes any person who takes possession of or intermeddles with the property of a deceased person, and also includes any person having in relation to the deceased under the law of another country any functions corresponding to the functions for administration purposes under the law of the State of an executor or administrator;

“private non-trading company” has the meaning assigned to it by section 6 (3);

“property” includes interests and rights of any description;

“real property” means real and chattel real property and includes real and chattel real property that is impressed with a trust for sale and to which an individual or other assessable person whose property situate outside the State is not liable to tax is beneficially entitled in possession;

“tax” means wealth tax chargeable by virtue of this Act;

“valuation date”, in relation to any year, means the 5th day of April in that year.

(2) For the purposes of this Act, a husband and wife shall be treated as living with each other, on a valuation date, unless on that date—

(a) they are separated under an order of a court of competent jurisdiction or by deed of separation, or

(b) they are in fact separated in such circumstances that the separation is likely to be permanent.

(3) In this Act—

(a) a reference to a section is to a section of this Act unless it is indicated that a reference to some other enactment is intended;

(b) a reference to a subsection, paragraph or subparagraph is to the subsection, paragraph or subparagraph of the provision in which the reference occurs unless it is indicated that reference to some other provision is intended;

(c) a reference to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment, including this Act.

2 Charge of wealth tax.

2.—Subject to the provisions of this Act and any regulations thereunder, with effect on and from the 5th day of April, 1975, a tax, to be called wealth tax, shall be charged, levied and paid annually upon the net market value of the taxable wealth on the valuation date in every year of every assessable person and the rate of tax shall be one per cent. of that net market value.

3 Taxable wealth of individual.

3.—(1) Subject to the provisions of this Act, the taxable wealth of an individual who is domiciled and ordinarily resident in the State on the valuation date shall comprise all the property, wheresoever situate, to which he is beneficially entitled in possession on that date.

(2) Subject to the provisions of this Act, the taxable wealth of an individual other than an individual who is domiciled and ordinarily resident in the State on the valuation date shall comprise only the property situate in the State to which he is beneficially entitled in possession on that date.

(3) Where the property to which an individual is beneficially entitled in possession includes an interest which is a limited interest, the whole or the appropriate part of the property in which the limited interest subsists or on which it is charged or secured or on which the individual is entitled to have it so charged or secured shall be property to which the individual is beneficially entitled in possession; and, if the limited interest of an individual who is domiciled and ordinarily resident in the State is an annuity or other periodic payment which is not charged or secured on any property, such sum, as would, if invested on the valuation date in the security of the Government which was issued last before that date for subscription in the State and is redeemable not less than 10 years after the date of issue, yield, on the basis of the current yield on the security, an annual income equivalent to the amount of the annuity or of the other periodic payment received in the twelve months prior to the valuation date shall be taxable wealth of the individual:

Provided that in the case of a purchased annuity, the annuitant shall have the option—

(a) of having treated for the purposes of this subsection as an annuity which is not charged or secured on any property so much of the purchased annuity as is regarded as income for the purposes of the Income Tax Acts, and

(b) in addition, of having treated as part of his taxable wealth the proportion of the consideration for the purchase of the annuity which is equal to the proportion which the balance of the purchased annuity (after deducting so much thereof as is referred to in paragraph (a)) bears to the entire annuity.

(4) For the purposes of this Act, where the property to which an individual is beneficially entitled in possession includes a reversion expectant on the determination of a limited interest, the individual shall himself be deemed to be entitled in possession to that limited interest and the provisions of this section shall apply accordingly.

(5) For the purposes of this Act—

(a) (i) an individual who is not domiciled in the State on a valuation date and who has resided in the State fornot less than—

(I) 183 days in the year ending on that date, and

(II) 183 days in each of six or more of the nine years immediately prior to that year,

shall be deemed to be domiciled and ordinarily resident in the State on that valuation date;

(ii) an individual who was domiciled and ordinarily resident in the State on a valuation date shall, notwithstanding that he ceased to be domiciled in the State after that date, be deemed to be domiciled in the State on the three valuation dates next following that valuation date:

Provided that this subparagraph shall not apply to an individual to whom subparagraph (i) applies.

(b) an individual shall be deemed to be entitled to an interest which is a limited interest in any case where—

(i) the income, or part of the income, if any, or an annuity or other periodic payment out of the income of property to which he is not absolutely entitled, or

(ii) an annuity or other periodic payment which is not charged or secured on any property,

must, during any period of time (including a period determinable by reference to a death) which commences before or on and ends on or after the relevant valuation date (whether or not that date is included in the period), be paid to him or applied for his benefit and, for the purposes of subparagraph (i) of this paragraph, property to which a person is beneficially entitled in possession but to which he is not absolutely entitled shall be deemed to produce income and the income shall be deemed to be payable to him or applicable for his benefit and “limited interest” shall be construed accordingly.

(c) “the appropriate part”, in relation to property referred to in subsection (3), means that part of the property which bears the same proportion to the entire property as the gross income of the limited interest firstly referred to in subsection (3) bears to the gross income of the entire property, and the property to which the individual is beneficially entitled in possession shall be deemed to include the appropriate part of each and every item of property comprised in the entire property.

4 Aggregation of taxable wealth of certain individuals.

4.—(1) For the purposes of this Act, the property to which an individual is beneficially entitled in possession on a valuation date shall also include all the property to which—

(a) the wife of the individual, if she is living with him on the valuation date, and

(b) the minor children, if any, of the individual,

is or are beneficially entitled in possession on the valuation date:

Provided that where, on a valuation date, a wife is not living with her husband, or either of them is dead, the property to which either of them or the survivor is entitled in possession shall include the property to which a minor child of those parents is beneficially entitled in possession if, but only if, that parent has custody of the child on that date.

(2) Where property of another person is included in the taxable wealth of an individual by virtue of subsection (1), the Commissioners shall, on application being made by or on behalf of that individual or other person, apportion the amount of tax assessed on the individual between the individual and that other person and the amount of tax referable to that other person shall be the amount of tax which bears the same proportion to the total amount of tax of the individual as the net market value of that person's taxable wealth bears to the net market value of the taxable wealth of the individual:

Provided that the individual shall remain primarily accountable under section 14 for the payment of tax on the taxable wealth aggregated under this section notwithstanding any apportionment made under this subsection.

5 Taxable wealth of discretionary trust.

5.—(1) (a) The taxable wealth of a discretionary trust on a valuation date shall include all the property situate in the State which is comprised in the trust on the valuation date.

(b) The taxable wealth of a discretionary trust on a valuation date shall also include any property situate outside the State which is comprised inthe trust on the valuation date in any case where—

(i) the settlor is living and is domiciled and ordinarily resident in the State on that date,

(ii) the settlor was domiciled and ordinarily resident in the State when the trust was established,

(iii) if the trust was created by will, the settlor was domiciled in the State at the date of his death, or

(iv) the principal objects under the trust are domiciled and ordinarily resident in the State on that valuation date.

(c) Where none of the subparagraphs in paragraph (b) applies, the taxable wealth of a discretionary trust shall (in addition to all the property situate in the State which is comprised in the trust on the valuation date) include only that proportion (if any) of the property situate outside the State that is comprised in the trust on the valuation date that equals the proportion that the number of principal objects under the trust who are domiciled and ordinarily resident in the State bears to the total number of principal objects under the trust.

(2) Where, however, the sole objects under a discretionary trust are a child or children of a marriage either with his or their parent or parents or without his or their parents (or the survivors or survivor of such persons), and a minor child, being one of those children, is living on the relevant valuation date, the property comprised in the trust, shall—

(a) if the valuation date occurs during the joint lives of the parties to the marriage, be deemed to be property to which the husband is beneficially entitled in possession:

Provided that, if it occurs when the husband and wife are not living with each other and the husband is not an object of the trust, the property comprised in the trust shall be deemed to be property to which the wife is beneficially entitled in possession,

(b) if the valuation date occurs during the lifetime of the surviving party to the marriage, be deemed to be property to which that party is beneficially entitled in possession, and

(c) if the valuation date occurs when neither party to the marriage is an object of the trust or after the death of the surviving party to the marriage, be deemed to be property to which the minor children of the marriage are beneficially entitled in possession in equal shares or property to which the sole minor child of the marriage, if only one such child is living, is beneficially entitled in possession,

and section 3 shall, in lieu of subsection (1), apply to such property.

(3) Where it is shown to the satisfaction of the Commissioners that a discretionary trust exists on a valuation date for the exclusive benefit of—

(a) one or both parties to a marriage, or

(b) one or more named individuals, for the reason that such individual, or all such individuals, is or are, because of age, incapacity or improvidence, incapable of managing his or their affairs, or for any other analogous reason which, in the opinion of the Commissioners, is sufficient to justify the benefits conferred by this subsection,

and that no other person benefited from that trust, the property comprised in the trust on that valuation date shall be deemed to be property to which the party or individual aforesaid is beneficially entitled in possession, or, if there is more than one, to which those parties or individuals are beneficially entitled in possession in equal shares and section 3 shall, in lieu of subsection (1), apply to such property.

(4) In this section—

“object”, in relation to a discretionary trust, means a person for whose benefit the income or capital, or any part of the income or capital, of the trust property is applied, or may, at any time, be applied;

“principal objects”, in relation to a discretionary trust, means such objects of the trust as are living on the relevant valuation date and are related in the same degree of consanguinity to the settlor (being a degree of consanguinity to the settlor nearer than that of any other objects of the trust living on that date) and, if there are no objects of the trust on that date who are so related to the settlor, means all the objects of the trust living on that date, and—

(a) where a body of persons is the object or among the objects of the trust, the members of such body of persons shall be deemed to be objects of the trust, and

(b) for the purposes of this definition—

(i) the spouse of the settlor shall be deemed to be of the same degree of consanguinity to the settlor as the children of the settlor and the spouse of a person shall be deemed to be of the same degree of consanguinity to the settlor as the person,

(ii) “body of persons” means any body politic, corporate or collegiate and any company, partnership, fraternity, fellowship and society of persons, whether corporate or not corporate;

“settlor”, in relation to a discretionary trust, includes a person by whom property comprised in the trust was provided and a person shall be deemed to have provided the property comprised in the trust if he has provided it directly or indirectly and in particular (but without prejudice to the generality of the foregoing) if he has provided or undertaken to provide property directly or indirectly for the purposes of the trust, or has made with any other person a reciprocal arrangement for that person to provide property for the purposes of the trust and, in any case where there is more than one settlor, each shall be deemed to be a settlor to the extent that he has so provided the property comprised in the trust and a trust shall be deemed to be established as and when and to the extent that property is so provided by a settlor.

(5) For the purposes of this section, section 3 (3) and paragraphs (b) and (c) of section 3 (5) shall apply with any necessary modifications in relation to property comprised in a discretionary trust which includes an interest which is a limited interest as they apply in relation to property to which an individual is beneficially entitled in possession and which includes an interest which is a limited interest.

6 Taxable wealth of private non-trading company.

6.—(1) (a) The taxable wealth of a private non-trading company on a valuation date shall include all the property situate in the State to which the company is beneficially entitled in possession on the valuation date.