Capital Acquisitions Tax Act , 1976

PART I Preliminary

1 Short title.

1.—This Act may be cited as the Capital Acquisitions Tax Act, 1976.

2 Interpretation.

2.—(1) In this Act, unless the context otherwise requires—

“absolute interest”, in relation to property, includes the interest of a person who has a general power of appointment over the property;

“accountable person” means a person who is accountable for the payment of tax by virtue of section 35;

“benefit” includes any estate, interest, income or right;

“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;

“Commissioners” means the Revenue Commissioners;

“date of the disposition” means—

(a) in the case of a will, the date of the testator's death;

(b) in the case of an intestacy or a partial intestacy, the date of death of the intestate;

(c) in the case of a benefit under Part IX or section 56 of the Succession Act, 1965, the date of death of the relevant testator or other deceased person, and correspondingly in the case of an analogous benefit under the law of another territory;

(d) in the case of a disposition which consists of the failure to exercise a right or a power, the date of the latest time when the disponer could have exercised the right or the power if he were sui juris and not under any physical disability; and

(e) in any other case, the date on which the act (or where more than one act is involved, the last act) of the disponer was done by which he provided or bound himself to provide the property comprised in the disposition;

“date of the gift” means the date of the happening of the event upon which the donee, or any person in right of the donee or on his behalf, becomes beneficially entitled in possession to the benefit, and a reference to the time when a gift is taken shall be construed as a reference to the date of the gift;

“date of the inheritance” means—

(a) in the case where the successor or any person in right of the successor or on his behalf becomes entitled in possession to the benefit on the happening of any such event as is referred to in section 3 (2), the date of the event;

(b) in the case of a gift which becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within two years prior to the death of the disponer, the date which would have been the date of the gift if the entitlement were a gift; and

(c) in any other case, the date of the latest death which had to occur for the successor, or any person in right of the successor or on his behalf, to become beneficially entitled in possession to the benefit,

and a reference to the time when an inheritance is taken shall be construed as a reference to the date of the inheritance;

“discretionary trust” means any trust 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;

“disponer”, in relation to a disposition, means the person who, for the purpose of the disposition, directly or indirectly provided the property comprised in the disposition, and in any case where more than one person provided the property each shall be deemed to be the disponer to the extent that he so provided the property; and for the purposes of this definition—

(a) the testator shall be the disponer in the case of a disposition referred to in paragraph (k) of the definition of “disposition”;

(b) the intestate shall be the disponer in the case of a disposition referred to in paragraph (l) of that definition;

(c) the deceased person referred to in paragraph (m) of that definition shall be the disponer in the case of a disposition referred to in that paragraph; and

(d) a person who has made with any other person a reciprocal arrangement by which that other person provided property comprised in the disposition shall be deemed to have provided that property;

“disposition” includes—

(a) any act or omission by a person as a result of which the value of his estate immediately after such act or omission is less than it would be but for such act or omission;

(b) any trust, covenant, agreement or arrangement, whether made by a single operation or by associated operations;

(c) the creation of a debt or other right enforceable against the disponer personally or against any estate or interest he may have in property;

(d) the payment of money;

(e) the allotment of shares in a company;

(f) the grant or the creation of any benefit;

(g) the grant or the creation of any lease, mortgage, charge, licence, option, power, partnership or joint tenancy or other estate or interest in or over any property;

(h) the release, forfeiture, surrender or abandonment of any debt or benefit, or the failure to exercise a right; and, for the purpose of this paragraph, a debt or benefit shall be deemed to have been released when it has become unenforceable by action through lapse of time (save to the extent that it is recovered subsequent to its becoming so unenforceable);

(i) the exercise of a general power of appointment in favour of any person other than the holder of the power;

(j) a donatio mortis causa;

(k) a will or other testamentary disposition;

(l) an intestacy, whether total or partial;

(m) the payment of a share as a legal right under Part IX of the Succession Act, 1965, to a deceased person's spouse, or the making of provision for a widow or child of a deceased person under section 56 or section 117 of the Succession Act, 1965, or an analogous share or provision paid or made on the death of a deceased person to or for the benefit of any person under the law of another territory; and

(n) a resolution passed by a company which is deemed by subsection (3) to be a disposition;

“donee” means a person who takes a gift;

“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 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;

“general power of appointment” includes every power, right, or authority whether exercisable only by will or otherwise which would enable the holder thereof to appoint or dispose of property to whomsoever he thinks fit or to obtain such power, right or authority, but exclusive of any power exercisable solely in a fiduciary capacity under a disposition not made by himself, or exercisable by a tenant for life under the Settled Land Act, 1882, or as mortgagee;

“gift” means a gift which a person is by this Act deemed to take;

“inheritance” means an inheritance which a person is by this Act deemed to take;

“interest in expectancy” includes an estate in remainder or reversion and every other future interest, whether vested or contingent, but does not include a reversion expectant on the determination of a lease;

“limited interest” means—

(a) an interest (other than a leasehold interest) for the duration of a life or lives or for a period certain; or

(b) any other interest which is not an absolute interest;

“local authority” has the meaning assigned to it by section 2 (2) of the Local Government Act, 1941, and includes a body established under the Local Government Services (Corporate Bodies) Act, 1971;

“market value”, in relation to property, means the market value thereof ascertained in accordance with sections 15, 16 and 17;

“minor child” means a child who has not attained the age of 21 years;

“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 person, 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;

“property” includes rights and interests of any description;

“real property” means real and chattel real property;

“regulations” means regulations made under section 71;

“relative” means a relative within the meaning of subsection (4);

“return” means such a return as is referred to in section 36;

“share”, in relation to a company, includes any interest whatsoever in the company which is analogous to a share in the company, and “shareholder” shall be construed accordingly;

“special power of appointment” means a power of appointment which is not a general power of appointment;

“successor” means a person who takes an inheritance;

“tax” means any tax chargeable under this Act;

“valuation date” has the meaning assigned to it by section 21.

(2) For the purpose of the definition of “general power of appointment” contained in subsection (1), a person shall be deemed to have a general power of appointment—

(a) notwithstanding that he is not sui juris or is under a physical disability;

(b) over money which he has a general power to charge on property; and

(c) over property of which he is tenant in tail in possession.

(3) For the purpose of the definition of “disposition” contained in subsection (1), the passing by a company of a resolution which, by the extinguishment or alteration of the rights attaching to any share of the company, results, directly or indirectly, in the estate of any shareholder of the company being increased in value at the expense of the estate of any other shareholder, shall be deemed to be a disposition made by that other shareholder if he could have prevented the passing of the resolution by voting against it or otherwise; and in this subsection, “share” includes a debenture and loan stock and “shareholder” includes a debenture holder and a holder of loan stock.

(4) For the purposes of this Act, the following persons and no other person shall be relatives of another person, that is to say—

(a) the spouse of that other person;

(b) the father, mother, and any child, uncle or aunt of that other person;

(c) any child (other than that other person), and any child of a child, of any person who is by virtue of paragraph (a) or (b) a relative of that other person; and

(d) the spouse of a person who is by virtue of paragraph (b) or (c) a relative of that other person;

(e) the grandparent of that other person.

(5) For the purposes of this Act—

(a) the relationship between a child, adopted in the manner referred to in paragraph (b) of the definition of “child” contained in subsection (1), and any other person, or between other persons, that would exist if such child had been born to the adoptor or adoptors in lawful wedlock, shall be deemed to exist between such child and that other person or between those other persons, and the relationship of any such child and any person that existed prior to his being so adopted shall be deemed to have ceased; and

(b) an illegitimate child who has not been—

(i) legitimated; or

(ii) adopted under—

(I) the Adoption Acts, 1952 to 1974; or

(II) an adoption law other than the Adoption Acts, 1952 to 1974, having the effect referred to in paragraph (b) (ii) of the definition of “child” contained in subsection (1),

shall be the child of his mother.

(6) In this Act, references to any enactment shall, unless the context otherwise requires, be construed as references to that enactment as amended or extended by any subsequent enactment.

(7) In this Act, a reference to a section or Schedule is a reference to a section of or Schedule to this Act unless it is indicated that reference to some other enactment is intended.

(8) In this Act, a reference to a subsection, paragraph or subparagraph is to the subsection, paragraph or subparagraph of the provision (including a Schedule) in which the reference occurs, unless it is indicated that reference to some other provision is intended.

3 Meaning of “on a death”.

3.—(1) In this Act, “on a death”, in relation to a person becoming beneficially entitled in possession, means—

(a) on the death of a person or at a time ascertainable only by reference to the death of a person;

(b) under a disposition where the date of the disposition is the date of the death of the disponer;

(c) under a disposition where the date of the disposition is on or after the 1st day of April, 1975, and within two years prior to the death of the disponer; or

(d) on the happening, after the cesser of an intervening life interest, of any such event as is referred to in subsection (2).

(2) The events referred to in subsection (1) (d) are any of the following—

(a) the determination or failure of any charge, estate, interest or trust;

(b) the exercise of a special power of appointment;

(c) in the case where a benefit was given under a disposition in such terms that the amount or value of the benefit could only be ascertained from time to time by the actual payment or application of property for the purpose of giving effect to the benefit, the making of any payment or the application of the property; or

(d) any other event which, under a disposition, affects the right to property, or to the enjoyment thereof.

PART II Gift Tax

4 Charge of gift tax.

4.—A capital acquisitions tax, to be called gift tax and to be computed as hereinafter provided, shall, subject to this Act and the regulations thereunder, be charged, levied and paid upon the taxable value of every taxable gift taken by a donee, where the date of the gift is on or after the 28th day of February, 1974.

5 Gift deemed to be taken.

5.—(1) For the purposes of this Act, where, under or in consequence of any disposition, a person becomes beneficially entitled in possession, otherwise than on a death, to any benefit (whether or not the person becoming so entitled already has any interest in the property in which he takes such benefit), otherwise than for full consideration in money or money's worth paid by him, he shall be deemed to take a gift.

(2) A gift shall be deemed—

(a) to consist of the whole or the appropriate part, as the case may be, of the property in which the donee takes a benefit, or on which the benefit is charged or secured or on which the donee is entitled to have it charged or secured; and

(b) if the benefit is an annuity or other periodic payment which is not charged on or secured by any property and which the donee is not entitled to have so charged or secured, to consist of such sum as would, if invested on the date of the gift 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 annual value of the annuity or of the other periodic payment receivable by the donee.

(3) For the purposes of section 6 (1) (c), the sum referred to in subsection (2) (b) shall be deemed not to be situate in the State at the date of the gift.

(4) Where a person makes a disposition under which a relative of the person becomes beneficially entitled in possession to any benefit, the creation or disposition in favour of the person of an annuity or other interest limited to cease on the death, or at a time ascertainable only by reference to the death, of the person, shall not be treated for the purposes of this section as consideration for the grant of such benefit or of any part thereof.

(5) For the purposes of this Act, “appropriate part”, in relation to property referred to in subsection (2), means that part of the entire property in which the benefit subsists, or on which the benefit is charged or secured, or on which the donee is entitled to have it so charged or secured, which bears the same proportion to the entire property as the gross annual value of the benefit bears to the gross annual value of the entire property, and the gift shall be deemed to consist of the appropriate part of each and every item of property comprised in the entire property.

(6) (a) Where, before the 28th day of February, 1974, a contract or agreement was entered into, under or as a consequence of which a person acquired the right, otherwise than for full consideration in money or money's worth, to have a benefit transferred to him, or to another in his right or on his behalf, and an act or acts is or are done, on or after that date, in pursuance of, or in performance or satisfaction, whether in whole or in part, of such contract or agreement, then the gift or inheritance, as the case may be, taken by or in right or on behalf of that person, shall be deemed to have been taken, not when the right was acquired as aforesaid, but either—

(i) when the benefit was transferred to him or to another in his right or on his behalf; or

(ii) when he or another in his right or on his behalf became beneficially entitled in possession to the benefit,

whichever is the later.

(b) In this subsection, a reference to a contract or agreement does not include a reference to a contract or agreement—

(i) which is a complete grant, transfer, assignment or conveyance; or

(ii) which was enforceable by action prior to the 28th day of February, 1974.

6 Taxable gift.

6.—(1) In this Act, “taxable gift” means—

(a) in the case of a gift, other than a gift taken under a discretionary trust, where—

(i) the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift;

or

(ii) the proper law of the disposition under which the donee takes the gift is, at the date of the disposition, the law of the State,

the whole of the gift;

(b) in the case of a gift taken under a discretionary trust where—

(i) the disponer is domiciled in the State at the date of the gift or was (in the case of a gift taken after his death) so domiciled at the time of his death; or

(ii) the proper law of the discretionary trust at the date of the gift is the law of the State,

the whole of the gift; and

(c) in any other case, so much of the property of which the gift consists as is situate in the State at the date of the gift.

(2) For the purposes of subsection (1) (c), a right to the proceeds of sale of property shall be deemed to be situate in the State to the extent that such property is unsold and situate in the State.

(3) Notwithstanding anything contained in subsection (1), no part of the property of which a gift consists shall be a taxable gift where—

(a) the gift is taken prior to the 1st day of April, 1975; and

(b) the disponer in relation to the gift dies prior to that date.

7 Liability to gift tax in respect of gift taken by joint tenants.

7.—The liability to gift tax in respect of a gift taken by persons as joint tenants shall be the same in all respects as if they took the gift as tenants in common in equal shares.

8 Disponer in certain connected dispositions.

8.—(1) Where a donee takes a gift under a disposition made by a disponer (in this section referred to as the original disponer) and, within the period commencing three years before and ending three years after the date of that gift, the donee makes a disposition under which a second donee takes a gift and whether or not the second donee makes a disposition within the same period under which a third donee takes a gift, and so on, each donee shall be deemed to take a gift from the original disponer (and not from the immediate disponer under whose disposition the gift was taken); and a gift so deemed to be taken shall be deemed to be an inheritance (and not a gift) taken by the donee, as successor, from the original disponer if—

(a) the original disponer dies within two years after the date of the disposition made by him; and

(b) the date of the disposition was on or after the 1st day of April, 1975.

(2) This section shall not apply in the case of any disposition (in this subsection referred to as the first-mentioned disposition) in so far as no other disposition, which was connected in the manner described in subsection (1) with such first-mentioned disposition, was made with a view to enabling or facilitating the making of the first-mentioned disposition or the recoupment in any manner of the cost thereof.

9 Aggregable gifts.

9.—Any gift taken by a donee on or after the 28th day of February, 1969, and before the 28th day of February, 1974, so far as it is a taxable gift, shall, for the purpose of computing tax—

(a) on any taxable gift taken by that donee from the same disponer on or after the 28th day of February, 1974; and

(b) on any taxable inheritance taken by that donee, as successor, from the same disponer on or after the 1st day of April, 1975,

be aggregated with the latter taxable gift or taxable inheritance in accordance with the provisions of the Second Schedule.

PART III Inheritance Tax

10 Charge of inheritance tax.

10.—A capital acquisitions tax, to be called inheritance tax and to be computed as hereinafter provided, shall, subject to this Act and the regulations thereunder, be charged, levied and paid upon the taxable value of every taxable inheritance taken by a successor, where the date of the inheritance is on or after the 1st day of April, 1975.

11 Inheritance deemed to be taken.

11.—(1) For the purposes of this Act, where, under or in consequence of any disposition, a person becomes beneficially entitled in possession on a death to any benefit (whether or not the person becoming so entitled already has any interest in the property in which he takes such benefit), otherwise than for full consideration in money or money's worth paid by him, he shall be deemed to take an inheritance.

(2) The provisions of subsections (2), (4) and (5) of section 5 shall apply, with any necessary modifications, in relation to an inheritance as they apply in relation to a gift.

(3) For the purposes of section 12 (1) (b) the sum referred to in section 5 (2) (b) shall be deemed not to be situate in the State at the date of the inheritance.

12 Taxable inheritance.

12.—(1) In this Act, “taxable inheritance” means—

(a) in the case where—

(i) the disponer is domiciled in the State at the date of the disposition under which the successor takes the inheritance; or

(ii) the proper law of the disposition under which the successor takes the inheritance is, at the date of the disposition, the law of the State,

the whole of the inheritance; and

(b) in any case, other than the case referred to in paragraph (a), where, at the date of the inheritance—

(i) the whole of the property—

(I) which was to be appropriated to the inheritance;

or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, the whole of the inheritance;

(ii) a part or proportion of the property—

(I) which was to be appropriated to the inheritance;

or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, that part or proportion of the inheritance.

(2) For the purposes of subsection (1) (b)—

(a) “property which was to be appropriated to the inheritance” and “property out of which property was to be appropriated to the inheritance” shall not include any property which was not applicable to satisfy the inheritance; and

(b) a right to the proceeds of sale of property shall be deemed to be situate in the State to the extent that such property is unsold and situate in the State.

13 Disclaimer.

13.—(1) If—

(a) (i) a benefit under a will or an intestacy; or

(ii) an entitlement to an interest in settled property, is disclaimed;

(b) a claim—

(i) under a purported will in respect of which a grant of representation (within the meaning of the Succession Act, 1965) was not issued; or

(ii) under an alleged intestacy where a will exists in respect of which such a grant was issued,

is waived; or

(c) a right under Part IX of the Succession Act, 1965, or any analogous right under the law of another territory, is renounced, disclaimed, elected against or lapses,

any liability to tax in respect of such benefit, entitlement, claim or right shall cease as if such benefit, entitlement, claim or right, as the case may be, had not existed.

(2) Notwithstanding anything contained in this Act—

(a) a disclaimer of a benefit under a will or intestacy or of an entitlement to an interest in settled property;

(b) the waiver of a claim—

(i) under a purported will in respect of which a grant of representation (within the meaning of the Succession Act, 1965) was not issued; or

(ii) under an alleged intestacy where a will exists in respect of which such a grant issued; or

(c) (i) the renunciation or disclaimer of;

(ii) the election against; or

(iii) the lapse of,

a right under Part IX of the Succession Act, 1965, or any analogous right under the law of another territory,

shall not be a disposition for the purposes of this Act.

(3) Subsection (1) shall not have effect to the extent of the amount of any consideration in money or money's worth received for the disclaimer, renunciation, election or lapse or for the waiver of a claim; and the receipt of such consideration shall be deemed to be a gift or an inheritance, as the case may be, in respect of which no consideration was paid by the donee or successor and which was derived from the disponer who provided the property in relation to which the benefit, entitlement, claim or right, referred to in subsection (1), arose.

14 Surviving joint tenant deemed to take an inheritance, etc.

14.—(1) On the death of one of several persons who are beneficially and absolutely entitled in possession as joint tenants, the surviving joint tenant or surviving joint tenants shall be deemed to take an inheritance of the share of the deceased joint tenant, as successor or successors from the deceased joint tenant as disponer.

(2) The liability to inheritance tax in respect of an inheritance taken by persons as joint tenants shall be the same in all respects as if they took the inheritance as tenants in common in equal shares.

PART IV Value Of Property For Tax

15 Market value of property.

15.—(1) Subject to the provisions of this Act, the market value of any property for the purposes of this Act shall be estimated to be the price which, in the opinion of the Commissioners, such property would fetch if sold in the open market on the date on which the property is to be valued in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the property.

(2) In estimating the market value of any property, the Commissioners shall not make any reduction in the estimate on account of the estimate being made on the assumption that the whole property is to be placed on the market at one and the same time.

(3) The market value of any property shall be ascertained by the Commissioners in such manner and by such means as they think fit, and they may authorise a person to inspect any property and report to them the value thereof for the purposes of this Act, and the person having the custody or possession of that property shall permit the person so authorised to inspect it at such reasonable times as the Commissioners consider necessary.

(4) Where the Commissioners require a valuation to be made by a person named by them, the costs of such valuation shall be defrayed by the Commissioners.

(5) Subject to the provisions of this Act, in estimating the price which unquoted shares or securities might be expected to fetch if sold in the open market, it shall be assumed that in that market there is available to any prospective purchaser of the shares or securities all the information which a prudent prospective purchaser might reasonably require if he were proposing to purchase them from a willing vendor by private treaty and at arm's length.

(6) In subsection (5), “unquoted shares or securities” means shares or securities which are not dealt in on a stock exchange.

16 Market value of certain shares in private trading companies.

16.—(1) The market value of each share in a private trading company which (after the taking of the gift or of the inheritance) is, on the date of the gift or on the date of the inheritance, a company controlled by the donee or the successor, shall be ascertained by the Commissioners, for the purposes of tax, as if it formed part of a group of shares sufficient in number to give the owner of the group control of the company.

(2) In this section—

“nominee” includes a person who may be required to exercise his voting power on the directions of, or who holds shares directly or indirectly on behalf of, another person;

“private company” means a body corporate (wherever incorporated)—

(a) in which the number of shareholders (excluding employees who are not directors of the company and any shareholder who is such as nominee of a beneficial owner of shares) is not more than fifty;

(b) which has not issued any of its shares as a result of a public invitation to subscribe for shares; and

(c) which is under the control of not more than five persons;

“private trading company” means a private company which is not a private non-trading company within the meaning of section 17.

(3) In this section, a reference to a company controlled by the donee or successor is a reference to a company that is under the control of any one or more of the following, that is to say, the donee or successor, the relatives of the donee or successor, nominees of the donee or successor, nominees of relatives of the donee or successor, and the trustees of a settlement whose objects include the donee or successor or relatives of the donee or successor; and for the purposes of this section, a company which is so controlled by the donee or successor shall be regarded as being itself a relative of the donee or successor.

(4) For the purposes of this section—

(a) a company shall be deemed to be under the control of not more than five persons if any five or fewer persons together exercise, or are able to exercise, or are entitled to acquire, control, whether direct or indirect, of the company; and for this purpose—

(i) persons who are relatives of any other person together with that other person;

(ii) persons who are nominees of any other person together with that other person;

(iii) persons in partnership; and

(iv) persons interested in any shares or obligations of the company which are subject to any trust or are part of the estate of a deceased person,

shall respectively be treated as a single person; and

(b) a person shall be deemed to have control of a company at any time if—

(i) he then had control of the powers of voting on all questions, or on any particular question, affecting the company as a whole, which, if exercised, would have yielded a majority of the votes capable of being exercised thereon, or could then have obtained such control by an exercise at that time of a power exercisable by him or at his direction or with his consent;

(ii) he then had the capacity, or could then by an exercise of a power exercisable by him or at his direction or with his consent obtain the capacity, to exercise or to control the exercise of any of the following powers, that is to say—

(I) the powers of a board of directors of the company;

(II) powers of a governing director of the company;

(III) power to nominate a majority of the directors of the company or a governing director thereof;

(IV) the power to veto the appointment of a director of the company, or

(V) powers of a like nature;

(iii) he then had a right to receive, or the receipt of, more than one-half of the total amount of the dividends of the company, whether declared or not, and for the purposes of this subparagraph, “dividend” shall be deemed to include interest on any debentures of the company; or

(iv) he then had an interest in the shares of the company of an aggregate nominal value representing one-half or more of the aggregate nominal value of the shares of the company.

17 Market value of certain shares in private non-trading companies.

17.—(1) The market value of each share in a private non-trading company which (after the taking of the gift or of the inheritance) is, on the date of the gift or on the date of the inheritance, a company controlled by the donee or the successor, shall for the purposes of this Act, be such sum as would have been payable in respect of the share to the owner thereof if the company had been voluntarily wound up and all the assets realised on the date at which the share is to be valued.

(2) In this section—

“investment income”, in relation to a private company, means income which, if the company were an individual, would not be earned income within the meaning of section 2 of the Income Tax Act, 1967;

“private company” and “company controlled by the donee or the successor” have the meanings assigned to them by section 16;

“private non-trading company” means a private company—

(a) whose income (if any) in the twelve months preceding the date at which a share therein is to be valued consisted wholly or mainly of investment income; and

(b) whose property, on the date referred to in paragraph (a), consisted wholly or mainly of property from which investment income is derived.

(3) Where the assets of such a private non-trading company as is referred to in subsection (1) include a share in another such private non-trading company (hereinafter referred to as the latter company), the market value of such share shall be ascertained on the basis that the latter company is voluntarily wound up and its assets realised on the date on which the share is to be valued.

(4) In determining the market value of the share referred to in subsection (1) or (3), no allowance shall be made for the costs of winding up any company or of realising its assets.

(5) In ascertaining, for the purposes of subsection (1) or (3), the amount which the assets of a company would realise, the assets shall be deemed to realise the amount of their market value as at the date at which the share referred to in subsection (1) or (3) is to be valued.

18 Taxable value of a taxable gift or taxable inheritance.

18.—(1) In this section, “incumbrance-free value”, in relation to a taxable gift or a taxable inheritance, means the market value at the valuation date of the property of which the taxable gift or taxable inheritance consists at that date, after deducting any liabilities, costs and expenses that are properly payable out of the taxable gift or taxable inheritance.

(2) Subject to the provisions of this section (but save as provided in section 19), the taxable value of a taxable gift or a taxable inheritance (where the interest taken by the donee or successor is not a limited interest) shall be ascertained by deducting from the incumbrance-free value thereof the market value of any bona fide consideration in money or money's worth, paid by the donee or successor for the gift or inheritance, including—

(a) any liability of the disponer which the donee or successor undertakes to discharge as his own personal liability; and

(b) any other liability to which the gift or inheritance is subject under the terms of the disposition under which it is taken,

and the amount so ascertained shall be the taxable value:

Provided that no deduction shall be made under this subsection in respect of any liability which falls to be deducted in ascertaining the incumbrance-free value.

(3) Where a liability (other than a liability within the meaning of subsection (9)) for which a deduction may be made under the provisions of subsection (1) or (2) falls to be discharged after the time at which it falls to be taken into account as a deduction under either of those subsections, it shall be valued for the purpose of making such a deduction at its current market value at the time at which it falls to be so taken into account.

(4) The taxable value of a taxable gift or a taxable inheritance, where the interest taken by the donee or the successor is a limited interest, shall be ascertained as follows—

(a) the value of the limited interest in a capital sum equal to the incumbrance-free value shall be ascertained in accordance with the Rules contained in the First Schedule; and

(b) from the value ascertained in accordance with paragraph (a) a deduction shall be made in respect of the market value of any bona fide consideration in money or money's worth paid by the donee or the successor for the gift or the inheritance and the amount remaining after such deduction shall be the taxable value:

Provided that no deduction shall be made under this paragraph in respect of any liability which falls to be deducted in ascertaining the incumbrance-free value.

(5) A deduction shall not be made under the provisions of this section—

(a) in respect of any liability the payment of which is contingent on the happening of some future event:

Provided that if the event on the happening of which the liability is contingent happens and the liability is paid, then, on a claim for relief being made to the Commissioners and subject to the other provisions of this section, a deduction shall be made in respect of the liability and such adjustment of tax as is appropriate shall be made; and such adjustment shall be made on the basis that the donee or successor had taken an interest in possession in the amount which falls to be deducted for the liability, for a period certain which was equal to the actual duration of the postponement of the payment of the liability;

(b) in respect of any liability, costs or expenses in so far as the donee or successor has a right of reimbursement from any source, unless such reimbursement cannot be obtained;

(c) in respect of any liability created by the donee or successor or any person claiming in right of the donee or successor or on his behalf;

(d) in respect of tax, interest or penalties chargeable under this Act in respect of the gift or inheritance, or of the costs, expenses or interest incurred in raising or paying the same;

(e) in respect of any liability in so far as such liability is an incumbrance on, or was created or incurred in acquiring, any property which is comprised in any gift or inheritance and which is exempt from tax under any provision of this Act or otherwise;

(f) in the case of any gift or inheritance referred to in section 6 (1) (c) or section 12 (1) (b) in respect of—

(i) any liability, costs or expenses due to a person resident outside the State (save in so far as such liability is required by contract to be paid in the State or is charged on the property which is situate in the State and which is comprised in the gift or inheritance); or

(ii) any liability, costs or expenses in so far as the same are charged on or secured by property which is comprised in the gift or inheritance and which is not situate in the State,

save to the extent that all the property situate outside the State and comprised in the gift or inheritance is insufficient for the payment of the liability, costs or expenses;

(g) for any tax in respect of which a credit is allowed under the provisions of section 66 or 67.

(6) In the case of a gift or inheritance referred to in subsection (5) (f), any deduction to be made under subsection (2) or (4) (b) shall be restricted to the proportion of the consideration which bears the same proportion to the whole of the consideration as the taxable gift or taxable inheritance bears to the whole of the gift or the whole of the inheritance.

(7) A deduction shall not be made under the provisions of this section—

(a) more than once for the same liability, costs, expenses or consideration, in respect of all gifts and inheritances taken by the donee or successor from the disponer; or

(b) for any liability, costs, expenses or consideration, a proportion of which falls to be allowed under the provisions of section 19 (2) (ii) or (iii) in respect of a gift or inheritance taken by the donee or successor from the disponer.

(8) Where a taxable gift or a taxable inheritance is subject to a liability within the meaning of subsection (9), the deduction to be made in respect thereof under this section shall be an amount equal to the market value of the whole or the appropriate part, as the case may be, of the property, within the meaning of section 5 (5).

(9) For the purpose of subsection (8), “liability”, in relation to a taxable gift or a taxable inheritance, means a liability which deprives the donee or successor, whether permanently or temporarily, of the use, enjoyment or income in whole or in part of the property, or of any part of the property, of which the taxable gift or taxable inheritance consists.

(10) Where—

(a) bona fide consideration in money or money's worth has been paid by a person for the granting to him, by a disposition, of an interest in expectancy in property; and

(b) at the coming into possession of the interest in expectancy, that person takes a gift or an inheritance of that property under that disposition,

the deduction to be made under subsection (2) or (4) (b) for consideration paid by that person shall be a sum equal to the same proportion of the taxable value of the taxable gift or taxable inheritance (as if no deduction had been made for such consideration) as the amount of the consideration so paid bore to the market value of the interest in expectancy at the date of the payment of the consideration.

(11) Any deduction, under the provisions of this section, in respect of a liability which is an incumbrance on any property shall so far as possible be made against that property.

19 Value of agricultural property.

19.—(1) In this section—

“agricultural property” means agricultural land, pasture and woodland situate in the State and crops, trees and underwood growing on such land and also includes such farm buildings, farm houses and mansion houses (together with the lands occupied therewith) as are of a character appropriate to the property;

“agricultural value” means the market value of agricultural property reduced by 50 per cent. of that value, or by a sum of £100,000, whichever is the lesser;

“farmer”, in relation to a donee or successor, means an individual who is domiciled and ordinarily resident in the State and in respect of whom not less than 75 per cent. of the market value of the property to which he is beneficially entitled in possession is represented by the market value of property in the State which consists of agricultural property, livestock, bloodstock and farm machinery, and, for the purposes of this definition, no deduction shall be made from the market value of property for any debts or incumbrances.

(2) Save as provided in subsection (7), in so far as any gift or inheritance consists of agricultural property—

(a) at the date of the gift or at the date of the inheritance; and

(b) at the valuation date,

and is taken by a donee or successor who is, on the valuation date and after taking the gift or inheritance, a farmer, the provisions of section 18 (other than subsection 7 (b) thereof) shall apply in relation to agricultural property as they apply in relation to other property subject to the following modifications—

(i) in subsection (1) of that section, the reference to market value shall be construed as a reference to agricultural value;

(ii) where a deduction is to be made for any liability, costs or expenses, in accordance with subsection (1) of that section, only a proportion of such liability, costs or expenses shall be deducted and that proportion shall be the proportion that the agricultural value of the agricultural property bears to the market value of that property; and

(iii) where a deduction is to be made for any consideration under subsection (2) or (4) (b) of that section, only a proportion of such consideration shall be deducted and that proportion shall be the proportion that the agricultural value of the agricultural property bears to the market value of that property.

(3) Where a taxable gift or a taxable inheritance is taken by a donee or successor subject to the condition that the whole or part thereof will be invested in agricultural property and such condition is complied with within two years after the date of the gift or the date of the inheritance, then the gift or inheritance shall be deemed, for the purposes of this section, to have consisted—

(a) at the date of the gift or at the date of the inheritance; and

(b) at the valuation date,

of agricultural property to the extent to which the gift or inheritance is subject to such condition and has been so invested.

(4) In relation to the deduction, in respect of agricultural property, of 50 per cent. of its market value, or £100,000, whichever is the lesser, the total amount deductible in ascertaining the agricultural value shall not exceed £100,000, in respect of the aggregate of—

(a) all taxable gifts taken on or after the 28th day of February, 1969; and

(b) all taxable inheritances taken on or after the 1st day of April, 1975,

which consist in whole or in part of agricultural property, taken by the same person, as donee or successor, from the same disponer.

(5) (a) The agricultural value shall cease to be applicable to real property which is agricultural property if and to the extent that the property—

(i) is sold or compulsorily acquired within the period of six years after the date of the gift or the date of the inheritance; and

(ii) is not replaced, within a year of the sale or compulsory acquisition, by other agricultural property,

and tax shall be chargeable in respect of the gift or inheritance as if the property were not agricultural property :

Provided that this paragraph shall not have effect where the donee or successor dies before the property is sold or compulsorily acquired.

(b) If an arrangement is made, in the administration of property subject to a disposition, for the appropriation of property in or towards the satisfaction of a benefit under the disposition, such arrangement shall be deemed not to be a sale or a compulsory acquisition for the purposes of paragraph (a).

(6) For the purposes of subsection (2), if, in the administration of property subject to a disposition, property is appropriated in or towards the satisfaction of a benefit in respect of which a person is deemed to take a gift or an inheritance under the disposition, the property so appropriated, if it was subject to the disposition at the date of the gift or at the date of the inheritance, shall be deemed to have been comprised in that gift or inheritance at the date of the gift or at the date of the inheritance.

(7) The provisions of subsection (2) shall have effect in relation to agricultural property which consists of trees or underwood as if the words “and is taken by a donee or successor who is, on the valuation date and after taking the gift or inheritance, a farmer,” were omitted therefrom.

(8) In this section, other than in subsection (4), any reference to a donee or successor shall include a reference to the transferee referred to in section 23 (1).

20 Contingencies affecting gifts or inheritances.

20.—Where, under a disposition, a person becomes beneficially entitled in possession to any benefit and, under the terms of the disposition, the entitlement, or any part thereof, may cease upon the happening of a contingency (other than the revocation of the entitlement upon the exercise by the disponer of such a power as is referred to in section 30), the taxable value of any taxable gift or taxable inheritance taken by that person on becoming so entitled to that benefit shall be ascertained as if no part of the entitlement were so to cease; but, in the event and to the extent that the entitlement so ceases, the tax payable by that person shall, to that extent, be adjusted (if, by so doing, a lesser amount of tax would be payable by him) on the basis that he had taken an interest in possession for a period certain which was equal to the actual duration of his beneficial entitlement in possession :

Provided that nothing in this section shall prejudice any charge for tax on the taking by such person of a substituted gift or inheritance on the happening of such a contingency.

21 Valuation date for tax purposes.

21.—(1) Subject to the provisions of subsection (7), the valuation date of a taxable gift shall be the date of the gift.

(2) The valuation date of a taxable inheritance shall be the date of death of the deceased person on whose death the inheritance is taken if the successor or any person in right of the successor or on his behalf takes the inheritance—

(a) as a donatio mortis causa; or

(b) by reason of the failure to exercise a power of revocation.

(3) If a gift becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within two years prior to the death of the disponer, the valuation date thereof shall be determined as if it were a gift.

(4) The valuation date of a taxable inheritance, other than a taxable inheritance referred to in subsection (2) or (3), shall be the earliest date of the following—

(a) the earliest date on which a personal representative or trustee or the successor or any other person is entitled to retain the subject matter of the inheritance for the benefit of the successor or of any person in right of the successor or on his behalf;

(b) the date on which the subject matter of the inheritance is so retained; or

(c) the date of delivery, payment or other satisfaction or discharge of the subject matter of the inheritance to the successor or for his benefit or to or for the benefit of any person in right of the successor or on his behalf.

(5) If any part of a taxable inheritance referred to in subsection (4) may be retained, or is retained, delivered, paid or otherwise satisfied, whether by way of part payment, advancement, payment on account or in any manner whatsoever, before any other part or parts of such inheritance, the appropriate valuation date for each part of the inheritance shall be determined in accordance with that subsection as if each such part respectively were a separate inheritance.

(6) The Commissioners may give to an accountable person a notice in writing of the date determined by them to be the valuation date in respect of the whole or any part of an inheritance, and, subject to any decision on appeal pursuant to subsection (9), the date so determined shall be deemed to be the valuation date.

(7) If a taxable inheritance referred to in subsection (4) or (5) is disposed of, ceases or comes to an end before the valuation date referred to in those subsections in such circumstances as to give rise to a taxable gift, the valuation date in respect of such taxable gift shall be the same date as the valuation date of the taxable inheritance.

(8) Notwithstanding anything contained in this section, the Commissioners may, in case of doubt, with the agreement in writing of the accountable person or his agent, determine the valuation date of the whole or any part of any taxable inheritance and the valuation date so determined shall be substituted for the valuation date which would otherwise be applicable by virtue of this section.

(9) An appeal shall lie against any determination made by the Commissioners under subsection (6) and the provisions of section 52 shall apply, with any necessary modifications, in relation to an appeal under this subsection as they apply in relation to an appeal against an assessment of tax.

PART V Provisions relating to Gifts and Inheritances

22 Discretionary trusts.

22.—Where a person becomes beneficially entitled in possession to any benefit—

(a) under a discretionary trust, other than a discretionary trust referred to in paragraph (b), otherwise than for full consideration in money or money's worth paid by him, he shall be deemed to have taken a gift;

(b) under a discretionary trust created—

(i) by will at any time;

(ii) by a disposition, where the date of the disposition is on or after the 1st day of April, 1975, and within two years prior to the death of the disponer; or

(iii) by a disposition inter vivos and limited to come into operation on a death occurring before or after the passing of this Act,

otherwise than for full consideration in money or money's worth paid by him, he shall be deemed to have taken an inheritance.

23 Dealings with future interests.

23.—(1) Where a benefit, to which a person (in this section referred to as the remainderman) is entitled under a disposition, devolves, or is disposed of, either in whole or in part, before it has become an interest in possession so that, at the time when the benefit comes into possession, it is taken, either in whole or in part, by a person (in this section referred to as the transferee) other than the remainderman to whom it was limited by the disposition, then tax shall be payable, in respect of a gift or inheritance, as the case may be, of the remainderman in all respects as if, at that time, the remainderman had become beneficially entitled in possession to the full extent of the benefit limited to him under the disposition, and the transferee shall be the person primarily accountable for the payment of tax to the extent that the benefit is taken by him.

(2) The provisions of subsection (1) shall not prejudice any charge for tax in respect of any gift or inheritance affecting the same property or any part of it under any other disposition.

(3) In subsection (1), “benefit” includes the benefit of the cesser of a liability referred to in section 28.

24 Release of limited interests, etc.

24.—(1) Where an interest in property, which is limited by the disposition creating it to cease on an event, has come to an end (whether by another disposition, the taking of successive interests into one ownership, or by any means whatever other than the happening of another event on which the interest was limited by the first-mentioned disposition to cease) before the happening of such event, tax shall be payable under the first-mentioned disposition in all respects as if the event on which the interest was limited to cease under that disposition had happened immediately before the coming to an end of the interest.

(2) The provisions of subsection (1) shall not prejudice any charge for tax in respect of any gift or inheritance affecting the same property or any part of it under any disposition other than that first mentioned in subsection (1).

(3) Notwithstanding anything contained in subsection (2), if—

(a) an interest in property which was limited to cease on an event was limited to the disponer by the disposition creating that interest; and

(b) on the coming to an end of that interest, the provisions of subsection (1) have effect in relation to a gift or inheritance which was taken by a donee or successor under that disposition and which consists of the property in which that interest subsisted, then—

a further gift or inheritance taken by the same donee or successor under another disposition made by the same disponer (being the disposition by which that interest has come to an end) shall not be a taxable gift or a taxable inheritance in so far as it consists of the whole or any part of the same property.

(4) In this section, “event” includes—

(a) a death; and

(b) the expiration of a specified period.

25 Settlement of an interest not in possession.

25.—(1) Where any donee or successor takes a gift or an inheritance under a disposition made by himself then, if at the date of such disposition he was entitled to the property comprised in the disposition, either expectantly on the happening of an event, or subject to a liability within the meaning of section 18 (9), and such event happens or such liability ceases during the continuance of the disposition, tax shall be charged on the taxable value of the taxable gift or taxable inheritance which he would have taken on the happening of such event, or on the cesser of such liability, if no such disposition had been made.

(2) The provisions of subsection (1) shall not prejudice any charge for tax in respect of any gift or inheritance affecting the same property or any part of it under the said disposition.

(3) In this section, “event” has the same meaning as it has in section 24.

26 Enlargement of interests.

26.—(1) Where a person, having a limited interest in possession in property (in this section referred to as the first-mentioned interest), takes a further interest (in this section referred to as the second-mentioned interest) in the same property, as a taxable gift or a taxable inheritance, in consequence of which he becomes the absolute owner of the property, the taxable value of the taxable gift or taxable inheritance of the second-mentioned interest at the valuation date shall be reduced by the value at that date of the first-mentioned interest, taking such value to be the value, ascertained in accordance with the Rules contained in the First Schedule, of a limited interest which—

(a) is a limited interest in a capital sum equal to the value of the property;

(b) commences on that date; and

(c) is to continue for the unexpired balance of the term of the first-mentioned interest.

(2) For the purposes of subsection (1) (a), “value” means such amount as would be the incumbrance-free value, within the meaning of section 18 (1), if the limited interest were taken, at the date referred to in subsection (1), as a taxable gift or taxable inheritance.

(3) The provisions of this section shall not have effect where the second-mentioned interest is taken under the disposition under which the first-mentioned interest was created.

27 Dispositions involving powers of appointment.

27.—(1) Where, by virtue of or in consequence of the exercise of, or the failure to exercise, or the release of, a general power of appointment by any person having such a power, a person becomes beneficially entitled in possession to any benefit, then, for the purposes of this Act, the disposition shall be the exercise of, or the failure to exercise, or the release of, the power and not the disposition under which the power was created, and the person exercising, or failing to exercise, or releasing, the power shall be the disponer.

(2) Where, by virtue of or in consequence of the exercise of, or the failure to exercise, or the release of, a special power of appointment by any person having such a power, a person becomes beneficially entitled in possession to any benefit, then, for the purposes of this Act, the disposition shall be the disposition under which the power was created and the person who created the power shall be the disponer.

28 Cesser of liabilities.

28.—(1) The benefit of the cesser of—

(a) a liability within the meaning of section 18 (9); or

(b) any liability similar to that referred to in paragraph (a) to which the taking of a benefit which was a gift or inheritance was subject,

shall be deemed to be a gift or an inheritance, as the case may be, which shall be deemed—

(i) to the extent that the liability is charged on or secured by any property at the time of its cesser, to consist of the whole or the appropriate part, as the case may be, of that property; and

(ii) to the extent that the liability is not charged on or secured by any property at the time of its cesser, to consist of such sum as would, under the provisions of section 5 (2) (b), be the sum the annual income of which would be equal to the annual value of the liability.

(2) In this section, “appropriate part” has the meaning assigned to it by section 5 (5).

(3) For the purposes of sections 6 (1) (c) and 12 (1) (b), the sum referred to in subparagraph (ii) of subsection (1) shall be deemed not to be situate in the State at the date of the gift or at the date of the inheritance.

29 Disposition enlarging value of property.

29.—(1) In this section, “property” does not include any property to which a donee or successor became beneficially entitled in possession prior to the 28th day of February, 1969.

(2) Where the taking by any person of a beneficial interest in any property (hereinafter in this section referred to as additional property) under any disposition made by a disponer has the effect of increasing the value of any other property (hereinafter in this section referred to as original property) to which that person is beneficially entitled in possession, and which had been derived from the same disponer, the following provisions shall have effect—

(a) the increase in value so effected shall be deemed to be a gift or an inheritance, as the case may be, arising under that disposition and taken by that person, as donee or successor, from that disponer, at the time he took the beneficial interest in the additional property;

(b) the original property shall be treated as having been increased in value if the market value of that property at the time referred to in paragraph (a) would be greater if it was sold as part of an aggregate of the original property and the additional property rather than as a single item of property, and the increase in value for the purposes of this section shall be the amount by which the market value of the original property if sold at that time as part of such aggregate would be greater than the amount of the market value of that property if sold at that time as a single item of property;

(c) the additional property shall, for the purpose of determining its market value, be deemed to be part of an aggregate of the original property and the additional property; and

(d) the market value of any property which is to be valued as part of an aggregate of property shall be ascertained as being so much of the market value of such aggregate as may reasonably be ascribed to that part.

(3) For the purpose of this section, the donee or successor shall be deemed to be beneficially entitled in possession to any property notwithstanding that within five years prior to such a disposition as is referred to in subsection (2) he has divested himself of such property, or any part thereof, otherwise than for full consideration in money or money's worth or has disposed of it to a company of which he is, at any time within that period of five years, deemed to have control within the meaning of section 16 (4) (b).

(4) In subsection (3), “company” means a private company within the meaning of section 16 (2).

30 Gift subject to power of revocation.

30.—Where, under any disposition, a person becomes beneficially entitled in possession to any benefit and, under the terms of the disposition, the disponer has reserved to himself the power to revoke the benefit, such person shall, for the purposes of this Act, be deemed not to be beneficially entitled in possession to the benefit unless and until the power of revocation is released by the disponer, or otherwise ceases to be exercisable.

31 Free use of property, free loans, etc.

31.—(1) A person shall be deemed to take a gift in each relevant period during the whole or part of which he is allowed to have the use, occupation or enjoyment of any property (to which property he is not beneficially entitled in possession) otherwise than for full consideration in money or money's worth.

(2) In subsections (1) and (4), “relevant period”, in relation to any use, occupation or enjoyment of property, means the period from the 28th day of February, 1974, to the 31st day of December, 1974, and thereafter the period of twelve months ending on the 31st day of December in each year.

(3) A gift referred to in subsection (1) shall be deemed to consist of a sum equal to the difference between the amount of any consideration in money or money's worth, given by the person referred to in subsection (1) for such use, occupation or enjoyment, and the best price obtainable in the open market for such use, occupation or enjoyment.

(4) A gift referred to in subsection (1) shall be treated as being taken at the end of the relevant period or, if earlier, immediately prior to the time when the use, occupation or enjoyment referred to in subsection (1) comes to an end.

(5) In any case where the use, occupation or enjoyment of property is allowed to a person, not being beneficially entitled in possession to that property, under a disposition—

(a) made by will;

(b) where the date of the disposition is on or after the 1st day of April, 1975, and within two years prior to the death of the disponer; or

(c) which is a disposition inter vivos and the use, occupation or enjoyment is had by that person after the cesser of another person's life interest,

subsections (1), (3) and (4) shall have effect in relation to that property as if a reference to an inheritance were substituted for the reference to a gift wherever it occurs in those subsections, and for the purpose of this subsection “relevant period” in subsections (1) and (4), in relation to the use, occupation or enjoyment of property, means the period of nine months ending on the 31st day of December, 1975, and thereafter the period of twelve months ending on the 31st day of December in any year.

(6) For the purposes of sections 6 (1) (c) and 12 (1) (b), the sum referred to in subsection (3) shall be deemed not to be situate in the State at the date of the gift or at the date of the inheritance.

32 When interest in assurance policy becomes interest in possession.

32.—(1) For the purposes of this Act, an interest in a policy of assurance upon human life shall be deemed to become an interest in possession when and only when, either—

(a) the policy matures; or

(b) prior to the maturing of the policy, the policy is surrendered to the insurer for a consideration in money or money's worth:

Provided that if, during the currency of the policy, the insurer makes a payment of money or money's worth, in full or partial discharge of the policy, the interest shall be deemed to have come into possession to the extent of such payment.

(2) This section shall have effect in relation to a contract for a deferred annuity, and for the purposes of this section such a contract shall be deemed to mature on the date when the first instalment of the annuity falls due.

33 Provisions to apply where section 98 of Succession Act, 1965, has effect.

33.—(1) If, on the death of a testator and by virtue of the provisions of section 98 of the Succession Act, 1965, or otherwise, a disposition takes effect as if a person, who had predeceased the testator, had survived the testator, the benefit taken by the estate of that person shall not be deemed to be an inheritance.

(2) Where a person survives a testator, and—

(a) such person becomes beneficially entitled, under a disposition made by a person who predeceased the testator, to any benefit in relation to any property devised or bequeathed by the testator; and

(b) section 33 of the Wills Act, 1837, or section 98 of the Succession Act, 1965, or any analogous provision of the law of another territory has effect in relation to the devise or bequest.

such person shall be deemed for the purposes of inheritance tax to derive the benefit from the testator, as disponer.

34 Disposition by or to a company.

34.—(1) For the purposes of this Act—

(a) consideration paid by, or a disposition made by, a company shall be deemed to be consideration, or a disposition, as the case may be, paid or made; and

(b) consideration, or a gift, or an inheritance taken by a company shall be deemed to be consideration, or a gift or an inheritance, as the case may be, taken,

by the beneficial owners of the shares in the company and the beneficial owners of the entitlements under any liability incurred by the company (otherwise than for the purposes of the business of the company, wholly and exclusively) in the same proportions as the amounts which would be payable to them if the company were wound up voluntarily and its assets were realised on the date of the payment, disposition, gift or inheritance, as the case may be, would bear to each other (the amount of any realisation being ascertained for this purpose in accordance with section 17 as if the date of the payment, disposition, gift or inheritance were the date of such realisation).

(2) In this section, “company” means a private company within the meaning of section 16 (2).

(3) For the purposes of subsection (1) all acts, omissions and receipts of the company shall be deemed to be those of the beneficial owners of the shares and entitlements, referred to in subsection (1), in the company, in the proportions mentioned in that subsection.

(4) Where the beneficial owner of any shares in a company or of any entitlement of the kind referred to in subsection (1), is itself a company, the beneficial owners of the shares and entitlements, referred to in subsection (1), in the latter company, shall be deemed to be the beneficial owners of the latter company's shares and entitlements in the former company, in the proportions in which they are the beneficial owners of the shares and entitlements in the latter company.

(5) So far as the shares and entitlements referred to in subsection (1) are held in trust and have no ascertainable beneficial owners, consideration paid, or a disposition made, by the company shall be deemed to be paid or made by the disponer who made the disposition under which the shares and entitlements are so held in trust.

PART VI Returns and Assessments

35 Accountable persons.

35.—(1) The person primarily accountable for the payment of tax shall be—

(a) save as provided in paragraph (b), the donee or successor, as the case may be; and

(b) in the case referred to in section 23 (1), the transferee referred to in that subsection, to the extent referred to in that subsection.

(2) Subject to subsections (3) and (4), the following persons shall also be accountable for the payment of any amount of the tax for which the persons referred to in subsection (1) are made primarily accountable—

(a) in the case of a gift—

(i) the disponer; and

(ii) every trustee, guardian, committee, personal representative, agent or other person in whose care any property comprised in the gift or the income therefrom is placed at the date of the gift or at any time thereafter and every person in whom the property is vested after that date, other than a bona fide purchaser or mortgagee for full consideration in money or money's worth, or a person deriving title from or under such a purchaser or mortgagee;

(b) in the case of an inheritance, every trustee, guardian, committee, personal representative, agent or other person in whose care any property comprised in the inheritance or the income therefrom is placed at the date of the inheritance or at any time thereafter and every person in whom the property is vested after that date, other than a bona fide purchaser or mortgagee for full consideration in money or money's worth, or a person deriving title from or under such a purchaser or mortgagee:

Provided that the disponer as such shall not be so accountable in the case where the date of the disposition was prior to the 28th day of February, 1974.

(3) No person referred to in subsection (2) (a) (ii) or (b) shall (unless he is a person who is also primarily accountable under subsection (1)) be liable for tax chargeable on any gift or inheritance to an amount in excess of—

(a) the market value of so much of the property of which the gift or inheritance consists; and

(b) so much of the income from such property,

which has been received by him, or which, but for his own neglect or default, would have been received by him or to which he is beneficially entitled in possession.

(4) A person who acts solely in the capacity of an agent shall not be liable for tax chargeable on a gift or inheritance to an amount in excess of the market value of so much of the property of which the gift or inheritance consists and of the income from such property which he held, or which came into his possession, at any time after the serving on him of the notice referred to in subsection (5).

(5) The Commissioners may serve on any person who acts solely in the capacity of agent in relation to any property comprised in a gift or an inheritance a notice in writing informing him of his liability under this section.

(6) The tax shall be recoverable from any one or more of—

(a) the accountable persons; and

(b) the personal representatives of any accountable persons who are dead,

on whom the Commissioners have served notice in writing of the assessment of tax in exercise of the power conferred on them by section 39:

Provided that the liability of a personal representative under this subsection shall not exceed the amount for which the accountable person, of whom he is the personal representative, was liable.

(7) Any person referred to in subsection (2) (a) or (b) or in subsection (6) (b) who is authorised or required to pay, and pays, any tax in respect of any property comprised in a gift or in an inheritance may recover the amount paid by him in respect of tax from the person primarily accountable therefor.

(8) A person—

(a) who is primarily accountable for the payment of tax; or

(b) referred to in subsection (2) (a) or (b) or in subsection (6) (b) who is authorised or required to pay tax,

in respect of any property shall, for the purpose of paying the tax, or raising the amount of the tax when already paid, have power, whether the property is or is not vested in him, to raise the amount of such tax and any interest and expenses properly paid or incurred by him in respect thereof, by the sale or mortgage of, or a terminable charge on, that property or any part thereof.

(9) If a person, who is primarily accountable for the payment of tax in respect of a gift or inheritance (in this subsection and in subsection (11) referred to as the first gift or inheritance) derived from a disponer, has not paid the tax on the first gift or inheritance, the Commissioners may serve a notice in writing in accordance with subsection (11) on any person who is, by virtue of paragraph (a) (ii) or (b) of subsection (2), accountable for the payment of tax on any other gift or inheritance (referred to in subsections (10) and (11) as the second gift or inheritance) taken by the same donee or successor from the same disponer, and the person on whom the notice is served shall thereupon become accountable for the payment of tax in respect of the first gift or inheritance.

(10) The provisions of subsections (3), (4), (5), (6), (7) and (8) shall apply in relation to a person made accountable under subsection (9) as they apply in relation to a person referred to in paragraph (a) (ii) or (b) of subsection (2) and, for the purposes of this subsection—

(a) references in subsections (3) and (4) to the property of which the gift or inheritance consists; and

(b) the second and third references to property in subsection (8),

shall be construed as references to the property of which the second gift or inheritance consists, in so far as the last-mentioned property had not been duly paid out at the date of the service of the notice under subsection (9).

(11) A notice under subsection (9) shall refer expressly to the first and the second gift or inheritance, and shall inform the person on whom it is served of his accountability in respect of the first gift or inheritance.

(12) Every public officer having in his custody any rolls, books, records, papers, documents, or proceedings, the inspection whereof may tend to secure the tax, or to prove or lead to the discovery of any fraud or omission in relation to the tax, shall at all reasonable times permit any person thereto authorised by the Commissioners to inspect the rolls, books, records, papers, documents and proceedings, and to take notes and extracts as he may deem necessary.

36 Delivery of returns.

36.—(1) In this section—

(a) notwithstanding anything contained in sections 6 and 12—

(i) a reference to a taxable gift is a reference to a taxable gift taken on or after the 28th day of February, 1974;

(ii) a reference to a taxable inheritance is a reference to a taxable inheritance taken on or after the 1st day of April, 1975; and

(iii) a reference, other than in subparagraph (i), to a gift or a taxable gift includes a reference to an inheritance or a taxable inheritance, as the case may be; and

(b) a reference to a donee includes a reference to a successor.

(2) Any person who is primarily accountable for the payment of tax by virtue of section 35 (1) shall, within three months after the relevant date referred to in subsection (5), deliver to the Commissioners a full and true return—

(a) of every gift in respect of which he is so primarily accountable and to which this subsection applies;

(b) of all the property comprised in such gift; and

(c) of an estimate of the market value of such property.

(3) Subsection (2) applies to a gift in the case where—

(a) the taxable value of the taxable gift taken by the donee from the disponer—

(i) (I) exceeds £120,000; and

(II) the donee is a spouse, child, or minor child of a deceased child, of the disponer;

(ii) (I) exceeds £12,000; and

(II) the donee is a lineal ancestor or a lineal descendant (other than a child, or a minor child of a deceased child) of the disponer;

(iii) (I) exceeds £8,000; and

(II) the donee is—

(A) a brother or a sister of the disponer; or

(B) a child of a brother or of a sister of the disponer; or

(iv) (I) exceeds £4,000; and

(II) the donee does not stand to the disponer in a relationship referred to in subparagraph (i) (II), (ii) (II) or (iii) (II);

(b) the taxable value of a taxable gift taken by a donee from the disponer increases the total taxable value of all taxable gifts taken by the donee from the disponer from an amount less than or equal to the amount specified in paragraph (a) (i) (I), (a) (ii) (I), (a) (iii) (I) or (a) (iv) (I), as the case may be, to an amount which exceeds the amount so specified;

(c) the total taxable value of all taxable gifts taken by the donee from the disponer exceeds the amount specified in paragraph (a) (i) (I), (a) (ii) (I), (a) (iii) (I) or (a) (iv) (I), as the case may be, and the donee takes a further taxable gift from the disponer; or

(d) the donee is required by notice in writing by the Commissioners to deliver a return.

(4) Any reference in subsection (3) (b) or (c) to the total taxable value of all taxable gifts includes a reference to the total aggregable value of all aggregable gifts and for the purpose of this section “aggregable gift” and “aggregable value” have the meanings assigned to them by paragraph 1 of Part I of the Second Schedule.

(5) For the purposes of this section, the relevant date shall be—

(a) the valuation date or three months after the passing of this Act, whichever is the later; or

(b) where the donee is required by notice in writing by the Commissioners to deliver a return, the date of the notice.

(6) Any person who is accountable for the payment of tax by virtue of subsection (2) or (9) of section 35 shall, if he is required by notice in writing by the Commissioners to do so, deliver a return to the Commissioners within such time, not being less than 30 days, as may be specified in the notice.

(7) Any accountable person shall, if he is so required by the Commissioners by notice in writing, deliver and verify to the Commissioners within such time, not being less than 30 days, as may be specified in the notice, a statement of such particulars together with such evidence as they require relating to any property, as may be relevant to the assessment of tax in respect of the gift.

(8) The Commissioners may by notice in writing require any accountable person to deliver to them within such time, not being less than 30 days, as may be specified in the notice, an additional return, if it appears to the Commissioners that a return made by that accountable person is defective in a material respect by reason of anything contained in or omitted from it.

(9) Where any accountable person who has delivered a return or an additional return is aware or becomes aware at any time that the return or additional return is defective in a material respect by reason of anything contained in or omitted from it, he shall, without application from the Commissioners and within three months of so becoming aware, deliver to them an additional return.

37 Signing of returns, etc.

37.—(1) A return or an additional return required to be delivered under this Act shall be signed by the accountable person who delivers the return or the additional return and shall include a declaration by the person signing it that the return or additional return is, to the best of his knowledge, information and belief, correct and complete.

(2) The Commissioners may require a return or an additional return to be made on oath.

(3) The Commissioners may, if they so think fit, accept a return or an additional return under this Act that has not been signed in accordance with this section and such return or additional return shall be deemed to be duly delivered to the Commissioners under this Act.

(4) A return, additional return, affidavit, additional affidavit, account or additional account, delivered under this Act, shall be made on a form provided by the Commissioners.

(5) Any oath or affidavit to be made for the purposes of this Act may be made—

(a) before the Commissioners;

(b) before any officer or person authorised by the Commissioners in that behalf;

(c) before any Commissioner for Oaths or any Peace Commissioner or Notary Public in the State; or

(d) at any place outside the State, before any person duly authorised to administer oaths there.

38 Affidavits and accounts.

38.—(1) In this section, “Inland Revenue affidavit” has the meaning assigned to it by section 22 (1) (n) of the Finance Act, 1894.

(2) The Inland Revenue affidavit required for an application for probate or letters of administration shall extend to the verification of a statement of the following particulars—

(a) details of all property in respect of which the grant of probate or administration is required and, in the case of a deceased person who died domiciled in the State, details of all property, wheresoever situate, the beneficial ownership of which, on his death, is affected—

(i) by his will;

(ii) by the rules for distribution on intestacy; or

(iii) by Part IX or section 56 of the Succession Act, 1965;

(b) details of any property which was the subject matter of a disposition inter vivos made by the deceased person where the date of the disposition was within two years prior to his death or of a donatio mortis causa;

(c) details of the inheritances arising under the will or intestacy of the deceased person or under Part IX or section 56 of the Succession Act, 1965, or under the analogous law of another territory, together with a copy of any such will;

(d) particulars of the inheritances (including the property comprised therein) other than those referred to in paragraphs (b) and (c), arising on the death of the deceased person;

(e) the name and address of each person who takes an inheritance on the death of the deceased person and his relationship to the disponer; and

(f) such other particulars as the Commissioners may require for the purposes of this Act.

(3) Where the interest of the deceased person was a limited interest and that person died on or after the 1st day of April, 1975, the trustee of the property in which the limited interest subsisted shall deliver an account which shall contain the following particulars—

(a) details of each inheritance arising on the death of the deceased person under the disposition under which the limited interest of the deceased person arose, including the name and address of each person taking such inheritance and his relationship to the disponer; and

(b) such other particulars as the Commissioners may require for the purposes of this Act.

(4) If at any time it shall appear that any material error or omission was made in an affidavit or account referred to in this section, the persons liable to deliver an affidavit or account shall be liable to deliver an additional affidavit or an additional account, correcting the error or omission.

39 Assessment of tax.

39.—(1) Assessments of tax under this Act shall be made by the Commissioners.

(2) If at any time it appears that for any reason an assessment was incorrect, the Commissioners may make a correcting assessment, which shall be substituted for the first-mentioned assessment.

(3) If at any time it appears that for any reason too little tax was assessed, the Commissioners may make an additional assessment.

(4) The Commissioners may serve notice in writing of the assessment of tax on any accountable person or, at the request of an accountable person, on his agent, or on the personal representative of an accountable person if that person is dead.

(5) Where the place of residence of the accountable person or of his personal representative is not known to the Commissioners they may publish in the Iris Oifigiúil a notice of the making of the assessment with such particulars thereof as they shall think proper and on the publication of the notice in the Iris Oifigiúil the accountable person or his personal representative, as the case may be, shall be deemed to have been served with the notice of the assessment on the date of such publication.

(6) Any assessment, correcting assessment or additional assessment under this section may be made by the Commissioners from any return or additional return delivered under the provisions of section 36 or from any other information in the possession of the Commissioners or from any one or more of these sources.

(7) The Commissioners, in making any assessment, correcting assessment or additional assessment, otherwise than from a return or an additional return which is satisfactory to them, shall make an assessment of such amount of tax as, to the best of their knowledge, information and belief, ought to be charged, levied and paid.

40 Computation of tax.

40.—The amount of tax payable shall be computed in accordance with the provisions of the Second Schedule.

PART VII Payment and Recovery of Tax

41 Payment of tax and interest on tax.

41.—(1) Tax shall be due and payable on the valuation date.

(2) Simple interest at the rate of one and one-half per cent. per month or part of a month, without deduction of income tax, shall be payable upon the tax from the valuation date to the date of payment of the tax and shall be chargeable and recoverable in the same manner as if it were part of the tax.

(3) Notwithstanding the provisions of subsection (2), interest shall not be payable on tax which is paid within three months of the valuation date, and where tax and interest, if any, thereon is paid within thirty days of the date of assessment thereof, interest shall not run on that tax for the period of thirty days from the date of the assessment or any part of that period.

(4) A payment on account of tax shall be applied—

(a) if there is interest due on tax at the date of the payment, to the discharge, so far as may be, of the interest so due; and

(b) if there is any balance of that payment remaining, to the discharge of so much tax as is equal to that balance.

(5) Subject to the provisions of subsections (2), (3) and (4), payments on account may be made at any time, and when a payment on account is made, interest shall not be chargeable in respect of any period subsequent to the date of such payment on so much of the payment on account as is to be applied in discharge of the tax.

(6) In the case of a gift which becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within two years prior to the death of the disponer, the provisions of this section shall have effect as if the references to the valuation date in subsections (1), (2) and (3) were references to the date of death of the disponer.

(7) In the case of a gift or inheritance taken prior to the date of the passing of this Act, the provisions of this section shall have effect as if the references to the valuation date in subsections (1), (2) and (3) were references to the date of the passing of this Act, or to the valuation date, whichever is the later.

(8) Where the value of a limited interest falls to be ascertained in accordance with rule 8 of the First Schedule as if it were a series of absolute interests, this section shall have effect, in relation to each of those absolute interests, as if the references to the valuation date in subsections (1), (2) and (3) were references to the date of the taking of that absolute interest.

(9) All sums due under the provisions of this Act shall be paid to the Accountant-General of the Commissioners.

42 Set-off of gift tax paid in respect of an inheritance.

42.—Where an amount has been paid in respect of gift tax (or interest thereon) on a gift which, by reason of the death of the disponer within two years after the date of the disposition under which the gift was taken, becomes an inheritance in respect of which inheritance tax is payable, the amount so paid shall be treated as a payment on account of the inheritance tax.

43 Payment of tax by instalments.

43.—(1) Subject to the payment of interest in accordance with section 41 and save as hereinafter provided, the tax due and payable in respect of a taxable gift or a taxable inheritance may, at the option of the person delivering the return or additional return, be paid by five equal yearly instalments, the first of which shall be due at the expiration of twelve months from the date on which the tax became due and payable and the interest on the unpaid tax shall be added to each instalment and shall be paid at the same time as such instalment.

(2) An instalment not due may be paid at any time before it falls due.

(3) In any case where and to the extent that the property of which the taxable gift or taxable inheritance consists is sold or compulsorily acquired, all unpaid instalments shall, unless the interest of the donee or successor is a limited interest, be paid on completion of the sale or compulsory acquisition and, if not so paid, shall be tax in arrear.

(4) This section shall not apply in any case where and to the extent to which a taxable gift or a taxable inheritance consists of personal property in which the donee, or the successor, or the transferee referred to in section 23 (1), as the case may be, takes an absolute interest.