Capital Acquisitions Tax Consolidation Act 2003

• (b) from the value ascertained in accordance with paragraph (a) a deduction is 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 is the taxable value, but no deduction is made under this paragraph in respect of any liability which is to be deducted in ascertaining the incumbrance-free value.

• (5) A deduction shall not be made under this section—

• (a) in respect of any liability the payment of which is contingent on the happening of some future event, but 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 is made in respect of the liability and such adjustment of tax as is appropriate is made; and such adjustment is made on the basis that the donee or successor had taken an interest in possession in the amount which is 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 can not 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 that donee or successor's 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), 6(2)(d), 11(1)(b) or 11(2)(c) in respect of—

• (i) any liability, costs or expenses due to a person resident outside the State (except 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,

except 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 section 106 or 107.

• (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) is 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 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 is to be allowed under section 89(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 of that liability 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 that person, 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 is 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 this section, in respect of a liability which is an incumbrance on any property, is, so far as possible, made against that property.

29 Contingencies affecting gifts or inheritances. [CATA 1976 s20]

29.—(1) 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 of the entitlement, may cease on the happening of a contingency (other than the revocation of the entitlement on the exercise by the disponer of such a power as is referred to in section 39), the taxable value of any taxable gift or taxable inheritance taken by that person on becoming so entitled to that benefit is 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 is, to that extent, adjusted (if, by so doing, a lesser amount of tax would be payable by such person) on the basis that such person had taken an interest in possession for a period certain which was equal to the actual duration of such person's beneficial entitlement in possession.

• (2) 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.

30 Valuation date for tax purposes. [CATA 1976 s21]

30.—(1) Subject to subsection (7), the valuation date of a taxable gift is the date of the gift.

• (2) The valuation date of a taxable inheritance is 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 that successor's 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 2 years prior to the death of the disponer, the valuation date of the inheritance is 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), is 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 that successor's 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 that successor's benefit or to or for the benefit of any person in right of the successor or on that successor's 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 means of part payment, advancement, payment on account or in any manner whatever, before any other part or parts of such inheritance, the appropriate valuation date for each part of the inheritance is 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 is 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 is 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 that person's agent, determine the valuation date of the whole or any part of any taxable inheritance and the valuation date so determined is 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 section 67 shall apply, with any necessary modifications, in relation to an appeal under this subsection as it applies in relation to an appeal against an assessment of tax.

PART 5 Provisions Relating to Gifts and Inheritances

31 Distributions from discretionary trusts. [CATA 1976 s22]

31.—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 the person, that person is 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 1 April 1975 and within 2 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, on or after the passing of this Act,

otherwise than for full consideration in money or money's worth paid by the person, that person is deemed to have taken an inheritance.

32 Dealings with future interests. [CATA 1976 s23]

32.—(1) In subsection (2), “benefit” includes the benefit of the cesser of a liability referred to in section 37.

• (2) 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 is 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 that remainderman under the disposition, and the transferee is the person primarily accountable for the payment of tax to the extent that the benefit is taken by that transferee.

• (3) Subsection (2) 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.

33 Release of limited interests, etc. [CATA 1976 s24]

33.—(1) In this section, “event” includes—

• (a) a death, and

• (b) the expiration of a specified period.

• (2) 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 is 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.

• (3) Subsection (2) 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 (2).

• (4) Notwithstanding anything contained in subsection (3), 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, subsection (2) has 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) is not a taxable gift or a taxable inheritance in so far as it consists of the whole or any part of the same property.

34 Settlement of an interest not in possession. [CATA 1976 s25]

34.—(1) In this section, “event” has the same meaning as it has in section 33(1).

• (2) Where any donee or successor takes a gift or an inheritance under a disposition made by such donee or successor then, if at the date of such disposition such donee or successor 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 28(9), and such event happens or such liability ceases during the continuance of the disposition, tax is charged on the taxable value of the taxable gift or taxable inheritance which such donee or successor would have taken on the happening of such event, or on the cesser of such liability, if no such disposition had been made.

• (3) Subsection (2) 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 disposition referred to in that subsection,

35 Enlargement of interests. [CATA 1976 s26]

35.—(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 that person 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 is 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 Schedule 1, 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 28(1), if the limited interest were taken, at the date referred to in subsection (1), as a taxable gift or taxable inheritance.

• (3) This section shall not apply where the second-mentioned interest is taken under the disposition under which the first-mentioned interest was created.

36 Dispositions involving powers of appointment. [CATA 1976 s27]

36.—(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 is 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 is 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 is the disposition under which the power was created and the person who created the power is the disponer.

37 Cesser of liabilities. [CATA 1976 s28]

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

• (2) The benefit of the cesser of—

• (a) a liability within the meaning of section 28(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,

is deemed to be a gift or an inheritance, as the case may be, which is 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 section 5(2)(b), be the sum the annual income of which would be equal to the annual value of the liability.

• (3) For the purposes of sections 6(1)(c), 6(2)(d), 11(1)(b) and 11(2)(c), the sum referred to in subparagraph (ii) of subsection (2) is deemed not to be situate in the State at the date of the gift or at the date of the inheritance.

38 Disposition enlarging value of property. [CATA 1976 s29]

38.—(1) In subsection (4), “company” means a private company within the meaning of section 27.

• (2) In this section, “property” does not include any property to which a donee or successor became beneficially entitled in possession prior to 28 February 1969.

• (3) Where the taking by any person of a beneficial interest in any property (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 (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 apply—

• (a) the increase in value so effected is 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 that donee or successor took the beneficial interest in the additional property,

• (b) the original property is 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 is 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 is, for the purpose of determining its market value, 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 is ascertained as being so much of the market value of such aggregate as may reasonably be ascribed to that part.

• (4) For the purpose of this section, the donee or successor is deemed to be beneficially entitled in possession to any property not-withstanding that within 5 years prior to such a disposition as is referred to in subsection (3) that donee or successor has divested such donee or successor of such property, or any part of such property, otherwise than for full consideration in money or money's worth or has disposed of it to a company of which such donee or successor is, at any time within that period of 5 years, deemed to have control within the meaning of section 27(4)(b).

39 Gift subject to power of revocation. [CATA 1976 s30]

39.—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 such disponer the power to revoke the benefit, such person is, for the purposes of this Act, 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.

40 Free use of property, free loans, etc. [CATA 1976 s31]

40.—(1) In subsections (2) and (4), “relevant period”, in relation to any use, occupation or enjoyment of property, means the period of 12 months ending on 31 December in each year.

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

• (3) A gift referred to in subsection (2) is 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 (2) 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 (2) is 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 (2) 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 1 April 1975 and within 2 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 (2), (3) and (4) shall apply 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 (2) and (4), in relation to the use, occupation or enjoyment of property, means the period of 12 months ending on 31 December in any year.

• (6) For the purposes of sections 6(1)(c), 6(2)(d), 11(1)(b) and 11(2)(c), the sum referred to in subsection (3) is deemed not to be situate in the State at the date of the gift or at the date of the inheritance.

41 When interest in assurance policy becomes interest in possession. [CATA 1976 s32]

41.—(1) For the purposes of this Act, an interest in a policy of assurance on human life is deemed to become an interest in possession 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, but 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 is deemed to have come into possession to the extent of such payment.

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

42 Provisions to apply where section 98 of Succession Act 1965 has effect. [CATA 1976 s33]

42.—(1) If, on the death of a testator and by virtue 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 is not 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 is deemed for the purposes of inheritance tax to derive the benefit from the testator, as disponer.

43 Disposition by or to a company. [CATA 1976 s34]

43.—(1) In this section—

“company” means a private company within the meaning of section 27;

“market value” means—

• (a) in the case of a person's beneficial interest in shares and entitlements, the market value of that interest on the date of the payment, disposition, gift or inheritance, as the case may be, ascertained by reference to the market value on that date of the shares and entitlements in which the interest subsists, and

• (b) in the case of a share in which a beneficial interest subsists, the market value of that share ascertained in the manner described in section 27 as if, on the date on which the market value is to be ascertained, it formed an apportioned part of the market value of a group of shares consisting of all the shares in the company issued and outstanding at that date;

“share” has the same meaning as it has in section 27;

“specified amount”, in relation to a person's beneficial interest in shares and entitlements, means—

• (a) in the case of consideration paid, or a disposition made, by the company, a nil amount or, if greater, the amount by which the market value of the beneficial interest was decreased as a result of the payment of the consideration or the making of the disposition, and

• (b) in the case of consideration, or a gift, or an inheritance taken by the company, a nil amount or, if greater, the amount by which the market value of the beneficial interest was increased as a result of the taking of the consideration, gift or inheritance.

• (2) For the purposes of this Act—

• (a) consideration paid by, or a disposition made by, a company is 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 is 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 specified amounts relating to their respective beneficial interests in the shares and entitlements bear to each other.

• (3) For the purposes of subsection (2) all acts, omissions and receipts of the company are deemed to be those of the beneficial owners of the shares and entitlements, referred to in subsection (2), 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 (2), is itself a company, the beneficial owners of the shares and entitlements, referred to in subsection (2), in the latter company, are 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 (2) are held in trust and have no ascertainable beneficial owners, consideration paid, or a disposition made, by the company are deemed to be paid or made by the disponer who made the disposition under which the shares and entitlements are so held in trust.

44 Arrangements reducing value of company shares. [FA 1989 s90(1) to (10) and (12)]

44.—(1) In this section—

“arrangement” means an arrangement which is made on or after 25 January 1989, and includes—

• (a) any act or omission by a person or by the trustees of a disposition,

• (b) any act or omission by any person having an interest in shares in a company,

• (c) the passing by any company of a resolution, or

• (d) any combination of acts, omissions or resolutions referred to in paragraphs (a), (b) and (c);

“company” means a private company within the meaning of section 27;

“event” includes—

• (a) a death, and

• (b) the expiration of a specified period;

“related shares” means the shares in a company, the market value of which shares is increased by any arrangement;

“related trust” has the meaning assigned to it by subsections (3) and (5);

“specified amount” means an amount equal to the difference between—

• (a) the market value of shares in a company immediately before an arrangement is made, and ascertained under section 27 as if each share were a share in a company controlled at that time by the disponer concerned and that share was the absolute property of that disponer at that time, and

• (b) the market value of those shares, or of property representing those shares, immediately after the arrangement is made, and ascertained under section 26,

and such specified amount is deemed to be situate where the company is incorporated.

• (2) In this section, a reference to a company controlled by the disponer concerned is a reference to a company that is under the control of any one or more of the following, that is, that disponer, the relatives of that disponer, nominees of relatives of that disponer, and the trustees of a settlement whose objects include that disponer or relatives of that disponer, and for the purposes of this section, a company which is so controlled by that disponer is regarded as being itself a relative of that disponer.

• (3) Where—

• (a) a person has an absolute interest in possession in shares in a company, and

• (b) any arrangement results in the market value of those shares, or of property representing those shares, immediately after that arrangement is made, being less than it would be but for that arrangement,

then, tax is payable in all respects as if a specified amount which relates to that arrangement were a benefit taken, immediately after that arrangement is made, from that person, as disponer, by—

• (i) the beneficial owners of the related shares in that company, and

• (ii) so far as the related shares in that company are held in trust (in this section referred to as the “related trust”) and have no ascertainable beneficial owners, by the disponer in relation to that related trust as if, immediately after that arrangement is made, that disponer was the absolute beneficial owner of those related shares,

in the same proportions as the market value of the related shares, which are beneficially owned by them or are deemed to be so beneficially owned, is increased by that arrangement.

• (4) Where—

• (a) an interest in property is limited by the disposition creating it to cease on an event,

• (b) immediately before the making of an arrangement to which paragraph (c) relates, the property includes shares in a company, and

• (c) the arrangement results in the market value of those shares, or of property representing those shares, immediately after that arrangement is made, being less than it would be but for that arrangement,

then, tax is payable under that disposition in all respects—

• (i) where the interest in property is an interest in possession, as if such property included a specified amount which relates to that arrangement,

• (ii) where the interest in property is not an interest in possession, as if it were an interest in possession and such property included a specified amount which relates to that arrangement, and

• (iii) as if the event on which the interest was limited to cease under that disposition had happened, to the extent of the specified amount, immediately before that arrangement is made.

• (5) Where—

• (a) shares in a company are, immediately before the making of an arrangement to which paragraph (b) relates, subject to a discretionary trust under or in consequence of any disposition, and

• (b) the arrangement results in those shares, or property representing those shares, remaining subject to that discretionary trust but, immediately after that arrangement is made, the market value of those shares, or of property representing those shares, is less than it would be but for that arrangement,

then, tax shall be payable under that disposition in all respects as if a specified amount, which relates to that arrangement, were a benefit taken immediately after that arrangement is made—

• (i) by the beneficial owners of the related shares in that company, and

• (ii) so far as the related shares in that company are held in trust (in this section referred to as the “related trust”) and have no ascertainable beneficial owners, by the disponer in relation to that related trust as if, immediately after that arrangement is made, that disponer was the absolute beneficial owner of those related shares,

in the same proportions as the market value of the related shares, which are beneficially owned by them or are deemed to be so beneficially owned, is increased by that arrangement.

• (6) Subsections (3), (4) and (5) shall not prejudice any charge for tax in respect of any gift or inheritance taken under any disposition on or after the making of an arrangement referred to in those subsections and comprising shares in a company, or property representing such shares.

• (7) Where shares in a company, which are held in trust under a disposition made by any disponer, are related shares by reason of any arrangement referred to in this section, any gift or inheritance taken under the disposition on or after the arrangement is made and comprising those related shares, or property representing those related shares, are deemed to be taken from that disponer.

• (8) In relation to the tax due and payable in respect of any gift or inheritance taken under paragraph (ii) of subsection (3) or paragraph (ii) of subsection (5), and notwithstanding any other provision of this Act—

• (a) the disponer in relation to the related trust is not a person primarily accountable for the payment of such tax, and

• (b) a person who is a trustee of the related trust concerned for the time being at the date of the gift or at the date of the inheritance, or at any date subsequent to that date, is so primarily accountable.

• (9) A person who is accountable for the payment of tax in respect of any specified amount, or part of a specified amount, taken as a gift or an inheritance under this section shall, for the purpose of paying the tax, or raising the amount of the tax when already paid, have power, whether the related shares are or are not vested in that person, to raise the amount of such tax and any interest and expenses properly paid or incurred by that person in respect of such tax, by the sale or mortgage of, or a terminable charge on, the related shares in the relevant company.

• (10) Tax due and payable in respect of a taxable gift or a taxable inheritance taken under this section shall be and remain a charge on the related shares in the relevant company.

• (11) Where related shares are subject to a discretionary trust immediately after an arrangement is made in accordance with the provisions of this section, the amount by which the market value of such shares is increased by such arrangement is property for the purposes of a charge for tax arising by reason of section 15.

• (12) Where, immediately after and as a result of an arrangement, shares in a company have been redeemed, the redeemed shares are, for the purpose of the references to property representing shares in subsection (1) and subsection (3), (4) or (5), except a reference in relation to which the redeemed shares are actually represented by property, deemed, immediately after the arrangement, being an arrangement made on or after 6 May 1993, to be represented by property, and the market value of the property so deemed to represent the redeemed shares is deemed to be nil.

PART 6 Returns and Assessments

45 Accountable persons. [CATA 1976 s35]

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

• (a) except where provided in paragraph (b), the donee or successor, as the case may be, and

• (b) in the case referred to in section 32(2), 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 (other than a disponer in relation to a disposition where the date of the disposition was prior to 28 February 1974), and

• (ii) every trustee, guardian, committee, personal representative, agent or other person in whose care any property comprised in the gift or the income from such property is placed at the date of the gift or at any time after that date 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) (i) in the case of an inheritance, taken on or before the death of the disponer, the disponer (other than a disponer in relation to a disposition, where the date of the disposition was prior to 1 May 1989), and

• (ii) in the case of any other inheritance, every trustee, guardian, committee, personal representative, agent or other person in whose care any property comprised in the inheritance or the income from such property is placed at the date of the inheritance or at any time after that date 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.

• (3) No person referred to in subsection (2)(a)(ii) or (b)(ii) is (unless that person is a person who is also primarily accountable under subsection (1)) 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 that person, or which, but for that person's own neglect or default, would have been received by that person or to which that person is beneficially entitled in possession.

• (4) A person who acts solely in the capacity of an agent is not 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 that person held, or which came into that person's possession, at any time after the serving on that person 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 that person of that person's 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 49, but the liability of a personal representative under this subsection shall not exceed the amount for which the accountable person, of whom that person 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 that person in respect of tax from the person primarily accountable for that tax unless—

• (a) the latter person is the donee or successor referred to in paragraph (a) of subsection (1) and the interest taken by that latter person is a limited interest, or

• (b) in the case referred to in paragraph (b) of subsection (1), the latter person is the transferee and the interest taken by the remainderman is a limited interest.

• (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 that person, to raise the amount of such tax and any interest and expenses properly paid or incurred by that person in respect thereof, by the sale or mortgage of, or a terminable charge on, that property or any part of that property.

• (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)(ii) 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 at that time become accountable for the payment of tax in respect of the first gift or inheritance.

• (10) 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 that person's accountability in respect of the first gift or inheritance.

• (12) Every public officer having in such person's custody any rolls, books, records, papers, documents, or proceedings, the inspection of which 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 authorised by the Commissioners to inspect the rolls, books, records, papers, documents and proceedings, and to take notes and extracts as that person may deem necessary.

46 Delivery of returns [CATA 1976 s36]

46.—(1) In this section—

• (a) notwithstanding anything contained in sections 6 and 11 a reference, other than in subsection (13) or (14), 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) Subject to paragraph (e) of section 21, any person who is primarily accountable for the payment of tax by virtue of section 45(1), or by virtue of paragraph (c) of section 16 shall, within 4 months after the relevant date referred to in subsection (5)—

• (a) deliver to the Commissioners a full and true return of—

• (i) every gift in respect of which that person is so primarily accountable,

• (ii) all the property comprised in such gift on the valuation date,

• (iii) an estimate of the market value of such property on the valuation date, and

• (iv) such particulars as may be relevant to the assessment of tax in respect of such gift;

• (b) notwithstanding section 49, make on that return an assessment of such amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid on that valuation date, and

• (c) duly pay the amount of such tax.

• (3) Subsection (2)(c) shall be complied with—

• (a) where the tax due and payable in respect of any part of the gift is being paid by instalments under section 54, by the due payment of—

• (i) an amount which includes any instalment of tax which has fallen due prior to or on the date of the assessment of the tax referred to in subsection (2)(b), and

• (ii) any further instalments of such tax on the due dates in accordance with that section;

• (b) where the tax due and payable is inheritance tax which is being wholly or partly paid by the transfer of securities to the Minister for Finance under section 58, by—

• (i) delivering to the Commissioners with the return an application to pay all or part of the tax by such transfer,

• (ii) completing the transfer of the securities to the Minister for Finance within such time, not being less than 30 days, as may be specified by the Commissioners by notice in writing, and

• (iii) duly paying the excess, if any, of the amount of the tax referred to in subsection (2)(b), or in paragraph (a)(i), over the nominal face value of the securities tendered in payment of the tax in accordance with subparagraph (i).

• (4) Subsection (2) applies to a charge for tax arising by reason of section 15 and to any other gift where—

• (a) the aggregate of the taxable values of all taxable gifts taken by the donee on or after 5 December 1991, which have the same group threshold (as defined in Schedule 2) as that other gift, exceeds an amount which is 80 per cent of the threshold amount (as defined in Schedule 2) which applies in the computation of tax on that aggregate, or

• (b) the donee or, in a case to which section 32(2) applies, the transferee (within the meaning of, and to the extent provided for by, that section) is required by notice in writing by the Commissioners to deliver a return,

and for the purposes of this subsection, a reference to a gift includes a reference to a part of a gift or to a part of a taxable gift, as the case may be.

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

• (a) the valuation date, or

• (b) where the donee or, in a case to which section 32(2) applies, the transferee (within the meaning of, and to the extent provided for by, that section) 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 45 shall, if that person is required by notice in writing by the Commissioners to do so, comply with paragraphs (a), (b) and (c) of subsection (2) (as if that person were a person primarily accountable for the payment of tax by virtue of section 45(1)) within such time, not being less than 30 days, as may be specified in the notice.

• (7)
• (a) Any accountable person shall, if that person 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—

• (i) a statement (where appropriate, on a form provided, or approved of, by them) of such particulars relating to any property, and

• (ii) such evidence as they require,

as may, in their opinion, be relevant to the assessment of tax in respect of the gift.

• (b) The Commissioners may authorise a person to inspect—

• (i) any property comprised in a gift, or

• (ii) any books, records, accounts or other documents, in whatever form they are stored, maintained or preserved, relating to any property as may in their opinion be relevant to the assessment of tax in respect of a gift,

and the person having the custody or possession of that property, or of those books, records, accounts or documents, shall permit the person so authorised to make that inspection at such reasonable times as the Commissioners consider necessary.

• (8) The Commissioners may by notice in writing require any accountable person to—

• (a) 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,

• (b) notwithstanding section 49, make on that additional return an assessment of such amended amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid on the relevant gift, and

• (c) duly pay the outstanding tax, if any, for which that person is accountable in respect of that gift,

and

• (i) the requirements of subparagraphs (ii), (iii) and (iv) of subsection (2)(a) shall apply to such additional return required by virtue of paragraph (a), and

• (ii) subsection (3) shall, with any necessary modifications, apply to any payment required by virtue of paragraph (c).

• (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, that person shall, without application from the Commissioners and within 3 months of so becoming aware—

• (a) deliver to them an additional return,

• (b) notwithstanding section 49, make on that additional return an assessment of such amended amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid on the relevant gift, and

• (c) duly pay the outstanding tax, if any, for which that person is accountable in respect of that gift,

and

• (i) the requirements of subparagraphs (ii), (iii) and (iv) of subsection (2)(a) shall apply to such additional return required by virtue of paragraph (a), and

• (ii) subsection (3) shall, with any necessary modifications, apply to any payment required by virtue of paragraph (c).

• (10) Any amount of tax payable by an accountable person in respect of an assessment of tax made by that accountable person on a return delivered by that accountable person (other than an amount of that tax payable by the transfer of securities to the Minister for Finance under section 56) shall accompany the return and be paid to the Collector.

• (11) Any assessment or payment of tax made under this section shall include interest on tax payable in accordance with section 51.

• (12) The Commissioners may by notice in writing require any person to deliver to them within such time, not being less than 30 days, as may be specified in the notice, a full and true return showing details of every taxable gift (including the property comprised in such gift) taken by that person during the period specified in the notice or, as the case may be, indicating that that person has taken no taxable gift during that period.

• (13) As respects a taxable gift to which this subsection applies, any accountable person who is a disponer shall within 4 months of the valuation date deliver to the Commissioners a full and true return—

• (a) of all the property comprised in such gift on the valuation date,

• (b) of an estimate of the market value of such property on the valuation date, and

• (c) of such particulars as may be relevant to the assessment of tax in respect of the gift.

• (14) Subsection (13) applies to a taxable gift, in the case where—

• (a) the taxable value of the taxable gift exceeds an amount which is 80 per cent of the group threshold (as defined in Schedule 2) which applies in relation to that gift for the purposes of the computation of the tax on that gift,

• (b) the taxable value of the taxable gift taken by the donee from the disponer increases the total taxable value of all taxable gifts and taxable inheritances taken on or after 5 December 1991 by the donee from the disponer from an amount less than or equal to the amount specified in paragraph (a) to an amount which exceeds the amount so specified, or

• (c) the total taxable value of all taxable gifts and taxable inheritances taken on or after 5 December 1991 by the donee from the disponer exceeds the amount specified in paragraph (a) and the donee takes a further taxable gift from the disponer.

• (15) Where, under or in consequence of any disposition made by a person who is living and domiciled in the State at the date of the disposition, property becomes subject to a discretionary trust, the disponer shall within 4 months of the date of the disposition deliver to the Commissioners a full and true return of—

• (a) the terms of the discretionary trust,

• (b) the names and addresses of the trustees and objects of the discretionary trust, and

• (c) an estimate of the market value at the date of the disposition of the property becoming subject to the discretionary trust.

47 Signing of returns, etc. [CATA 1976 s37]

47.—(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 that person's 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 is deemed to be duly delivered to the Commissioners under this Act.

• (4)
• (a) A return or additional return delivered under this Act shall—

• (i) be made on a form provided, or approved of, by the Commissioners, or

• (ii) except in a case to which subsection (2) relates but in a case where subsection (3) applies, be in a form approved of by the Commissioners and delivered by any electronic, photographic or other process approved of by them and in circumstances where the use of such process has been agreed by them and subject to such conditions as they may impose.

• (b) An affidavit, additional affidavit, account or additional account, delivered under this Act, shall be made on a form provided, or approved of, 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 in that place.

48 Affidavits and accounts. [CATA 1976 s38]

48.—(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, wherever situate, the beneficial ownership of which, on that person's death, is affected—

• (i) by that person's 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 2 years prior to that person's 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 in such inheritances) 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 that person's 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 date of the passing of this Act, 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 that person's 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.

49 Assessment of tax. [CATA 1976 s39; FA 1989 s75]

49.—(1) Subject to section 46, 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 that accountable person's 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 that accountable person's personal representative is not known to the Commissioners they may publish in Iris Oifigiúil a notice of the making of the assessment with such particulars of that assessment as they shall think proper and on the publication of the notice in Iris Oifigiúil the accountable person or that accountable person's personal representative, as the case may be, is 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 section 46 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 (including information received from a member of the Garda Síochána) and belief, ought to be charged, levied and paid.

• (8) Nothing in section 46 shall preclude the Commissioners from making an assessment of tax, a correcting assessment of tax, or an additional assessment of tax, under the provisions of this section.

50 Computation of tax. [CATA 1976 s40 (part)]

50.—Subject to sections 18 and 23, the amount of tax payable shall be computed in accordance with Schedule 2.

PART 7 Payment and Recovery of Tax, Interest and Penalties

51 Payment of tax and interest on tax. [CATA 1976 s41(1), (2), (2A) and (3) to (6) and (8); FA 1989 s76(2)]

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

• (2) Simple interest at the rate of 0.0322 per cent per day or part of a day, without deduction of income tax, is payable on the tax from the valuation date to the date of payment of the tax and is chargeable and recoverable in the same manner as if it were part of the tax.

• (3) Notwithstanding subsection (2), interest is not payable on the tax—

• (a) to the extent to which section 89(4)(a) applies, for the duration of the period from the valuation date to the date the agricultural value ceases to be applicable,

• (b) to the extent to which section 77(3) and (4) applies, for the duration of the period from the valuation date to the date the exemption ceases to apply,

• (c) to the extent to which section 101(2) applies, for the duration of the period from the valuation date to the date the reduction which would otherwise fall to be made under section 92 ceases to be applicable,

• (d) to the extent to which section 78(6) applies, for the duration of the period from the valuation date to the date the exemption ceases to apply,

• (e) to the extent to which section 86(6) or (7) applies, for the duration of the period from the valuation date to the date the exemption ceases to apply.

• (4) Notwithstanding subsection (2), interest is not payable on tax which is paid within 3 months of the valuation date, and where tax and interest, if any, on that tax is paid within 30 days of the date of assessment of that tax, interest shall not run on that tax for the period of 30 days from the date of the assessment or any part of that period, but, in relation to an assessment of tax made by an accountable person on a return delivered by that accountable person, interest is not payable on tax which is paid within 4 months of the valuation date.

• (5) 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,

and a payment by an accountable person of tax is treated as a payment on account of tax for the purposes of this section, notwithstanding that the payment may be conditional or that the assessment of tax is incorrect.

• (6) Subject to subsections (2), (4) and (5), payments on account may be made at any time, and when a payment on account is made, interest is not 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.

• (7) 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 2 years prior to the death of the disponer, this section has effect as if the references to the valuation date in subsections (1), (2), (3) and (4) were references to the date of death of the disponer.

• (8) Where the value of a limited interest is to be ascertained in accordance with rule 8 of Schedule 1 as if it were a series of absolute interests, this section has effect, in relation to each of those absolute interests, as if the references to the valuation date in subsections (1), (2), (3) and (4) were references to the date of the taking of that absolute interest.

52 Set-off of gift tax paid in respect of an inheritance. [CATA 1976 s42]

52.—Where an amount has been paid in respect of gift tax (or interest on such gift tax) on a gift which, by reason of the death of the disponer within 2 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 is treated as a payment on account of the inheritance tax.

53 Surcharge for undervaluation of property. [FA 1989 s79]

53.—(1) In this section “ascertained value” means the market value subject to the right of appeal under section 66 or section 67.

• (2) Where—

• (a) an accountable person delivers a return, and

• (b) the estimate of the market value of any asset comprised in a gift or inheritance and included in that return, when expressed as a percentage of the ascertained value of that asset, is within any of the percentages specified in column (1) of the Table to this section,

then the amount of tax attributable to the property which is that asset is increased by a sum (in this section referred to as the “surcharge”) equal to the corresponding percentage, set out in column (2) of that Table opposite the relevant percentage in column (1), of that amount of tax.