Capital Acquisitions Tax Consolidation Act 2003

• (ii) a person in relation to whom the disponer stands in loco parentis,

for support, maintenance or education, or

• (b) by a person who is in relation to the disponer a dependent relative under section 466 of the Taxes Consolidation Act 1997, for support or maintenance,

is not a gift or an inheritance, where the provision of such support, maintenance or education, or such support or maintenance—

• (i) is such as would be part of the normal expenditure of a person in the circumstances of the disponer, and

• (ii) is reasonable having regard to the financial circumstances of the disponer.

• (3)
• (a) In this subsection “incapacitated individual”, “trust funds” and “qualifying trust” have the meanings assigned to them, respectively, by section 189A (inserted by the Finance Act 1999) of the Taxes Consolidation Act 1997.

• (b) The receipt by an incapacitated individual of the whole or any part of trust funds which are held on a qualifying trust, or of the income from such a qualifying trust, is not a gift or an inheritance.

• (4) The receipt by a minor child of the disponer of money or money's worth for support, maintenance or education, at a time when the disponer and the other parent of that minor child are dead, is not a gift or an inheritance where the provision of such support, maintenance or education—

• (a) is such as would be part of the normal expenditure of a person in the circumstances of the disponer immediately prior to the death of the disponer, and

• (b) is reasonable having regard to the financial circumstances of the disponer immediately prior to the death of the disponer.

83 Exemption where disposition was made by the donee or successor. [CATA 1976 s59]

83.—(1) In this section, “company” means a body corporate (wherever incorporated), other than a private company within the meaning of section 27.

• (2) Tax is not chargeable on a gift or an inheritance taken by the donee or successor under a disposition made by that donee or successor.

• (3) Where, at the date of the gift, 2 companies are associated in the manner described in subsection (4), a gift taken by one of them under a disposition made by the other is deemed to be a gift to which subsection (2) applies.

• (4) For the purposes of subsection (3), 2 companies shall be regarded as associated if—

• (a) one company would be beneficially entitled to not less than 90 per cent of any assets of the other company available for distribution to the owners of its shares and entitlements of the kind referred to in section 43(1) on a winding up, or

• (b) a third company would be beneficially entitled to not less than 90 per cent of any assets of each of them available as in paragraph (a).

84 Exemption relating to qualifying expenses of incapacitated persons. [CATA 1976 s59A]

84.—(1) In this section, “qualifying expenses” means expenses relating to medical care including the cost of maintenance in connection with such medical care.

• (2) A gift or inheritance which is taken exclusively for the purpose of discharging qualifying expenses of an individual who is permanently incapacitated by reason of physical or mental infirmity is, to the extent that the Commissioners are satisfied that it has been or will be applied to such purpose, exempt from tax and is not taken into account in computing tax.

85 Exemption relating to retirement benefits. [CATA 1976 s59B]

85.—(1) In this section, “retirement fund”, in relation to an inheritance taken on the death of a disponer, means an approved retirement fund or an approved minimum retirement fund, within the meaning of section 784A or 784C of the Taxes Consolidation Act 1997, being a fund which is wholly comprised of all or any of the following, that is—

• (a) property which represents in whole or in part the accrued rights of the disponer, or of a predeceased spouse of the disponer, under an annuity contract or retirement benefits scheme approved by the Commissioners for the purposes of Chapter 1 or Chapter 2 of Part 30 of that Act,

• (b) any accumulations of income of such property, or

• (c) property which represents in whole or in part those accumulations.

• (2) The whole or any part of a retirement fund which is comprised in an inheritance which is taken on the death of a disponer is exempt from tax in relation to that inheritance and the value of that inheritance is not taken into account in computing tax, where—

• (a) the disposition under which the inheritance is taken is the will or intestacy of the disponer, and

• (b) the successor is a child of the disponer and had attained 21 years of age at the date of that disposition.

86 Exemption relating to certain dwellings. [CATA 1976 s59C]

86.—(1) In this section—

“dwelling-house” means—

• (a) a building or part (including an appropriate part within the meaning of section 5(5)) of a building which was used or was suitable for use as a dwelling, and

• (b) the curtilage of the dwelling-house up to an area (exclusive of the site of the dwelling-house) of one acre but if the area of the curtilage (exclusive of the site of the dwelling-house) exceeds one acre then the part which comes within this definition is the part which, if the remainder were separately occupied, would be the most suitable for occupation and enjoyment with the dwelling-house;

“relevant period”, in relation to a dwelling-house comprised in a gift or inheritance, means the period of 6 years commencing on the date of the gift or the date of the inheritance.

• (2) In this section any reference to a donee or successor is construed as including a reference to the transferee referred to in section 32(2).

• (3) Subject to subsections (4), (5), (6) and (7), a dwelling-house comprised in a gift or inheritance which is taken by a donee or successor who—

• (a) has continuously occupied as that donee or successor's only or main residence—

• (i) that dwelling-house throughout the period of 3 years immediately preceding the date of the gift or the date of the inheritance, or

• (ii) where that dwelling-house has directly or indirectly replaced other property, that dwelling-house and that other property for periods which together comprised at least 3 years falling within the period of 4 years immediately preceding the date of the gift or the date of the inheritance,

• (b) is not, at the date of the gift or at the date of the inheritance, beneficially entitled to any other dwelling-house or to any interest in any other dwelling-house, and

• (c) continues to occupy that dwelling-house as that donee or successor's only or main residence throughout the relevant period,

is exempt from tax in relation to that gift or inheritance, and the value of that dwelling-house is not to be taken into account in computing tax on any gift or inheritance taken by that person unless the exemption ceases to apply under subsection (6) or (7).

• (4) The condition in paragraph (c) of subsection (3) shall not apply where the donee or successor has attained the age of 55 years at the date of the gift or at the date of the inheritance.

• (5) For the purpose of paragraph (c) of subsection (3), the donee or successor is deemed to occupy the dwelling-house concerned as that donee or successor's only or main residence throughout any period of absence during which that donee or successor worked in an employment or office all the duties of which were performed outside the State.

• (6) If a dwelling-house exempted from tax by virtue of subsection (3) is sold or disposed of, either in whole or in part, within the relevant period, and before the death of the donee or successor (not being a donee or successor who had attained the age of 55 years at the date of the gift or inheritance), the exemption referred to in that subsection shall cease to apply to such dwelling-house unless the sale or disposal occurs in consequence of the donee or successor requiring long-term medical care in a hospital, nursing home or convalescent home.

• (7) The exemption referred to in subsection (3) shall cease to apply to a dwelling-house, if at any time during the relevant period and—

• (a) before the dwelling-house is sold or disposed of, and

• (b) before the death of the donee or successor,

the condition specified in paragraph (c) of subsection (3) has not been complied with unless that non-compliance occurs in consequence of the donee or successor requiring long-term medical care in a hospital, nursing home or convalescent home, or in consequence of any condition imposed by the employer of the donee or successor requiring the donee or successor to reside elsewhere.

• (8) Where a dwelling-house exempted from tax by virtue of subsection (3) (in this section referred to as the “first-mentioned dwelling-house”) is replaced within the relevant period by another dwelling-house, the condition specified in paragraph (c) of subsection (3) is treated as satisfied if the donee or successor has occupied as that donee or successor's only or main residence the first-mentioned dwelling-house, that other dwelling-house and any dwelling-house which has within the relevant period directly or indirectly replaced that other dwelling-house for periods which together comprised at least 6 years falling within the period of 7 years commencing on the date of the gift or the date of the inheritance.

• (9) Any period of absence which would satisfy the condition specified in paragraph (c) of subsection (3) in relation to the first-mentioned dwelling-house shall, if it occurs in relation to any dwelling-house which has directly or indirectly replaced that dwelling-house, likewise satisfy that condition as it has effect by virtue of subsection (8).

• (10) Subsection (6) shall not apply to a case falling within subsection (8), but the extent of the exemption under this section in such a case shall, where the donee or successor had not attained the age of 55 years at the date of the gift or at the date of the inheritance, not exceed what it would have been had the replacement of one dwelling-house by another referred to in subsection (8), or any one or more of such replacements, taken place immediately prior to that date.

87 Exemption of certain benefits. [FA 1982 s98]

87.—Where a gift or an inheritance is taken, by direction of the disponer, free of tax, the benefit taken is deemed to include the amount of tax chargeable on such gift or inheritance but not the amount of tax chargeable on such tax.

88 Exemption of certain transfers from capital acquisitions tax following the dissolution of a marriage. [FA 1997 s142(1) and (2)]

88.—(1) Notwithstanding any other provision of this Act, a gift or inheritance taken by virtue or in consequence of an order to which this subsection applies by a spouse who was a party to the marriage concerned is exempt from tax and is not taken into account in computing tax.

• (2) Subsection (1) applies—

• (a) to a relief order or an order under section 25 of the Family Law Act 1995, made, following the dissolution of a marriage, or

• (b) to a maintenance pending relief order made, following the granting of leave under section 23(3) of the Family Law Act 1995, to a spouse whose marriage has been dissolved,

• (c) to an order referred to in section 41 (a) of the Family Law Act 1995, or an order under section 42(1) of that Act made in addition to or instead of an order under section 41 (a) of that Act, in favour of a spouse whose marriage has been dissolved,

• (d) to an order under Part III of the Family Law (Divorce) Act 1996, and

• (e) to an order or other determination to like effect, made on or after 10 February 2000, which is analogous to an order referred to in paragraph (a), (b), (c) or (d), of a court under the law of another territory made under or in consequence of the dissolution of a marriage, being a dissolution that is entitled to be recognised as valid in the State.

PART 10 Reliefs

Chapter 1 Agricultural relief

89 Provisions relating to agricultural property. [CATA 1976 s19]

89.—(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 with such farm buildings, farm houses and mansion houses) as are of a character appropriate to the property, and farm machinery, livestock and bloodstock on such property;

“agricultural value” means the market value of agricultural property reduced by 90 per cent of that value;

“farmer” in relation to a donee or successor, means an individual who is domiciled in the State and in respect of whom not less than 80 per cent of the market value of the property to which the individual is beneficially entitled in possession is represented by the market value of property in the State which consists of agricultural property, and, for the purposes of this definition—

• (a) no deduction is made from the market value of property for any debts or encumbrances, and

• (b) an individual is deemed to be beneficially entitled in possession to—

• (i) an interest in expectancy, notwithstanding the definition of “entitled in possession” in section 2, and

• (ii) property which is subject to a discretionary trust under or in consequence of a disposition made by the individual where the individual is an object of the trust.

• (2) Except where provided in subsection (6), 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, section 28 (other than subsection (7)(b) of that section) shall apply in relation to agricultural property as it applies 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 is deducted and that proportion is 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 is deducted and that proportion is 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 of that taxable gift or taxable inheritance will be invested in agricultural property and such condition is complied with within 2 years after the date of the gift or the date of the inheritance, then the gift or inheritance is 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)
• (a) The agricultural value shall cease to be applicable to agricultural property, other than crops, trees or underwood, if and to the extent that such property, or any agricultural property which directly or indirectly replaces such property—

• (i) is sold or compulsorily acquired within the period of 6 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 within 6 years of the compulsory acquisition, by other agricultural property,

and tax is chargeable in respect of the gift or inheritance as if the property were not agricultural property, but this paragraph shall not apply 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 is deemed not to be a sale or a compulsory acquisition for the purposes of paragraph (a).

• (c) The agricultural value in relation to a gift or inheritance referred to in subsection (2) shall cease to be applicable to agricultural property, other than crops, trees or underwood, if the donee or successor is not resident in the State for any of the 3 years of assessment immediately following the year of assessment in which the valuation date falls.

• (5) 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, is deemed to have been comprised in that gift or inheritance at the date of the gift or at the date of the inheritance.

• (6) Subsection (2) shall apply 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 from that subsection.

• (7) In this section, any reference to a donee or successor includes a reference to the transferee referred to in section 32(2).

Chapter 2 Business relief

90 Interpretation (Chapter 2). [FA 1994 s124]

90.—(1) In this Chapter—

“agricultural property” has the meaning assigned to it by section 89;

“associated company” has the meaning assigned to it by section 16(1)(b) of the Companies (Amendment) Act 1986;

“business” includes a business carried on in the exercise of a profession or vocation, but does not include a business carried on otherwise than for gain;

“excepted asset” shall be construed in accordance with section 100;

“full-time working officer or employee”, in relation to one or more companies, means any officer or employee who devotes substantially the whole of such officer's or employee's time to the service of that company, or those companies taken together, in a managerial or technical capacity;

“holding company” and “subsidiary” have the meanings assigned to them, respectively, by section 155 of the Companies Act 1963;

“quoted”, in relation to any shares or securities, means quoted on a recognised stock exchange and “unquoted”, in relation to any shares or securities, means not so quoted;

“relevant business property” shall be construed in accordance with section 93.

• (2) In this Chapter a reference to a gift shall be construed as a reference to a taxable gift and a reference to an inheritance shall be construed as a reference to a taxable inheritance.

• (3) For the purposes of this Chapter a company and all its subsidiaries and any associated company of that company or of any of those subsidiaries and any subsidiary of such an associated company are members of a group.

• (4) In this Chapter any reference to a donee or successor is construed as including a reference to the transferee referred to in section 32(2).

91 Application (Chapter 2) [FA 1994 s125]

91.—This Chapter shall apply in relation to gifts and inheritances, but shall not apply in relation to an inheritance taken by a discretionary trust by virtue of sections 15(1) or 20(1).

92 Business relief. [FA 1994 s.126]

92.—Where the whole or part of the taxable value of any taxable gift or taxable inheritance is attributable to the value of any relevant business property, the whole or that part of the taxable value is, subject to the other provisions of this Chapter, treated as being reduced by 90 per cent.

93 Relevant business property. [FA 1994 s127(1), (2) and (4) to (8)]

93.—(1) In this Chapter and subject to the following provisions of this section and to sections 94, 96 and 100(4) “relevant business property” means, in relation to a gift or inheritance, any one or more of the following, that is:

• (a) property consisting of a business or interest in a business.

• (b) unquoted shares in or securities of a company whether incorporated in the State or otherwise to which paragraph (c) does not relate, and which on the valuation date (either by themselves alone or together with other shares or securities in that company in the absolute beneficial ownership of the donee or successor on that date) give control of powers of voting on all questions affecting the company as a whole which if exercised would yield more than 25 per cent of the votes capable of being exercised on those shares,

• (c) unquoted shares in or securities of a company whether incorporated in the State or otherwise which is, on the valuation date (after the taking of the gift or inheritance), a company controlled by the donee or successor within the meaning of section 27,

• (d) unquoted shares in or securities of a company whether incorporated in the State or otherwise which do not fall within paragraph (b) or (c) and which on the valuation date (either by themselves alone or together with other shares or securities in that company in the absolute beneficial ownership of the donee or successor on that date) have an aggregate nominal value which represents 10 per cent or more of the aggregate nominal value of the entire share capital and securities of the company on condition that the donee or successor has been a full-time working officer or employee of the company, or if that company is a member of a group, of one or more companies which are members of the group, throughout the period of 5 years ending on the date of the gift or inheritance,

• (e) any land or building, machinery or plant which, immediately before the gift or inheritance, was used wholly or mainly for the purposes of a business carried on by a company of which the disponer then had control or by a partnership of which the disponer then was a partner and for the purposes of this paragraph a person is deemed to have control of a company at any time if that person then had control of powers of voting on all questions affecting the company as a whole which if exercised would have yielded a majority of the votes capable of being exercised on all such questions,

• (f) quoted shares in or securities of a company which, but for the fact that they are quoted, would be shares or securities to which paragraph (b), (c) or (d) would relate on condition that such shares or securities, or other shares in or securities of the same company which are represented by those shares or securities, were in the beneficial ownership of the disponer immediately prior to the disposition and were unquoted at the date of the commencement of that beneficial ownership or at 23 May 1994, whichever is the later date.

• (2) Where a company has shares or securities of any class giving powers of voting limited to either or both—

• (a) the question of winding-up the company, and

• (b) any question primarily affecting shares or securities of that class,

the reference in subsection (1) to all questions affecting the company as a whole has effect as a reference to all such questions except any in relation to which those powers are capable of being exercised.

• (3) A business or interest in a business, or shares in or securities of a company, is not relevant business property if the business or, as the case may be, the business carried on by the company consists wholly or mainly of one or more of the following, that is, dealing in currencies, securities, stocks or shares, land or buildings, or making or holding investments.

• (4) Subsection (3) shall not apply to shares in or securities of a company if the business of the company consists wholly or mainly in being a holding company of one or more companies whose business does not fall within that subsection.

• (5) Any land, building, machinery or plant used wholly or mainly for the purposes of a business carried on as mentioned in subsection (1)(e) is not relevant business property in relation to a gift or inheritance, unless the disponer's interest in the business is, or shares in or securities of the company carrying on the business immediately before the gift or inheritance are, relevant business property in relation to the gift or inheritance or in relation to a simultaneous gift or inheritance taken by the same donee or successor.

• (6) The references to a disponer in subsections (1)(e) and (5) include a reference to a person in whom the land, building, machinery or plant concerned is vested for a beneficial interest in possession immediately before the gift or inheritance.

• (7) Where shares or securities are vested in the trustees of a settlement, any powers of voting which they give to the trustees of the settlement are, for the purposes of subsection (1)(e), deemed to be given to the person beneficially entitled in possession to the shares or securities except in a case where no individual is so entitled.

94 Minimum period of ownership. [FA 1994 s128]

94.—In relation to a gift or an inheritance, property shall not be relevant business property unless it was comprised in the disposition continuously—

• (a) in the case of an inheritance, which is taken on the date of death of the disponer, for a period of 2 years immediately prior to the date of the inheritance, or

• (b) in any other case, for a period of 5 years immediately prior to the date of the gift or inheritance,

and any period immediately before the date of the disposition during which the property was continuously in the beneficial ownership of the disponer, or of the spouse of the disponer, is deemed, for the purposes of this Chapter, to be a period or part of a period immediately before the date of the gift or inheritance during which it was continuously comprised in the disposition.

95 Replacements. [FA 1994 s129]

95.—(1) Property shall be treated as complying with section 94 if—

• (a) the property replaced other property and that property, that other property and any property directly or indirectly replaced by that other property were comprised in the disposition for periods which together comprised—

• (i) in a case referred to at paragraph (a) of section 94, at least 2 years falling within the 3 years immediately preceding the date of the inheritance, or

• (ii) in a case referred to at paragraph (b) of section 94, at least 5 years falling within the 6 years immediately preceding the date of the gift or inheritance,

and

• (b) any other property concerned was such that, had the gift or inheritance been taken immediately before it was replaced, it would, apart from section 94, have been relevant business property in relation to the gift or inheritance.

• (2) In a case to which subsection (1) relates, relief under this Chapter shall not exceed what it would have been had the replacement or any one or more of the replacements not been made.

• (3) For the purposes of subsection (2) changes resulting from the formation, alteration or dissolution of a partnership, or from the acquisition of a business by a company controlled (within the meaning of section 27) by the former owner of the business, are disregarded.

96 Succession. [FA 1994 s130]

96.—For the purposes of sections 94 and 95, where a disponer became beneficially entitled to any property on the death of another person the disponer is deemed to have been beneficially entitled to it from the date of that death.

97 Successive benefits. [FA 1994 s131]

97.—(1) Where—

• (a) a gift or inheritance (in this section referred to as “the earlier benefit”) was eligible for relief under this Chapter or would have been so eligible if such relief had been capable of being given in respect of gifts and inheritances taken at that time, and

• (b) the whole or part of the property which, in relation to the earlier benefit was relevant business property became, through the earlier benefit, the property of the person or of the spouse of the person who is the disponer in relation to a subsequent gift or inheritance (in this section referred to as “the subsequent benefit”), and

• (c) that property, or part, or any property directly or indirectly replacing it, would, apart from section 94, have been relevant business property in relation to the subsequent benefit, and

• (d) the subsequent benefit is an inheritance taken on the death of the disponer,

then the property which would have been relevant business property but for section 94 is relevant business property notwithstanding that section.

• (2) Where the property which, by virtue of subsection (1), is relevant business property replaced the property or part referred to in subsection (1)(c), relief under this Chapter shall not exceed what it would have been had the replacement or any one or more of the replacements not been made, and section 95(3) shall apply with the necessary modifications for the purposes of this subsection.

• (3) Where, in relation to the earlier benefit, the amount of the taxable value of the gift or inheritance which was attributable to the property or part referred to in subsection (1)(c) was part only of its value, a like part only of the value which, apart from this subsection, would fall to be reduced under this Chapter by virtue of this section is so reduced.

98 Value of business. [FA 1994 s132]

98.—For the purposes of this Chapter—

• (a) the value of a business or of an interest in a business is taken to be its net value,

• (b) subject to paragraph (c), the net value of a business shall be taken to be the market value of the assets used in the business (including goodwill) reduced by the aggregate market value of any liabilities incurred for the purposes of the business,

• (c) in ascertaining the net value of an interest in a business, no regard is had to assets or liabilities other than those by reference to which the net value of the entire business would fall to be ascertained.

99 Value of certain shares and securities. [FA 1994 s133]

99.—(1) Where a company is a member of a group and the business of any other company which is a member of the group falls within section 93(3), then, unless that business consists wholly or mainly in the holding of land or buildings wholly or mainly occupied by members of the group whose business does not fall within section 93(3), the value of shares in or securities of the company is taken for the purposes of this Chapter to be what it would be if that other company were not a member of the group.

• (2)
• (a) In this subsection “shares” include securities and “shares in a company” include other shares in the same company which are represented by those shares.

• (b) Where unquoted shares in a company which is a member of a group are comprised in a gift or inheritance and shares in another company which is also a member of the group are quoted on the valuation date, the value of the first-mentioned shares is taken, for the purpose of this Chapter, to be what it would be if that other company were not a member of the group, unless those unquoted shares were in the beneficial ownership of the disponer immediately prior to the disposition and those quoted shares were unquoted—

• (i) at some time prior to the gift or inheritance when they were in the beneficial ownership of the disponer or a member of that group, while being a member of such group, or

• (ii) at 23 May 1994,

whichever is the later date.

100 Exclusion of value of excepted assets. [FA 1994 s134]

100.—(1) In determining for the purposes of this Chapter what part of the taxable value of a gift or inheritance is attributable to the value of relevant business property, so much of the last-mentioned value as is attributable to—

• (a) any excepted assets within the meaning of subsection (2), or

• (b) any excluded property within the meaning of subsection (7),

is disregarded.

• (2) An asset is an excepted asset in relation to any relevant business property if it was not used wholly or mainly for the purposes of the business concerned throughout the whole or the last 2 years of the relevant period; but where the business concerned is carried on by a company which is a member of a group, the use of an asset for the purposes of a business carried on by another company which at the time of the use and immediately prior to the gift or inheritance was also a member of that group is treated as use for the purposes of the business concerned, unless that other company's membership of the group is to be disregarded under section 99.

• (3) The use of an asset for the purposes of a business to which section 93(3) relates is not treated as use for the purposes of the business concerned.

• (4) Subsection (2) shall not apply in relation to an asset which is relevant business property by virtue only of section 93(1)(e), and an asset is not relevant business property by virtue only of that provision unless either—

• (a) it was used in the manner referred to in that provision—

• (i) in the case where the disponer's interest in the business or the shares in or securities of the company carrying on the business are comprised in an inheritance taken on the date of death of the disponer, throughout the 2 years immediately preceding the date of the inheritance, or

• (ii) in any other case, throughout the 5 years immediately preceding the date of the gift or inheritance,

or

• (b) it replaced another asset so used and it and the other asset and any asset directly or indirectly replaced by that other asset were so used for periods which together comprised—

• (i) in the case referred to at paragraph (a)(i), at least 2 years falling within the 3 years immediately preceding the date of the inheritance, or

• (ii) in any other case, at least 5 years falling within the 6 years immediately preceding the date of the gift or inheritance,

but where section 97 applies paragraphs (a) and (b) are deemed to be complied with if the asset, or that asset and the asset or assets replaced by it, was or were so used throughout the period between the earlier and the subsequent benefit mentioned in that section, or throughout the part of that period during which it or they were in the beneficial ownership of the disponer or the disponer's spouse.

• (5) Where part but not the whole of any land or building is used exclusively for the purposes of any business and the land or building would, but for this subsection, be an excepted asset, or, as the case may be, prevented by subsection (4) from being relevant business property, the part so used and the remainder are for the purposes of this section treated as separate assets, and the value of the part so used shall (if it would otherwise be less) be taken to be such proportion of the value of the whole as may be just.

• (6) For the purposes of this section the relevant period, in relation to any asset, is the period immediately preceding the gift or inheritance during which the asset or, if the relevant business property is an interest in a business, a corresponding interest in the asset, was comprised in the disposition (within the meaning of section 94) or, if the business concerned is that of a company, was beneficially owned by that company or any other company which immediately before the gift or inheritance was a member of the same group.

• (7) For the purposes of this section an asset is deemed not to have been used wholly or mainly for the purposes of the business concerned at any time when it was used wholly or mainly for the personal benefit of the disponer or of a relative of the disponer.

• (8) Where, in relation to a gift or an inheritance—

• (a) relevant business property consisting of shares in or securities of a company are comprised in the gift or inheritance on the valuation date, and

• (b) property consisting of a business, or interest in a business, not falling within section 93(3) (in this section referred to as “company business property”) is on that date beneficially owned by that company or, where that company is a holding company of one or more companies within the same group, by any company within that group,

that company business property shall, for the purposes of subsection (1), be excluded property in relation to those shares or securities unless it would have been relevant business property if—

• (i) it had been the subject matter of that gift or inheritance, and

• (ii) it had been comprised in the disposition for the periods during which it was in the beneficial ownership of that first-mentioned company or of any member of that group, while being such a member, or actually comprised in the disposition.

• (9) In ascertaining whether or not company business property complies with paragraphs (i) and (ii) of subsection (7), section 95 shall, with any necessary modifications, apply to that company business property as to a case to which subsection (1) of section 95 relates.

101 Withdrawal of relief. [FA 1994 s135]

101.—(1) In this section “relevant period”, in relation to relevant business property comprised in a gift or inheritance, means the period of 6 years commencing on the date of the gift or inheritance.

• (2) The reduction which would fall to be made under section 92 in respect of relevant business property comprised in a gift or inheritance shall cease to be applicable if and to the extent that the property, or any property which directly or indirectly replaces it—

• (a) would not be relevant business property (apart from section 94 and the conditions attached to paragraphs (d) and (f) of subsection (1) of section 93 and other than by reason of bankruptcy or a bona fide winding-up on grounds of insolvency) in relation to a notional gift of such property taken by the same donee or successor from the same disponer at any time within the relevant period, unless it would be relevant business property (apart from section 94 and the conditions attached to paragraphs (d) and (f) of subsection (1) of section 93) in relation to another such notional gift taken within a year after the first-mentioned notional gift,

• (b) is sold, redeemed or compulsorily acquired within the relevant period and is not replaced, within a year of the sale, redemption or compulsory acquisition, by other property (other than quoted shares or securities or unquoted shares or securities to which section 99(2)(b) relates) which would be relevant business property (apart from section 94 and the condition attached to section 93(1)(d)) in relation to a notional gift of that other property taken by the same donee or successor from the same disponer on the date of the replacement,

and tax is chargeable in respect of the gift or inheritance as if the property were not relevant business property, but—

• (i) any land, building, machinery or plant which are comprised in the gift or inheritance and which qualify as relevant business property by virtue of section 93(1)(e) shall, together with any similar property which has replaced such property, continue to be relevant business property for the purposes of this section for so long as they are used for the purposes of the business concerned,

• (ii) this section shall not have effect where the donee or successor dies before the event which would otherwise cause the reduction to cease to be applicable.

102 Avoidance of double relief. [FA 1994 s135A]

102.—Where the whole or part of the taxable value of any taxable gift or taxable inheritance is attributable to agricultural property to which section 89(2) applies, such whole or part of the taxable value is not reduced under this Chapter.

Chapter 3 Miscellaneous reliefs

103 Relief from double aggregation. [FA 1985 s61(1) and (2)]

103.—(1) Property in respect of which tax is chargeable more than once on the same event is not included more than once in relation to that event in any aggregate referred to in Schedule 2.

• (2) Paragraph 5 of Part 1 of Schedule 2 shall not have effect in ascertaining the tax payable in respect of property which is chargeable to tax as being taken more than once on the same day.

104 Allowance for capital gains tax on the same event. [FA 1985 s63]

104.—(1) Where gift tax or inheritance tax is charged in respect of property on an event happening on or after the date of the passing of this Act, and the same event constitutes for capital gains tax purposes a disposal of an asset (being the same property or any part of the same property), the capital gains tax, if any, chargeable on the disposal is not deducted in ascertaining the taxable value for the purposes of the gift tax or inheritance tax but, in so far as it has been paid, is deducted from the net gift tax or inheritance tax as a credit against the same; but, in relation to each asset, or to a part of each asset, so disposed of, the amount deducted is the lesser of—

• (a) an amount equal to the amount of the capital gains tax attributable to such asset, or to the part of such asset, or

• (b) an amount equal to the amount of the gift tax or inheritance tax attributable to the property which is that asset, or that part of that asset.

• (2) For the purposes of any computation of the amount of capital gains tax to be deducted under this section, any necessary apportionments are made of any reliefs or expenditure and the method of apportionment adopted is such method as appears to the Commissioners, or on appeal to the Appeal Commissioners, to be just and reasonable.

105 Allowance for prior tax on the same event. [CATA 1976 s34A]

105.—Where tax is charged more than once in respect of the same property on the same event, the net tax payable which is earlier in priority is not deducted in ascertaining the taxable value for the purposes of the tax which is later in priority, but is deducted from the tax which is later in priority as a credit against the same, up to the net amount of the same.

106 Arrangements for relief from double taxation. [CATA 1976 s66]

106.—(1) If the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of gift tax or inheritance tax payable under the laws of the State and any tax imposed under the laws of that territory which is of a similar character or is chargeable by reference to death or to gifts inter vivos and that it is expedient that those arrangements should have the force of law, the arrangements shall, notwithstanding anything in any enactment, have the force of law.

• (2) Any arrangements to which the force of law is given under this section may include provision for relief from tax charged before the making of the arrangements and provisions as to property which is not itself subject to double tax, and the provisions of this section shall apply accordingly.

• (3) For the purposes of subsection (1), arrangements made with the head of a foreign state are regarded as made with the government of that foreign state.

• (4) Where any arrangements have the force of law by virtue of this section, the obligation as to secrecy imposed by any enactment shall not prevent the Commissioners from disclosing to any authorised officer of the government with which the arrangements are made such information as is required to be disclosed under the arrangements.

• (5)
• (a) Any order made under this section may be revoked by a subsequent order and any such revoking order may contain such transitional provisions as appear to the Government to be necessary or expedient.

• (b) Where an order is proposed to be made under this section, a draft of such order shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.

107 Other relief from double taxation. [CATA 1976 s67(1) to (3) and (5)]

107.—(1) (a) In this section—

“foreign tax” means any tax which is chargeable under the laws of any territory outside the State and is of a character similar to estate duty, gift tax or inheritance tax;

“event” means—

• (i) a death, or

• (ii) any other event,

by reference to which the date of the gift or the date of the inheritance is determined.

• (b) For the purposes of this section, a reference to property situate in a territory outside the State is a reference to property situate in that territory at the date of the gift or the date of the inheritance, as the case may be, or to property representing such property.

• (2) Where the Commissioners are satisfied that a taxable gift or taxable inheritance, taken under a disposition by a donee or successor on the happening of any event, is reduced by the payment of foreign tax which is chargeable in connection with the same event under the same disposition in respect of property which is situate in the territory outside the State in which that foreign tax is chargeable, they shall allow a credit in respect of that foreign tax against the gift tax or inheritance tax payable by that donee or successor on that taxable gift or taxable inheritance; but such credit shall not exceed—

• (a) the amount of the gift tax or inheritance tax payable in respect of the same property by reason of such property being comprised in any taxable gift or taxable inheritance taken under that disposition on the happening of that event, or

• (b) the amount of that foreign tax,

whichever is the lesser.

• (3) This section is subject to any arrangement to which the force of law is given under section 106 and, if any such arrangement provides for the allowance of the amount of a tax payable in a territory outside the State as a credit against gift tax or inheritance tax, the provisions of the arrangement shall apply in relation to the tax payable in that territory in lieu of the provisions of subsection (2).

• (4) Where the foreign tax in respect of property comprised in a taxable gift or a taxable inheritance taken under a disposition on the happening of an event is, under the terms of the disposition, directed to be paid out of a taxable gift or a taxable inheritance (taken under that disposition on the happening of the same event) other than the taxable gift or taxable inheritance out of which it would be payable in the absence of such a direction, then, for the purposes of subsection (2), the taxable gift or taxable inheritance out of which the foreign tax would be payable in the absence of such a direction, and no other taxable gift or taxable inheritance, is treated as reduced by the payment of the foreign tax.

PART 11 Miscellaneous

108 Certificates for probate. [CATA 1976 s60(1) to (5)]

108.—(1) In this section “Inland Revenue affidavit” has the meaning referred to in section 48(1).

• (2) Where an Inland Revenue affidavit has been delivered to the Commissioners and they are satisfied—

• (a) that an adequate payment on account of inheritance tax in respect of the property passing under the deceased person's will or intestacy or Part IX or section 56 of the Succession Act 1965 has been made, or

• (b) that the payment of inheritance tax in respect of such property may be deferred for the time being,

they shall certify in writing—

• (i) that the Inland Revenue affidavit was delivered to them, and

• (ii) (I) that a payment referred to in paragraph (a) has been made, or

• (II) that the payment referred to in paragraph (b) has been deferred for the time being,

as the case may be.

• (3) If, in the opinion of the Commissioners, the payment of inheritance tax in respect of the property passing under the deceased person's will or intestacy or Part IX or section 56 of the Succession Act 1965 can not be deferred for the time being without serious risk of such tax not being recovered, they may refuse to issue the certificate referred to in subsection (2) until the tax has been paid, or until such payment as is referred to in paragraph (a) of that subsection has been made.

• (4) The certificate required by section 30 of the Customs and Inland Revenue Act 1881, to be made by the proper officer of the court, shall not be made until a certificate of the Commissioners issued under subsection (2) has been produced to such officer and shall (instead of showing that the affidavit, if liable to stamp duty, has been duly stamped) show that the Commissioners have issued a certificate under subsection (2) and shall state the substance of the certificate so issued by the Commissioners.

• (5) The form of certificate required to be given by the proper officer of the court under section 30 of the Customs and Inland Revenue Act 1881 may be prescribed by rule of court in such manner as may be necessary for giving effect to this Act.

109 Payment of money standing in names of 2 or more persons. [CATA 1976 s61(1) to (5) and (7) and (8)]

109.—(1) In this section—

“banker” means a person who carries on banking business in the State and includes a friendly society, an industrial and provident society, a building society, the Post Office Savings Bank, a trustee savings bank and any person with whom money is lodged or deposited;

“pay” includes transfer in the books of a banker and any dealings with any moneys which were lodged or deposited in the name of a person who died after the time of the lodgment or deposit and any other person or persons;

“current account” means an account which is customarily operated on by means of a cheque or banker's order;

“banking business” has the meaning assigned to it by section 2 of the Central Bank Act 1971;

references to moneys lodged or deposited include references to shares of a building society, friendly society or industrial and provident society.

• (2) Where, either before or after the passing of this Act, a sum of money exceeding €31,750 is lodged or deposited (otherwise than on a current account) in the State with a banker, in the joint names of 2 or more persons, and one of such persons (in this section referred to as the deceased) dies on or after the date of the passing of this Act, the banker shall not pay such money or any part of such money to the survivor or all or any of the survivors of such persons, or to any other person, unless or until there is furnished to such banker a certificate by the Commissioners certifying that there is no outstanding claim for inheritance tax in connection with the death of the deceased in respect of such money or any part of such money or a consent in writing by the Commissioners to such payment pending the ascertainment and payment of such tax.

• (3) Notwithstanding anything contained in this Act, tax chargeable on the death of the deceased is deemed for the purposes of this section to become due on the day of the death of the deceased.

• (4) A banker who, after the passing of this Act, pays money in contravention of this section is liable to a penalty of €1,265.

• (5) Where a penalty is demanded of a banker under this section, the onus of proving that such certificate or such consent as is mentioned in this section was furnished to such banker before that banker paid such money shall lie on such banker.

• (6) Where a penalty is demanded of a banker under this section, it shall be a good defence to prove that, at the time when such banker paid such money, that banker had reasonable ground for believing that none of the persons in whose joint names such money was lodged or deposited with that banker was dead.

• (7) This section shall not apply where the sum of money referred to in subsection (2) is lodged or deposited in the joint names of 2 persons, one of whom dies on or after the date of the passing of this Act and is at the time of that person's death the spouse of that other person.

110 Court to provide for payment of tax. [CATA 1976 s62]

110.—Where any suit is pending in any court for the administration of any property chargeable with tax under this Act, such court shall provide, out of any such property which may be in the possession or control of the court, for the payment to the Commissioners of any of the tax or the interest on that tax which remains unpaid.

111 Liability to tax in respect of certain sales and mortgages. [CATA 1976 s64]

111.—(1) In this section—

“death duties” has the meaning assigned to it by section 30 of the Finance Act 1971; and

“purchaser or mortgagee” includes a person deriving title from or under a purchaser or mortgagee in the case of such a sale or mortgage as is referred to in this section.

• (2) Where an interest in expectancy has, prior to 1 April 1975, been bona fide sold or mortgaged for full consideration in money or money's worth, and that interest comes into possession on a death occurring on or after the date of the passing of this Act, the following provisions shall apply, that is—

• (a) the purchaser or mortgagee shall not be liable in respect of inheritance tax on the inheritance referred to in paragraph (b) for an amount greater than that referred to in paragraph (c);

• (b) the inheritance referred to in paragraph (a) is the inheritance of property in which the interest so sold or mortgaged subsists and which arises in respect of the interest of the remainderman referred to in section 32 so coming into possession;

• (c) the amount referred to in paragraph (a) shall be the amount that would then have been payable by the purchaser or mortgagee in respect of death duties on the property in which the interest subsists as property passing under the same disposition as that under which the inheritance is taken, if the property, on so coming into possession, had been chargeable to death duties—

• (i) under the law in force, and

• (ii) at the rate or rates having effect,

at the date of the sale or mortgage;

• (d) where such an interest is so mortgaged, any amount of inheritance tax payable in respect of the inheritance referred to in paragraph (b), and from the payment of which the mortgagee is relieved under this section, shall, notwithstanding the priority referred to in section 60(1), rank, in relation to property charged with such tax under that section, as a charge subsequent to the mortgage;

• (e) any person, other than the purchaser or mortgagee, who is accountable for the payment of so much of the inheritance tax as is not the liability of the purchaser or mortgagee by virtue of the relief given by this section, shall not be liable for the payment of any amount in respect of such inheritance tax in excess of the amount which is available to that person for such payment by reason of there being, at the time when the interest comes into possession, other property, or an equity of redemption, or both, subject to the same trusts, under the disposition referred to in paragraph (c), as the property in which the interest in expectancy subsists; and

• (f) nothing in section 45(7) or (8) or section 60(1) shall be construed as derogating from the relief given by this section to a purchaser or mortgagee.

112 References in deeds and wills, etc. to death duties. [CATA 1976 s65]

112.—In so far as a provision in a document refers (in whatever terms) to any death duty to arise on any death occurring on or after the date of the passing of this Act, it shall apply, as far as may be, as if the reference included a reference to inheritance tax—

• (a) if that document was executed prior to 31 March 1976, and the reference is to legacy duty and succession duty or either of them,

• (b) if that document was so executed, and the reference is to estate duty, and it may reasonable be inferred from all the circumstances (including any similarity of the incidence of inheritance tax to that of estate duty) that the inclusion of the reference to inheritance tax would be just, and

• (c) whether the document was executed prior to, on or after 31 March 1976, if the reference is to death duties, without referring to any particular death duty.

113 Tax, in relation to certain legislation. [CATA 1976 s68]

113.—(1) Inheritance tax shall not be a duty or a death duty for the purposes of section 9 of the Succession Act 1965, but it shall be a death duty for the purposes of—

• (a) section 34(3) of that Act,

• (b) the definition of pecuniary legacy in section 3(1) of that Act, and

• (c) paragraph 8 of Part II of the First Schedule to that Act.

• (2) Section 72 of the Registration of Title Act 1964 shall apply as if gift tax and inheritance tax were mentioned in that Act as well as estate duty and succession duty.

114 Delivery, service and evidence of notices and forms, etc. [CATA 1976 s70]

114.—(1) Any notice which under this Act is authorised or required to be given by the Commissioners may be served by post.

• (2) A notice or form which is to be served on a person may be either delivered to that person or left at that person's usual or last known place of abode.

• (3) Prima facie evidence of any notice given under this Act by the Commissioners or by an officer of the Commissioners may be given in any proceedings by production of a document purporting—

• (a) to be a copy of that notice, or

• (b) if the details specified in that notice are contained in an electronic, photographic or other record maintained by the Commissioners, to reproduce those details in so far as they relate to that notice,

and it shall not be necessary to prove the official position of the person by whom the notice purports to be given or, if it is signed, the signature, or that the person signing and giving it was authorised so to do.

• (4) In any case where a time limit is specified by or under this Act, other than Part 8 of this Act, for the doing of any act required by or under this Act, other than Part 8 of this Act, to be done by any person other than the Commissioners, the Commissioners may, in their discretion, extend such time limit.

115 Extension of certain Acts. [CATA 1976 s69]

115.—(1) Section 1 of the Provisional Collection of Taxes Act 1927 is hereby amended by the insertion of “and gift tax and inheritance tax” before “but no other tax or duty”.

• (2) Section 39 of the Inland Revenue Regulation Act 1890, is hereby amended by the insertion of “gift tax and inheritance tax,” before “stamp duties”.

116 Regulations. [CATA 1976 s71]

116.—(1) The Commissioners shall make such regulations as seem to them to be necessary for the purpose of giving effect to this Act and of enabling them to discharge their functions under the Act.

• (2) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done under that regulation.

117 Care and management. [CATA 1976 s72]

117.—(1) Tax is hereby placed under the care and management of the Commissioners.

• (2) Subject to the direction and control of the Commissioners, any power, function or duty conferred or imposed on the Commissioners by this Act may be exercised or performed on their behalf by an officer of the Commissioners.

PART 12 Repeals, etc.

118 Repeals.

118.—(1) Subject to subsection (2), the Capital Acquisitions Tax Act 1976 is hereby repealed.

• (2) This Act shall not apply in relation to gifts and inheritances taken before the date of the passing of this Act, and the repealed enactments shall continue to apply in relation to such gifts and inheritances to the same extent that they would have applied if this Act had not been enacted.

• (3) Notwithstanding subsection (1), any provision of the repealed enactments which imposes a fine, forfeiture, penalty or punishment for any act or omission shall, in relation to any act or omission which took place or began before the date of the passing of this Act, continue to apply in substitution for the provision of this Act to which it corresponds.

• (4) Anything done under or in connection with the provisions of the repealed enactments which correspond to the provisions of this Act shall be deemed to have been done under or in connection with the provisions of this Act to which those provisions of the repealed enactments correspond; but nothing in this subsection shall affect the operation of section 120(3) and (4).

119 Consequential amendments to other enactments.

119.—Schedule 3, which provides for amendments to other enactments consequential on the passing of this Act, shall apply for the purposes of this Act.

120 Transitional provisions.

120.—(1) The Commissioners shall have all the jurisdictions, powers and duties in relation to capital acquisitions tax under this Act which they had before the passing of this Act.

• (2) The continuity of the operation of the law relating to capital acquisitions tax shall not be affected by the substitution of this Act for the repealed enactments.

• (3) Any reference, whether express or implied, in any enactment or document (including this Act and any Act amended by this Act)—

• (a) to any provision of this Act, or

• (b) to things done or to be done under or for the purposes of any provisions of this Act,

shall, if and in so far as the nature of the reference permits, be construed as including, in relation to the times, years or periods, circumstances or purposes in relation to which the corresponding provision in the repealed enactments applied or had applied, a reference to, or, as the case may be, to things done or to be done under or for the purposes of, that corresponding provision.

• (4) Any reference, whether express or implied, in any enactment (including the repealed enactments and enactments passed after the passing of this Act)—

• (a) to any provision of the repealed enactments, or

• (b) to things done or to be done under or for the purposes of any provisions of the repealed enactments,

shall, if and in so far as the nature of the reference permits, be construed as including, in relation to the times, years or periods, circumstances or purposes in relation to which the corresponding provision of this Act applies, a reference to, or as the case may be, to things done or to be done under, or for the purposes of, that corresponding provision.

SCHEDULE 1 Valuation of Limited Interests

PART 1 Rules relating to the valuation of limited interests utilising Tables A and B in Parts 2 and 3 of this Schedule

• (a) the value of the capital sum, multiplied by the factor in Table B which is appropriate to the number of whole years in that period (or zero if that period is less than a whole year); and

• (b) where the period is not an integral number of years, a fraction (of which the numerator is the number of days in excess of the number of whole years, if any, in that period and the denominator is 365) of the difference between—

• (i) the value of an interest in the capital sum for one year longer than the number of whole years, if any, in the period; and

• (ii) the value ascertained under the provisions of paragraph (a) (or zero, where so provided in that paragraph).

• (a) the value of an interest for such life or lives, ascertained in accordance with the appropriate rule in this Part of this Schedule; and

• (b) the value of an interest for the period certain, ascertained in accordance with rule 6.

PART 2

TABLE A