Calculation of Tax
CAT Act
PART 5
Provisions Relating to Gifts and Inheritances
31
Distributions from discretionary trusts.
[CATA 1976 s22]
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]
(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.
33Release of limited interests, etc.
[CATA 1976 s24]
(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]
(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]
(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]
(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.
(1A)In subsections (1B) and (1C) ‘arrangement’ includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).
(1B)Notwithstanding subsection (1), where the exercise of, failure to exercise, or release of, a general power of appointment form part of an arrangement the main purpose or one of the main purposes of which is the avoidance of tax, tax shall be chargeable as if the disposition were the disposition under which the power was created and the person who created the power were the disponer.
(1C)Where the grant of a general power of appointment in or over property to any person forms part of an arrangement the main purpose or one of the main purposes of which is the avoidance of a charge to tax arising under sections 15(1) or 20(1), the grant of that general power of appointment shall not prejudice any such charge to tax.
(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.
Cesser of liabilities.
[CATA 1976 s28]
(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]
(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 notwithstanding 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).
40
Free use of property, free loans, etc.
[CATA 1976 s31]
(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]
(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]
(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]
(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)]
(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.
Chapter 3
Miscellaneous reliefs
103
Relief from double aggregation.
[FA 1985 s61(1) and (2)]
(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]
(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.
(3)The deduction by virtue of subsection (1) of capital gains tax chargeable on the disposal of an asset against gift tax or inheritance tax shall cease to apply to the extent that the asset is disposed of within 2 years commencing on the date of the gift or, as the case may be, the date of the inheritance.
(3A)Where an amount of tax is treated as an amount of capital gains tax for the purposes of this section under section 730GB of the Taxes Consolidation Act 1997, subsection (3) shall not apply in relation to that amount of tax.
(4)(a)In this subsection “division”, “merger”, “successor company” and “transferor company” have the meanings assigned to them by section 101(4)(a).
(b)For the purposes of subsection (3), a transfer of an asset from a transferor company to a successor company as a result of a merger or a division shall not be regarded as a disposal.
105
Allowance for prior tax on the same event.
[CATA 1976 s34A]
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.
106Arrangements for relief from double taxation.
[CATA 1976 s66]
(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—
(a)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, or
(b)exchanging information for the purposes of the prevention and detection of tax evasion in respect of the taxes specified in paragraph (a),
and that it is expedient that those arrangements should have the force of law and the order so made is referred to in the Table to this section, the arrangements shall, notwithstanding anything in any enactment, have the force of law as if each such order were an Act of the Oireachtas on and from the date of—
(i)the insertion of the Table, or
(ii)the insertion of a reference to the order in the Table,
whichever is the later.
(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.
SCHEDULE 1
Valuation of Limited Interests
Sections 28, 35 and 51.
[CATA 1976 First Sch.]
PART 1
Rules relating to the valuation of limited interests utilising Tables A and B in Parts 2 and 3 of this Schedule
1.The value of an interest for a single life in a capital sum shall be that sum multiplied by the factor, contained in column (3) or (4) respectively of Table A, which is appropriate to the age and sex of the person in respect of the duration of whose life the interest is to be valued.
2.The value of an interest in a capital sum for the joint continuance of 2 lives shall be the value of an interest in that sum for the older life, ascertained in accordance with rule 1, multiplied by the joint factor in column (2) of Table A which is appropriate to the younger life.
3.The value of an interest in a capital sum for the joint continuance of 3 or more lives shall be the value of an interest in that sum for the joint continuance of the 2 oldest of those lives, ascertained in accordance with rule 2, multiplied by the joint factor of the youngest of those lives.
4.The value of an interest in a capital sum for the longer of 2 lives shall be ascertained by deducting from the total of the values of an interest in that sum for each of those lives, ascertained in accordance with rule 1, the value of an interest in the capital sum for the joint continuance of the same 2 lives, ascertained in accordance with rule 2.
5.Where an interest is given for the longest of more than 2 lives, it shall be valued, in accordance with rule 4, as if it were for the longer of the 2 youngest of those lives.
6.The value of an interest in a capital sum for a period certain shall be the aggregate of—
(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).
7.In the case of a limited interest where the interest is for a life or lives, but is guaranteed for a period certain, the value shall be the higher of—
(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.
8.The value of a limited interest for which the other rules in this Part of this Schedule provide no method of valuing shall be ascertained as if the interest taken were a series of absolute interests in the property applied in satisfaction of the interest from time to time, taken as separate gifts or inheritances as the case may be.
PART 2
TABLE A
Years of age
Joint Factor
Value of an interest in a capital of €1 for a male life aged as in column 1
Value of an interest in a capital of €1 for a female life aged as in column 1
SCHEDULE 2
Computation of tax
Sections 46, 50, 69 and 76.
[CATA 1976 Second Sch., Pt.I, paras. 1 to 5 and 8 to 11 and Pt.II; FA 2001 ss. 221 and 222]
PART 1
Preliminary
1.In this Schedule—
“group threshold”, in relation to a taxable gift or a taxable inheritance taken on a particular day, means—
(a)€335,000, where—
(i)the donee or successor is on that day—
(I)the child, or the minor child of a deceased child, of the disponer,
(II)the child of the civil partner of the disponer, or minor child of a deceased child of the civil partner of the disponer,
(III)the minor child of the civil partner of a deceased child of the disponer, or
(IV)the minor child of the civil partner of a deceased child of the civil partner of the disponer,
or
(ii)the successor is on that day a parent of the disponer and—
(I)the interest taken is not a limited interest, and
(II)the inheritance is taken on the death of the disponer;
(b)€32,500, where the donee or successor is on that day—
(i)a lineal ancestor of the disponer,
(ii)a lineal descendant (other than a person referred to in any of clauses (I) to (IV) of paragraph (a)(i)) of the disponer,
(iii)a brother or a sister of the disponer,
(iv)a child of a brother or of a sister of the disponer, or
(v)a child of the civil partner of a brother or of a sister of the disponer;
(c)€16,250, where the donee or successor (who is not a spouse or civil partner of the disponer) does not, on that day, stand to the disponer in a relationship referred to in subparagraph (a) or (b);
“the consumer price index number”, in relation to a year, means the All Items Consumer Price Index Number for that year as compiled by the Central Statistics Office and expressed on the basis that the consumer price index number at mid-November 1996 is 100;
“Table” means the Table contained in Part 2 of this Schedule;
“threshold amount”, in relation to the computation of tax on any aggregate of taxable values under paragraph 3, means the group threshold that applies in relation to all of the taxable gifts and taxable inheritances included in that aggregate.
*
2.In the Table “Value” means the appropriate aggregate referred to in paragraph 3.
3.The tax chargeable on the taxable value of a taxable gift or a taxable inheritance (in this Schedule referred to as the first-mentioned gift or inheritance) taken by a donee or successor shall be of an amount equal to the amount by which the tax computed on aggregate A exceeds the tax computed on aggregate B, where—
(a)aggregate A is the aggregate of the following:
(i)the taxable value of the first-mentioned gift or inheritance, and
(ii)the taxable value of each taxable gift and taxable inheritance taken previously by that donee or successor on or after 5 December 1991, which has the same group threshold as the first-mentioned gift or inheritance,
(b)aggregate B is the aggregate of the taxable values of all such taxable gifts and taxable inheritances so previously taken which have the same group threshold as the first-mentioned gift or inheritance, and
(c)the tax on an aggregate is computed at the rate or rates of tax applicable under the Table to that aggregate, but where—
(i)in a case where no such taxable gift or taxable inheritance was so previously taken, the amount of the tax computed on aggregate B shall be deemed to be nil, and
(ii)the amount of an aggregate that comprises only a single taxable value shall be equal to that value.
4.In the Table any rate of tax shown in the second column is that applicable to such portion of the value (within the meaning of paragraph 2) as is shown in the first column.
(6)Where any donee or successor is, at the date of the gift or at the date of the inheritance—
(a)the surviving spouse of a deceased person, or
(b)the surviving civil partner of a deceased person,
and, at the time of the death of the deceased person, that deceased person was of nearer relationship than such donee or successor to the disponer, then such donee or successor is, in the computation of the tax payable on such taxable gift or taxable inheritance, deemed to bear to the disponer the relationship of that deceased person.
7.
(1)In this paragraph—
“company” means a private company which, for the relevant period—
(a)is a private company controlled by the disponer and of which the disponer is a director, and
(b)is not a private non-trading company;
“control”, in relation to a company, is construed in accordance with section 27(4)(b) ;
“investment income”, in relation to a private company, means income which, if the company were an individual, would not be earned income within the meaning of section 3 of the Taxes Consolidation Act 1997;
“nominee” has the same meaning as it has in section 27 ;
“private company” has the meaning assigned to it by section 27 ;
“private company controlled by the disponer” means a private company that is under the control of any one or more of the following, that is—
(a)the disponer,
(b)nominees of the disponer,
(c)the trustees of a settlement made by the disponer;
“private non-trading company” means a private company—
(a)whose income (if any) in the 12 months preceding the date at which a share in that company is to be valued consisted wholly or mainly of investment income; and
(b)whose property, on the date referred to in paragraph (a), consisted wholly or mainly of property from which investment income is derived;
“relevant period” means—
(a)the period of 5 years ending on the date of the disposition; or
(b)where, at the date of the disposition,
(i)an interest in possession in—
(I)the property referred to in subparagraph (2)(a), or
(II)the shares referred to in subparagraph (2)(b),
as the case may be, is limited to the disponer under the disposition, and
(ii)such property is not, or such shares are not, property consisting of the appropriate part of property, within the meaning of section 5(5), on which is charged or secured an annuity or other annual right limited to cease on the death of the disponer,
the period of 5 years ending on the coming to an end of that interest,
subject, in relation to work, to the exclusion of reasonable periods of annual or sick leave from that period of 5 years.
(2)For the purpose of computing the tax payable on a gift or inheritance made by a disponer to a donee or successor who is—
(a)a child of the disponer’s brother or sister, or
(b)a child of the civil partner of the disponer’s brother or sister,
the same rules apply as where the gift or inheritance is made to the disponer’s child if—
(i)the donee or successor has worked substantially on a full-time basis for the disponer for the relevant period in carrying on, or in assisting in carrying on, the trade, business or profession of the disponer, and the gift or inheritance consists of property which was used in connection with that business, trade or profession, or
(ii)the donee or successor has worked substantially on a full-time basis for a company for the relevant period in carrying on, or in assisting in carrying on, the trade, business or profession of the company, and the gift or inheritance consists of shares in that company.
(3)Without prejudice to the generality of subparagraph (2), a donee or successor is not deemed to be working substantially on a full-time basis for a disponer or a company unless—
(a)where the gift or inheritance consists of property which was used in connection with the business, trade or profession of the disponer, the donee or successor works—
(i)more than 24 hours a week for the disponer, at a place where that business, trade or profession, is carried on, or
(ii)more than 15 hours a week for the disponer, at a place where that business, trade or profession is carried on, and such business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer, and the donee or successor,
or
(b)where the gift or inheritance consists of shares in the company, the donee or successor works—
(i)more than 24 hours a week for the company, at a place where the business, trade or profession of the company is carried on, or
(ii)more than 15 hours a week for the company, at a place where the business, trade or profession of the company is carried on, and such business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer, and the donee or successor.
(4)This paragraph shall not apply to a gift or inheritance taken by a donee or successor under a discretionary trust.
8.(a)In this paragraph “specified disposition” means a disposition—
(i)the date of which is a date prior to 1 April 1975,
(ii)in relation to which the disponer is a grandparent of the donee or successor, and
(iii)in which the marriage of the parents of the donee or successor was, at the date of the disposition, expressed to be the consideration.
(b)Where, on the cesser of a limited interest to which a parent of the donee or successor was entitled in possession, the donee or successor takes a gift or an inheritance under a specified disposition, then, for the purpose of computing the tax payable on the gift or inheritance, the donee or successor is deemed to bear to the disponer the relationship of a child.
9.
(1)In this paragraph—
“the appropriate period” means periods which together comprised at least 5 years falling within the 18 years immediately following the birth of the donee or successor.
(2)Where, on a claim being made to them in that behalf, the Commissioners are, subject to subparagraph (3), satisfied—
(a)where the inheritance is taken by a successor on the date of death of the disponer, that the successor had, prior to the date of the inheritance, been placed in the foster care of the disponer under the Child Care (Placement of Children in Foster Care) Regulations 1995 (S.I. No. 260 of 1995), or the Child Care (Placement of Children with Relatives) Regulations 1995 (S.I. No. 261 of 1995), or
(b)that throughout the appropriate period the donee or successor—
(i)has resided with the disponer, and
(ii)was under the care of and maintained by the disponer at the disponer’s own expense,
then, subject to subparagraph (3), for the purposes of computing the tax payable on that gift or inheritance, that donee or successor is deemed to bear to that disponer the relationship of a child.
(3)Relief under subparagraph (2) shall not apply where the claim for such relief is based on the uncorroborated testimony of one witness.
10.Where, on a claim being made to them in that behalf, the Commissioners are satisfied that—
(a)the donee or successor had at the date of the gift or the date of the inheritance been adopted in the manner referred to in paragraph (b) of the definition of “child” contained in section 2(1), and
(b)the disponer is the natural mother or the natural father of the donee or successor,
then, notwithstanding section 2(5), for the purpose of computing the tax payable on that gift or inheritance, that donee or successor is deemed to bear to that disponer the relationship of a child.
11.For the purposes of this Schedule, a reference to a gift or an inheritance, or to a taxable gift or a taxable inheritance, includes a reference to a part of a gift or an inheritance, or to a part of a taxable gift or a taxable inheritance, as the case may be.
PART 2
TABLE
Portion of Value
Rate of tax Per cent