Number 1 of 2003

CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003

ARRANGEMENT OF SECTIONS

PART 1

Preliminary

PART 2

Gift Tax

PART 3

Inheritance Tax

Chapter 1

General

Chapter 2

Initial levy on discretionary trusts

Chapter 3

Annual levy on discretionary trusts

PART 4

Value of Property for Tax

PART 5

Provisions Relating to Gifts and Inheritances

PART 6

Returns and Assessments

PART 7

Payment and Recovery of Tax, Interest and Penalties

PART 8

Appeals

PART 9

Exemptions

PART 10

Reliefs

Chapter 1

Agricultural relief

Chapter 2

Business relief

Chapter 3

Miscellaneous reliefs

PART 11

Miscellaneous

PART 12

Repeals, etc.

SCHEDULE 1

Valuation of Limited Interests

SCHEDULE 2

Computation of Tax

SCHEDULE 3

Consequential Amendments

Number 1 of 2003

CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003

AN ACT TO CONSOLIDATE ENACTMENTS RELATING TO CAPITAL ACQUISITIONS TAX. [21st February 2003]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1

Preliminary

Short title.

1.—This Act may be cited as the Capital Acquisitions Tax Consolidation Act 2003 .

General interpretation.

[CATA 1976 s2]

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

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

“accountable person” means a person who is accountable for the payment of tax by virtue of section 45 ;

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

“child” includes—

(a) a stepchild;

(b) a child adopted—

(i) under the Adoption Acts 1952 to 1998, or

(ii) under a foreign adoption which by virtue of section 2, 3, 4 or 5 of the Adoption Act 1991 , is deemed to have been effected by a valid adoption order within the meaning of section 1 of that Act;

“Collector” means the Collector-General appointed under section 851 of the Taxes Consolidation Act 1997 ;

“Commissioners” means the Revenue Commissioners;

“date of the disposition” means—

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

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

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

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

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

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

“date of the inheritance” means—

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

(b) in the case of a gift which becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within 2 years prior to the death of the disponer, the date which would have been the date of the gift if the entitlement were a gift, and

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

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

“discretionary trust” means any trust whereby, or by virtue or in consequence of which—

(a) property is held on trust to accumulate the income or part of the income of the property, or

(b) property (other than property to which for the time being a person is beneficially entitled for an interest in possession) is held on trust to apply, or with a power to apply, the income or capital or part of the income or capital of the property for the benefit of any person or persons or of any one or more of a number or of a class of persons whether at the discretion of trustees or any other person and notwithstanding that there may be a power to accumulate all or any part of the income;

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

(a) the testator is the disponer in the case of a disposition referred to in paragraph (k) of the definition of “disposition”,

(b) the intestate is the disponer in the case of a disposition referred to in paragraph (l) of that definition,

(c) the deceased person referred to in paragraph (m) of that definition is the disponer in the case of a disposition referred to in that paragraph, and

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

“disposition” includes—

(a) any act or omission by a person as a result of which the value of that person's estate immediately after the act or omission is less than it would be but for the act or omission,

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

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

(d) the payment of money,

(e) the allotment of shares in a company,

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

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

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

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

(j) a donatio mortis causa,

(k) a will or other testamentary disposition,

(l) an intestacy, whether total or partial,

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

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

“donee” means a person who takes a gift;

“entitled in possession” means having a present right to the enjoyment of property as opposed to having a future such right, and without prejudice to the generality of the foregoing a person is also, for the purposes of this Act, deemed to be entitled in possession to an interest or share in a partnership, joint tenancy or estate of a deceased person, in which that person is a partner, joint tenant or beneficiary, as the case may be, but that person is not deemed to be entitled in possession to an interest in expectancy until an event happens whereby this interest ceases to be an interest in expectancy;

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

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

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

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

“limited interest” means—

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

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

“local authority” has the meaning assigned to it by section 2(1) of the Local Government Act 2001 and includes a body established under the Local Government Services (Corporate Bodies) Act 1971 ;

“market value”, in relation to property, means the market value of that property ascertained in accordance with sections 26 and 27;

“minor child” means a child who has not attained the age of 18 years and is not and has not been married;

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

“personal representative” means the executor or administrator for the time being of a deceased person and includes—

(a) any person who takes possession of or intermeddles with the property of a deceased person,

(b) any person having, in relation to the deceased person, under the law of another country, any functions corresponding to the functions, for administration purposes under the law of the State, of an executor or administrator;

“property” includes rights and interests of any description;

“real property” means real and chattel real property;

“regulations” means regulations made under section 116 ;

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

“return” means such a return as is referred to in section 46 ;

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

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

“successor” means a person who takes an inheritance;

“tax” means any tax chargeable under this Act;

“valuation date” has the meaning assigned to it by section 30 ;

“year of assessment” has the meaning assigned to it by section 2 of the Taxes Consolidation Act 1997 .

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

(a) notwithstanding that the person is not sui juris or is under a physical disability,

(b) over money which the person has a general power to charge on property, and

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

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

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

(a) the spouse of that other person,

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

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

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

(e) the grandparent of that other person.

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

(6) For the purposes of this Act—

(a) a reference to a person being resident in the State on a particular date is construed as a reference to that person being resident in the State in the year of assessment in which that date falls (but, for those purposes, the provisions of Part 34 of the Taxes Consolidation Act 1997 , relating to residence of individuals is not construed as requiring a year of assessment to have elapsed before a determination of whether or not a person is resident in the State on a date falling in that year may be made), and

(b) a reference to a person being ordinarily resident in the State on a particular date is construed as a reference to that person being ordinarily resident in the State in the year of assessment in which that date falls.

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

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

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

Meaning of “on a death”.

[CATA 1976 s3]

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

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

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

(c) under a disposition where the date of the disposition is on or after 1 April 1975 and within 2 years prior to the death of the disponer, or

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

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

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

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

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

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

PART 2

Gift Tax

Charge of gift tax.

[CATA 1976 s4 (part)]

4.—A capital acquisitions tax, to be called gift tax and to be computed in accordance with this Act, shall, subject to this Act and any regulations made under the Act, be charged, levied and paid on the taxable value of every taxable gift taken by a donee.

Gift deemed to be taken.

[CATA 1976 s5: FA 1993 s121(1) (part); FA 1994 s147 (part)]

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

(2) A gift is deemed—

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

(b) if the benefit is an annuity or other periodic payment which is not charged on or secured by any property and which the donee is not entitled to have so charged or secured, to consist of such sum as would, if invested on the date of the gift in the security of the Government which was issued last before that date for subscription in the State and is redeemable not less than 10 years after the date of issue, yield, on the basis of the current yield on the security, an annual income equivalent to the annual value of the annuity or of the other periodic payment receivable by the donee.

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

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

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

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

(i) when the benefit was transferred to that person or to another in that person's right or on that person's behalf, or

(ii) when that person or another in that person's right or on that person's behalf became beneficially entitled in possession to the benefit,

whichever is the later.

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

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

(ii) which was enforceable by action.

(7) (a) In paragraph (b), the expression “shares in a private company” shall be construed by reference to the meanings that “share” and “private company” have, respectively, in section 27 .

(b) Where a person becomes beneficially entitled in possession to a benefit, and the property in which the benefit is taken consists wholly or partly of shares in a private company and where the consideration referred to in subsection (1), being consideration in relation to a disposition, could not reasonably be regarded (taking into account the disponer's position prior to the disposition) as representing full consideration to the disponer for having made such a disposition, subsection (1) is deemed to apply as if “otherwise than for full consideration in money or money's worth paid by such person” were deleted in that subsection.

Taxable gift.

[CATA 1976 s6 (part)]

6.—(1) In relation to a gift taken under a disposition, where the date of the disposition is before 1 December 1999, “taxable gift” in this Act means—

(a) in the case of a gift, other than a gift taken under a discretionary trust, where the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift, the whole of the gift,

(b) in the case of a gift taken under a discretionary trust where the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift or at the date of the gift or was (in the case of a gift taken after that donee's death) so domiciled at the time of that donee's death, the whole of the gift, and

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

(2) In relation to a gift taken under a disposition, where the date of the disposition is on or after 1 December 1999, “taxable gift” in this Act means—

(a) in the case of a gift, other than a gift taken under a discretionary trust, where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the donee takes the gift, the whole of the gift,

(b) in the case of a gift taken under a discretionary trust where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the donee takes the gift or at the date of the gift or was (in the case of a gift taken after the death of the disponer) so resident or ordinarily resident at the date of that death, the whole of the gift,

(c) in the case where the donee is resident or ordinarily resident in the State at the date of the gift, the whole of the gift, and

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

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

(4) For the purposes of subsection (2), a person who is not domiciled in the State on a particular date is treated as not resident and not ordinarily resident in the State on that date unless—

(a) that date occurs on or after 1 December 2004,

(b) that person has been resident in the State for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls, and

(c) that person is either resident or ordinarily resident in the State on that date.

(5) (a) In this subsection—

“company” and “share” have the same meaning as they have in section 27 ;

“company controlled by the donee” has the same meaning as is assigned to “company controlled by the donee or successor” by section 27 .

(b) For the purposes of subsection (2)(d), a proportion of the market value of any share in a private company incorporated outside the State which (after the taking of the gift) is a company controlled by the donee is deemed to be a sum situate in the State and is the amount determined by the following formula—

where

A is the market value of that share at the date of the gift ascertained under section 27 ,

B is the market value of all property in the beneficial ownership of that company which is situate in the State at the date of the gift, and

C is the total market value of all property in the beneficial ownership of that company at the date of the gift.

(c) Paragraph (b) shall not apply in a case where the disponer was domiciled outside the State at all times up to and including the date of the gift or, in the case of a gift taken after the death of the disponer, up to and including the date of that death or where the share in question is actually situate in the State at the date of the gift.

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

[CATA 1976 s7]

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

Disponer in certain connected dispositions.

[CATA 1976 s8]

8.—(1) Where a donee takes a gift under a disposition made by a disponer (in this section referred to as the original disponer) and, within the period commencing 3 years before and ending 3 years after the date of that gift, the donee makes a disposition under which a second donee takes a gift and whether or not the second donee makes a disposition within the same period under which a third donee takes a gift, and so on, each donee is deemed to take a gift from the original disponer (and not from the immediate disponer under whose disposition the gift was taken); and a gift so deemed to be taken is deemed to be an inheritance (and not a gift) taken by the donee, as successor, from the original disponer if—

(a) the original disponer dies within 2 years after the date of the disposition made by that original disponer, and

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

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

PART 3

Inheritance Tax

Chapter 1

General

Charge of inheritance tax.

[CATA 1976 s10 (part)]

9.—A capital acquisitions tax, to be called inheritance tax and to be computed in accordance with this Act, shall, subject to this Act and any regulations made under the Act, be charged, levied and paid on the taxable value of every taxable inheritance taken by a successor.

Inheritance deemed to be taken.

[CATA 1976 s11; FA 1993 s123 (1) (part); FA 1994 s148 (part)]

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

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

(3) For the purposes of section 11 (1)(b) and 11(2)(c), the sum referred to in section 5 (2)(b) is deemed not to be situate in the State at the date of the inheritance.

(4)  (a) In paragraph (b), the expression “shares in a private company” is construed by reference to the meanings that “share” and “private company” have, respectively, in section 27 .

(b) Where a person becomes beneficially entitled in possession to a benefit, and the property in which the benefit is taken consists wholly or partly of shares in a private company and where the consideration referred to in subsection (1), being consideration in relation to a disposition, could not reasonably be regarded (taking into account the disponer's position prior to the disposition) as representing full consideration to the disponer for having made such a disposition, subsection (1) is deemed to apply as if “otherwise than for full consideration in money or money's worth paid by such person” were deleted in that subsection.

Taxable inheritance.

[CATA 1976 s12 (part)]

11.—(1) In relation to an inheritance taken under a disposition, where the date of the disposition is before 1 December 1999, “taxable inheritance” in this Act means—

(a) in the case where the disponer is domiciled in the State at the date of the disposition under which the successor takes the inheritance, the whole of the inheritance, and

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

(i) the whole of the property—

(I) which was to be appropriated to the inheritance, or

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

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

(ii) a part or proportion of the property—

(I) which was to be appropriated to the inheritance, or

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

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

(2) In relation to an inheritance taken under a disposition, where the date of the disposition is on or after 1 December 1999, “taxable inheritance” in the Act means—

(a) in the case where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the successor takes the inheritance, the whole of the inheritance,

(b) in the case where the successor (not being a successor in relation to a charge for tax arising by virtue of sections 15(1) and 20(1)) is resident or ordinarily resident in the State at the date of the inheritance, the whole of the inheritance, and

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

(i) the whole of the property—

(I) which was to be appropriated to the inheritance, or

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

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

(ii) a part or proportion of the property—

(I) which was to be appropriated to the inheritance, or

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

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

(3) For the purposes of subsections (1)(b) and (2)(c)—

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

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

(4) For the purposes of subsection (2), a person who is not domiciled in the State on a particular date is treated as not resident and not ordinarily resident in the State on that date unless—

(a) that date occurs on or after 1 December 2004,

(b) that person has been resident in the State for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls, and

(c) that person is either resident or ordinarily resident in the State on that date.

(5) (a) In this subsection—

“company” and “share” have the same meaning as they have in section 27 ;

“company controlled by the donee” has the same meaning as is assigned to “company controlled by the donee or successor” by section 27 .

(b) For the purposes of subsection (2)(c), a proportion of the market value of any share in a private company incorporated outside the State which (after the taking of the inheritance) is a company controlled by the successor is deemed to be a sum situate in the State and is the amount determined by the following formula—

where

A is the market value of that share at the date of the inheritance ascertained under section 27 ,

B is the market value of all property in the beneficial ownership of that company which is situate in the State at the date of the inheritance, and

C is the total market value of all property in the beneficial ownership of that company at the date of the inheritance.

(c) Paragraph (b) shall not apply in a case where the disponer was not domiciled in the State at the date of the disposition under which the successor takes the inheritance or where the share in question is actually situate in the State at the date of the inheritance.

Disclaimer.

[CATA 1976 s13]

12.—(1) If—

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

(ii) an entitlement to an interest in settled property,

is disclaimed;

(b) a claim—

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

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

is waived; or

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

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

(2) Notwithstanding anything contained in this Act—

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

(b) the waiver of a claim—

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

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

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

(ii) the election against, or

(iii) the lapse of,

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

is not a disposition for the purposes of this Act.

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

Surviving joint tenant deemed to take an inheritance, etc.

[CATA 1976 s14]

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

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

Chapter 2

Initial levy on discretionary trusts

Interpretation (Chapter 2).

[FA 1984 s104]

14.—In this Chapter—

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

“principal objects”, in relation to a discretionary trust, means such objects, if any, of the trust for the time being as are—

(a) the spouse of the disponer,

(b) the children of the disponer, or

(c) the children of a child of the disponer where such child predeceased the disponer.

Acquisitions by discretionary trusts.

[FA 1984 s106]

15.—(1) Where, on or after 25 January 1984, under or in consequence of any disposition, property becomes subject to a discretionary trust, the trust is deemed, on—

(a) the date on which that property becomes or became subject to the discretionary trust,

(b) the date of death of the disponer, or

(c) where there are principal objects of the trust, the date on which there ceases to be a principal object of the trust who is—

(i) under the age of 25 years, where the property became subject to the trust on or after 25 January 1984 and before 31 January 1993, or

(ii) under the age of 21 years, where the property becomes or became subject to the trust on or after 31 January 1993,

whichever date is the latest, to become or to have become beneficially entitled in possession to an absolute interest in so much, if any, of that property or of property representing that property and of accumulations of income of that property or of property representing those accumulations as remains subject to the discretionary trust on that latest date, and to take or to have taken an inheritance accordingly as if the trust, and the trustees as such for the time being of the trust, were together a person for the purposes of this Act, and that latest date shall be the date of the inheritance.

(2) Property which, under or in consequence of any disposition, was subject to a discretionary trust on 25 January 1984 is, for the purposes of subsection (1), deemed to have become subject to the trust on that date.

(3) Property which, under or in consequence of any disposition, was subject to a discretionary trust on 31 January 1993 is, for the purposes of subsection (1), deemed to have become subject to the trust on that date.

(4) For the purposes of this section—

(a) an interest in expectancy is not property until an event happens whereby the interest ceases to be an interest in expectancy or is represented by property which is not an interest in expectancy,

(b) an interest in a policy of assurance on human life is not property until, and then only to the extent that, the interest becomes an interest in possession under section 41 or is represented by property which is not an interest in expectancy.

(5) Where, apart from this subsection, property or property representing such property would be chargeable under this section, or under this section and the corresponding provisions of the repealed enactments, with tax more than once under the same disposition, such property is so chargeable with tax once only, that is, on the earliest occasion on which such property would become so chargeable with tax.

Application of this Act.

[FA 1984 s107 (a) to (d) and (g)]

16.—In relation to a charge for tax arising by reason of section 15 —

(a) a reference in section 27 to a company controlled by the successor and the definition in that section of “group of shares” is construed as if (for the purpose of that reference) the list of persons contained in subsection (3) of that section and (for the purpose of that definition) the list of persons contained in that definition included the following, that is, the trustees of the discretionary trust, the living objects of the discretionary trust, the relatives of those objects, nominees of those trustees or of those objects or of the relatives of those objects, and the trustees of a settlement whose objects include the living objects of the discretionary trust or relatives of those living objects.

(b) section 30 shall apply, with the modification that the valuation date of the taxable inheritance is—

(i) the date of the inheritance, or

(ii) the valuation date ascertained in accordance with that section,

whichever is the later, and with any other necessary modifications;

(c) a person who is a trustee of the discretionary trust concerned for the time being at the date of the inheritance or at any date subsequent to that date is a person primarily accountable for the payment of the tax;

(d) an object of the discretionary trust concerned to whom or for whose benefit any of the property subject to the trust is applied or appointed is also accountable for the payment of tax the charge in respect of which has arisen prior to the date of the application or appointment of the property to that person or for that person's benefit, and this Act shall apply, in its application to that charge for tax, as if that object of the discretionary trust were a person referred to in section 45 (2); and

(e) section 45 (1), sections 50, 56 and 81 and Schedule 2 shall not apply.

Exemptions.

[FA 1984 s108]

17.—(1) Section 15 shall not apply in relation to a discretionary trust which is shown to the satisfaction of the Commissioners to have been created exclusively—

(a) for public or charitable purposes in the State or Northern Ireland,

(b) for the purposes of—

(i) any scheme for the provision of superannuation benefits on retirement established by or under any enactment or by or under an instrument made under any enactment, or

(ii) any sponsored superannuation scheme within the meaning of subsection (1) of section 783 of the Taxes Consolidation Act 1997 or a trust scheme or part of a trust scheme approved by the Commissioners under that section or section 785 of that Act, but shall not include a scheme or arrangement which relates to matters other than service in particular offices or employments;

(c) for the purposes of a registered unit trust scheme within the meaning of the Unit Trusts Act 1990 ;

(d)   (i) for the benefit of one or more named individuals, and

(ii) for the reason that such individual, or all such individuals, is or are, because of age or improvidence, or of physical, mental or legal incapacity, incapable of managing that individual or those individuals' affairs;

or

(e) for the purpose of providing for the upkeep of a house or garden referred to in section 77 (6).

(2) Section 15 shall not apply—

(a) in relation to a discretionary trust in respect of the property subject to or becoming subject to the trust which, on the termination of the trust, is comprised in a gift or an inheritance taken by the State, or

(b) in respect of an inheritance which, apart from this subsection, would be deemed, by the combined effect of section 15 and section 40 , to be taken by a discretionary trust.

Computation of tax.

[FA 1984 s109]

18.—(1) In this section—

“earlier relevant inheritance” means a relevant inheritance deemed to be taken on the date of death of the disponer;

“later relevant inheritance” means a relevant inheritance which, after the date of death of the disponer, is deemed to be taken by a discretionary trust by virtue of there ceasing to be a principal object of that trust who is under the age of 21 years;

“relevant inheritance” means an inheritance which, by virtue of section 15 (1), is deemed to be taken by a discretionary trust;

“relevant period” means—

(a) in relation to an earlier relevant inheritance, the period of 5 years commencing on the date of death of the disponer,

(b) in relation to a settled relevant inheritance, the period of 5 years commencing on the date of death of the life tenant concerned, and

(c) in relation to a later relevant inheritance, the period of 5 years commencing on the latest date on which a later relevant inheritance was deemed to be taken from the disponer;

“settled relevant inheritance” means a relevant inheritance taken on the death of a life tenant;

“the appropriate trust”, in relation to a relevant inheritance, means the trust by which that inheritance was deemed to be taken.

(2) Subject to subsection (3), the tax chargeable on the taxable value of a taxable inheritance which is charged to tax by reason of section 15 is computed at the rate of 6 per cent of such taxable value.

(3) Where, in the case of each earlier relevant inheritance, each settled relevant inheritance or each later relevant inheritance, as the case may be, taken from the same disponer, one or more objects of the appropriate trust became beneficially entitled in possession before the expiration of the relevant period to an absolute interest in the entire of the property of which that inheritance consisted on and at all times after the date of that inheritance (other than property which ceased to be subject to the terms of the appropriate trust by virtue of a sale or exchange of an absolute interest in that property for full consideration in money or money's worth), then, in relation to all such earlier relevant inheritances, all such settled relevant inheritances or all such later relevant inheritances, as the case may be, the tax so chargeable is computed at the rate of 3 per cent.

(4) Where 2 or more persons are together beneficially entitled in possession to an absolute interest in property, those persons shall not, by reason only that together they are beneficially so entitled in possession, be regarded for the purposes of subsection (3) as beneficially so entitled in possession.

(5) Notwithstanding section 57 , interest shall not be payable on any repayment of tax which arises by virtue of subsection (3).

Chapter 3

Annual levy on discretionary trusts

Interpretation (Chapter 3).

[FA 1986 s102]

19.—In this Chapter—

“chargeable date”, in relation to any year, means 5 April in that year;

“chargeable discretionary trust” means a discretionary trust in relation to which—

(a) the disponer is dead, and

(b) none of the principal objects of the trust, if any, is under the age of 21 years;

“object” and “principal objects”, in relation to a discretionary trust, have the meanings respectively assigned to them by section 14 .

Annual acquisitions by discretionary trusts.

[FA 1986 s103]

20.—(1) Where, in any year commencing with the year 2003, under or in consequence of any disposition, property is subject to a chargeable discretionary trust on the chargeable date, the trust is deemed on each such date to become beneficially entitled in possession to an absolute interest in that property, and to take on each such date an inheritance accordingly as if the trust, and the trustees as such for the time being of the trust, were together a person for the purposes of this Act, and each such chargeable date shall be the date of such inheritance.

(2) (a) In this subsection, “property” includes property representing such property.

(b) Where—

(i) under or in consequence of any disposition, property was subject to a discretionary trust prior to a chargeable date,

(ii) that property is not on that chargeable date subject to that discretionary trust (being on that date a chargeable discretionary trust) because such property is on that date property to which for the time being a person is beneficially entitled for an interest in possession, and

(iii) on that chargeable date that property is property which is limited to become subject again to that chargeable discretionary trust, or will do so by the exercise of a power of revocation,

that property is deemed to be subject to that chargeable discretionary trust on that chargeable date if that interest in possession is an interest which is revocable or which is limited to cease on an event other than—

(I) the death of that person, or

(II) the expiration of a specified period, where that interest is taken by that person under a power of appointment contained in that disposition and is, at the time of the appointment of that interest, an interest for a period certain of 5 years or more.

(3) For the purposes of this section—

(a) an interest in expectancy is not property until an event happens whereby the interest ceases to be an interest in expectancy or is represented by property which is not an interest in expectancy;

(b) an interest in a policy of assurance on human life is not property until, and then only to the extent that, the interest becomes an interest in possession under the provisions of section 41 or is represented by property which is not an interest in expectancy.

(4) This section shall not apply in relation to property which is subject to a chargeable discretionary trust on a chargeable date if that property or property representing that property is subject to a charge for tax arising under or in consequence of the same disposition by reason of section 15 , or that provision of the repealed enactments which corresponds with section 15 , on that same date or within the year prior to that date.

Application of this Act.

[FA 1986 s104 (a) to (e) and (g)]

21.—In relation to a charge for tax arising by reason of section 20 —

(a) a reference in section 27 to a company controlled by the successor and the definition in that section of “group of shares” is construed as if (for the purpose of that reference) the list of persons contained in subsection (3) of that section and (for the purpose of that definition) the list of persons contained in that definition included the following, that is, the trustees of the discretionary trust, the living objects of the discretionary trust, the relatives of those objects, nominees of those trustees or of those objects or of the relatives of those objects, and the trustees of a settlement whose objects include the living objects of the discretionary trust or relatives of those living objects;

(b)    (i) subject to the provisions of subparagraph (ii), the valuation date of the taxable inheritance is the relevant chargeable date;

(ii) where—

(I) a charge for tax arises on a particular date by reason of section 15 , or that provision of the repealed enactments which corresponds with section 15 , giving rise to a taxable inheritance (in this subparagraph called the first taxable inheritance),

(II) on a later date, a charge for tax arises under or in consequence of the same disposition by reason of section 20 giving rise to a taxable inheritance (in this subparagraph called the second taxable inheritance) comprising the same property or property representing that property, and

(III) the valuation date of the first taxable inheritance is a date after the chargeable date of the second taxable inheritance,

the valuation date of the second taxable inheritance is the same date as the valuation date of the first taxable inheritance;

(c) a person who is a trustee of the discretionary trust concerned for the time being at the date of the inheritance or at any date subsequent to that date is a person primarily accountable for the payment of the tax;

(d) an object of the discretionary trust concerned to whom or for whose benefit any of the property subject to the trust is applied or appointed is also accountable for the payment of tax the charge in respect of which has arisen prior to the date of the application or appointment of the property to that object or for that object's benefit, and this Act shall apply, in its application to that charge for tax, as if that object of the discretionary trust were a person referred to in section 45 (2);

(e) any person who is primarily accountable for the payment of tax by virtue of paragraph (c) shall, within 3 months after the valuation date—

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

(I) of every inheritance in respect of which that person is so primarily accountable,

(II) of all the property comprised in such inheritance, and

(III) of an estimate of the market value of such property;

(ii) notwithstanding any other provision of this Act, make an assessment of such amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid on that valuation date; and

(iii) pay the amount of such tax to the Collector;

and

(f) section 30 , section 45(1), section 46(2), (3), (4) and (5) and sections 50, 54, 56 and 81 and Schedule 2 shall not apply.

Exemptions.

[FA 1986 s106]

22.—Section 20 shall not apply in relation to a discretionary trust referred to in section 17 (1) or in respect of the property or the inheritance referred to in section 17 (2).

Computation of tax.

[FA 1986 s106]

23.—The tax chargeable on the taxable value of a taxable inheritance which is charged to tax by reason of section 20 is computed at the rate of one per cent of that taxable value.

Values agreed.

[FA 1986 s107]

24.—(1) Where—

(a) under or in consequence of any disposition, a charge for tax arises by reason of section 20 on a chargeable date (in this section called the first chargeable date),

(b) an accountable person has furnished all the information necessary to enable the Commissioners to ascertain the market value of—

(i) real property, or

(ii) shares which are not dealt in on a stock exchange,

comprised in the taxable inheritance so taken on the valuation date of that taxable inheritance,

(c) pursuant to an application in writing to the Commissioners on that behalf, the market value of such property on that valuation date is agreed on between that person and the Commissioners,

(d) under or in consequence of the same disposition, a charge for tax arises by reason of section 20 on either or both of the 2 chargeable dates in the years next following the year in which the first chargeable date occurs (in this section called the subsequent chargeable dates), and

(e) the same property at subparagraph (i) or (ii) of paragraph (b) is comprised in the taxable inheritances so taken on the subsequent chargeable dates,

the value so agreed on is treated for the purposes of this Chapter as the market value of such property on that valuation date and on the valuation dates of the taxable inheritances so taken on the subsequent chargeable dates.

(2) Notwithstanding subsection (1), the market value so agreed is not binding—

(a) in any case where there is failure to disclose material facts in relation to any part of the property comprised in the taxable inheritances taken on the first chargeable date or on the subsequent chargeable dates, or

(b) where, at any time after the first chargeable date and before the third of those chargeable dates—

(i) in the case of real property, there is any alteration in the tenure under which the property is held or let, or

(ii) in the case of shares, there is any alteration in the capital or the ownership of the capital of the company concerned or of the rights of the shareholders inter se,

or

(c) where, at any time after the first chargeable date and before the third of those chargeable dates—

(i) in the case of real property, there is any change whatever, whether affecting that or any other property, which would materially increase or decrease the market value over and above any increase or decrease which might normally be expected if such a change had not occurred, or

(ii) in the case of shares, there has been any material change in the assets of the company or in their market value over and above any such change which might normally be expected,

and in such cases the market value of the real property, or of the shares, may be ascertained again by the Commissioners for each of the relevant valuation dates, but in the case of any change referred to in paragraph (c), the market value may be ascertained again by the Commissioners only at the request of the person primarily accountable for the payment of the tax arising by reason of section 20 on that relevant valuation date.

(3) Any agreement made under this section shall be binding only on the persons who as such are accountable for the payment of the tax arising by reason of section 20 on the first chargeable date and on the subsequent chargeable dates.

Penalty.

[FA 1986 s108]

25.—Any person who contravenes or fails to comply with any requirement under paragraph (e) of section 21 is liable to a penalty of—

(a) €1,265, or

(b) twice the amount of tax payable in respect of the taxable inheritance to which the return relates,

whichever is the lesser.

PART 4

Value of Property for Tax

Market value of property.

[CATA 1976 s15]

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

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

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

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

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

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

Market value of certain shares in private companies.

[CATA 1976 s16]

27.—(1) In this section—

“group of shares”, in relation to a private company, means the aggregate of the shares in the company of the donee or successor, the relatives of the donee or successor, nominees of the donee or successor, nominees of relatives of the donee or successor, and the trustees of a settlement whose objects include the donee or successor or relatives of the donee or successor;

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

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

(a) is under the control of not more than 5 persons, and

(b) is not a company which would fall within section 431 of the Taxes Consolidation Act 1997 if the words “private company” were substituted for the words “close company” in subsection (3) of that section, and if the words “are beneficially held by a company which is not a private company” were substituted for the words of paragraph (a) of subsection (6) of that section;

“share”, in relation to a private company and in addition to the interpretation of “share” in section 2 (1), includes every debenture, or loan stock, issued otherwise than as part of a transaction which is wholly and exclusively a bona fide commercial transaction.

(2) (a) The market value of each share in a private company which (after the taking of the gift or of the inheritance) is, on the date of the gift or on the date of the inheritance, a company controlled by the donee or successor, shall be ascertained by the Commissioners, for the purposes of tax, 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 in that company, such apportionment, as between shares of a particular class, to be by reference to nominal amount, and, as between different classes of shares, to have due regard to the rights attaching to each of the different classes.

(b) For the purpose of ascertaining the market value of a share in a private company in the manner described in paragraph (a), the benefit to any private company (in this paragraph referred to as “the first-mentioned company”) by virtue of its ownership of an interest in shares in another private company (in this paragraph referred to as “the second-mentioned company”) is, where each of the companies so connected is a company which (after the taking of the gift or of the inheritance) is, on the date of the gift or on the date of the inheritance, a company controlled by the donee or successor, deemed to be—

(i) such benefit as would be appropriate to the ownership of that interest if the second-mentioned company were under the control of the first-mentioned company in the same manner as (on the date on which the market value is to be ascertained) the second-mentioned company is under the control of the following, that is, the first-mentioned company, the donee or successor, the relatives of the donee or successor, nominees of the donee or successor, nominees of relatives of the donee or successor, and the trustees of a settlement whose objects include the donee or successor or relatives of the donee or successor, or

(ii) the actual benefit appropriate to the ownership of that interest,

whichever is the greater.

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

(4) For the purposes of this section—

(a) a company is deemed to be under the control of not more than 5 persons if any 5 or fewer persons together exercise, or are able to exercise, or are entitled to acquire control, whether direct or indirect, of the company and for this purpose—

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

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

(iii) persons in partnership, and

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

shall respectively be treated as a single person, and

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

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

(ii) that person then had the capacity, or could then by an exercise of a power exercisable by that person or at that person's direction or with that person's consent obtain the capacity, to exercise or to control the exercise of any of the following powers, that is:

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

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

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

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

(V) powers of a like nature;

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

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

Taxable value of a taxable gift or inheritance.

[CATA 1976 s18]

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

(2) Subject to this section (but except where provided in section 89 ), the taxable value of a taxable gift or a taxable inheritance (where the interest taken by the donee or successor is not a limited interest) is ascertained by deducting from the incumbrance-free value of such a taxable gift or a taxable inheritance the market value of any bona fide consideration in money or money's worth, paid by the donee or successor for the gift or inheritance, including—

(a) any liability of the disponer which the donee or successor undertakes to discharge as that disponer's own personal liability, and

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

and the amount so ascertained is the taxable value, but no deduction shall be made under this subsection in respect of any liability which is to be deducted in ascertaining the incumbrance-free value.

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

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

(a) the value of the limited interest in a capital sum equal to the incumbrance-free value is ascertained in accordance with the Rules contained in Schedule 1, and

(b) from the value ascertained in accordance with paragraph (a) a deduction is made in respect of the market value of any bona fide consideration in money or money's worth paid by the donee or the successor for the gift or the inheritance and the amount remaining after such deduction is the taxable value, but no deduction is made under this paragraph in respect of any liability which is to be deducted in ascertaining the incumbrance-free value.

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

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

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

(c) in respect of any liability created by the donee or successor or any person claiming in right of the donee or successor or on that donee or successor's behalf,

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

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

(f) in the case of any gift or inheritance referred to in section 6 (1)(c), 6(2)(d), 11(1)(b) or 11(2)(c) in respect of—

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

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

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

(g) for any tax in respect of which a credit is allowed under section 106 or 107.

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

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

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

(b) for any liability, costs, expenses or consideration, a proportion of which is to be allowed under section 89 (2)(ii) or (iii) in respect of a gift or inheritance taken by the donee or successor from the disponer.

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

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

(10) Where—

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

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

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

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

Contingencies affecting gifts or inheritances.

[CATA 1976 s20]

29.—(1) Where, under a disposition, a person becomes beneficially entitled in possession to any benefit and, under the terms of the disposition, the entitlement, or any part of the entitlement, may cease on the happening of a contingency (other than the revocation of the entitlement on the exercise by the disponer of such a power as is referred to in section 39 ), the taxable value of any taxable gift or taxable inheritance taken by that person on becoming so entitled to that benefit is ascertained as if no part of the entitlement were so to cease; but, in the event and to the extent that the entitlement so ceases, the tax payable by that person is, to that extent, adjusted (if, by so doing, a lesser amount of tax would be payable by such person) on the basis that such person had taken an interest in possession for a period certain which was equal to the actual duration of such person's beneficial entitlement in possession.

(2) Nothing in this section shall prejudice any charge for tax on the taking by such person of a substituted gift or inheritance on the happening of such a contingency.

Valuation date for tax purposes.

[CATA 1976 s21]

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

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

(a) as a donatio mortis causa, or

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

(3) If a gift becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within 2 years prior to the death of the disponer, the valuation date of the inheritance is determined as if it were a gift.

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

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

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

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

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

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

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

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

(9) An appeal shall lie against any determination made by the Commissioners under subsection (6) and section 67 shall apply, with any necessary modifications, in relation to an appeal under this subsection as it applies in relation to an appeal against an assessment of tax.

PART 5

Provisions Relating to Gifts and Inheritances

Distributions from discretionary trusts.

[CATA 1976 s22]

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

(a) under a discretionary trust, other than a discretionary trust referred to in paragraph (b), otherwise than for full consideration in money or money's worth paid by the person, that person is deemed to have taken a gift,

(b) under a discretionary trust created—

(i) by will at any time,

(ii) by a disposition, where the date of the disposition is on or after 1 April 1975 and within 2 years prior to the death of the disponer, or

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

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

Dealings with future interests.

[CATA 1976 s23]

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

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

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

Release of limited interests, etc.

[CATA 1976 s24]

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

(a) a death, and

(b) the expiration of a specified period.

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

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

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

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

(b) on the coming to an end of that interest, subsection (2) has effect in relation to a gift or inheritance which was taken by a donee or successor under that disposition and which consists of the property in which that interest subsisted, then—

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

Settlement of an interest not in possession.

[CATA 1976 s25]

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

(2) Where any donee or successor takes a gift or an inheritance under a disposition made by such donee or successor then, if at the date of such disposition such donee or successor was entitled to the property comprised in the disposition, either expectantly on the happening of an event, or subject to a liability within the meaning of section 28 (9), and such event happens or such liability ceases during the continuance of the disposition, tax is charged on the taxable value of the taxable gift or taxable inheritance which such donee or successor would have taken on the happening of such event, or on the cesser of such liability, if no such disposition had been made.

(3) Subsection (2) shall not prejudice any charge for tax in respect of any gift or inheritance affecting the same property or any part of it under the disposition referred to in that subsection,

Enlargement of interests.

[CATA 1976 s26]

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

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

(b) commences on that date, and

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

(2) For the purposes of subsection (1)(a), “value” means such amount as would be the incumbrance-free value, within the meaning of section 28 (1), if the limited interest were taken, at the date referred to in subsection (1), as a taxable gift or taxable inheritance.

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

Dispositions involving powers of appointment.

[CATA 1976 s27]

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

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

Cesser of liabilities.

[CATA 1976 s28]

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

(2) The benefit of the cesser of—

(a) a liability within the meaning of section 28 (9), or

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

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

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

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

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

Disposition enlarging value of property.

[CATA 1976 s29]

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

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

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

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

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

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

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

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

Gift subject to power of revocation.

[CATA 1976 s30]

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

Free use of property, free loans, etc.

[CATA 1976 s31]

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

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

(3) A gift referred to in subsection (2) is deemed to consist of a sum equal to the difference between the amount of any consideration in money or money's worth, given by the person referred to in subsection (2) for such use, occupation or enjoyment, and the best price obtainable in the open market for such use, occupation or enjoyment.

(4) A gift referred to in subsection (2) is treated as being taken at the end of the relevant period or, if earlier, immediately prior to the time when the use, occupation or enjoyment referred to in subsection (2) comes to an end.

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

(a) made by will,

(b) where the date of the disposition is on or after 1 April 1975 and within 2 years prior to the death of the disponer, or

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

subsections (2), (3) and (4) shall apply in relation to that property as if a reference to an inheritance were substituted for the reference to a gift wherever it occurs in those subsections, and for the purpose of this subsection “relevant period” in subsections (2) and (4), in relation to the use, occupation or enjoyment of property, means the period of 12 months ending on 31 December in any year.

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

When interest in assurance policy becomes interest in possession.

[CATA 1976 s32]

41.—(1) For the purposes of this Act, an interest in a policy of assurance on human life is deemed to become an interest in possession when either—

(a) the policy matures, or

(b) prior to the maturing of the policy, the policy is surrendered to the insurer for a consideration in money or money's worth, but if during the currency of the policy the insurer makes a payment of money or money's worth, in full or partial discharge of the policy, the interest is deemed to have come into possession to the extent of such payment.

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

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

[CATA 1976 s33]

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

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

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

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

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

Disposition by or to a company.

[CATA 1976 s34]

43.—(1) In this section—

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

“market value” means—

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

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

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

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

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

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

(2) For the purposes of this Act—

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

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

by the beneficial owners of the shares in the company and the beneficial owners of the entitlements under any liability incurred by the company (otherwise than for the purposes of the business of the company, wholly and exclusively) in the same proportions as the specified amounts relating to their respective beneficial interests in the shares and entitlements bear to each other.

(3) For the purposes of subsection (2) all acts, omissions and receipts of the company are deemed to be those of the beneficial owners of the shares and entitlements, referred to in subsection (2), in the company, in the proportions mentioned in that subsection.

(4) Where the beneficial owner of any shares in a company or of any entitlement of the kind referred to in subsection (2), is itself a company, the beneficial owners of the shares and entitlements, referred to in subsection (2), in the latter company, are deemed to be the beneficial owners of the latter company's shares and entitlements in the former company, in the proportions in which they are the beneficial owners of the shares and entitlements in the latter company.

(5) So far as the shares and entitlements referred to in subsection (2) are held in trust and have no ascertainable beneficial owners, consideration paid, or a disposition made, by the company are deemed to be paid or made by the disponer who made the disposition under which the shares and entitlements are so held in trust.

Arrangements reducing value of company shares.

[FA 1989 s90(1) to (10) and (12)]

44.—(1) In this section—

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

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

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

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

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

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

“event” includes—

(a) a death, and

(b) the expiration of a specified period;

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

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

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

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

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

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

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

(3) Where—

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

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

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

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

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

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

(4) Where—

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

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

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

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

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

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

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

(5) Where—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PART 6

Returns and Assessments

Accountable persons.

[CATA 1976 s35]

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

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

(b) in the case referred to in section 32 (2), the transferee referred to in that subsection, to the extent referred to in that subsection.

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

(a) in the case of a gift—

(i) the disponer (other than a disponer in relation to a disposition where the date of the disposition was prior to 28 February 1974), and

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

(b)  (i) in the case of an inheritance, taken on or before the death of the disponer, the disponer (other than a disponer in relation to a disposition, where the date of the disposition was prior to 1 May 1989), and

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

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

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

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

which has been received by that person, or which, but for that person's own neglect or default, would have been received by that person or to which that person is beneficially entitled in possession.

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

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

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

(a) the accountable persons, and

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

on whom the Commissioners have served notice in writing of the assessment of tax in exercise of the power conferred on them by section 49 , but the liability of a personal representative under this subsection shall not exceed the amount for which the accountable person, of whom that person is the personal representative, was liable.

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

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

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

(8) A person—

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

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

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

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

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

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

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

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

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

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

Delivery of returns

[CATA 1976 s36]

46.—(1) In this section—

(a) notwithstanding anything contained in sections 6 and 11 a reference, other than in subsection (13) or (14), to a gift or a taxable gift includes a reference to an inheritance or a taxable inheritance, as the case may be, and

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

(2) Subject to paragraph (e) of section 21 , any person who is primarily accountable for the payment of tax by virtue of section 45 (1), or by virtue of paragraph (c) of section 16 shall, within 4 months after the relevant date referred to in subsection (5)—

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

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

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

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

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

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

(c) duly pay the amount of such tax.

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

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

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

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

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

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

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

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

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

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

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

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

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

(a) the valuation date, or

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

(6) Any person who is accountable for the payment of tax by virtue of subsection (2) or (9) of section 45 shall, if that person is required by notice in writing by the Commissioners to do so, comply with paragraphs (a), (b) and (c) of subsection (2) (as if that person were a person primarily accountable for the payment of tax by virtue of section 45 (1)) within such time, not being less than 30 days, as may be specified in the notice.

(7) (a) Any accountable person shall, if that person is so required by the Commissioners by notice in writing, deliver and verify to the Commissioners within such time, not being less than 30 days, as may be specified in the notice—

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

(ii) such evidence as they require,

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

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

(i) any property comprised in a gift, or

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

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

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

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

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

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

and

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

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

(9) Where any accountable person who has delivered a return or an additional return is aware or becomes aware at any time that the return or additional return is defective in a material respect by reason of anything contained in or omitted from it, that person shall, without application from the Commissioners and within 3 months of so becoming aware—

(a) deliver to them an additional return,

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

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

and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(a) the terms of the discretionary trust,

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

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

Signing of returns, etc.

[CATA 1976 s37]

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

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

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

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

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

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

(b) An affidavit, additional affidavit, account or additional account, delivered under this Act, shall be made on a form provided, or approved of, by the Commissioners.

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

(a) before the Commissioners,

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

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

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

Affidavits and accounts.

[CATA 1976 s38]

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

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

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

(i) by that person's will,

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

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

(b) details of any property which was the subject matter of a disposition inter vivos made by the deceased person where the date of the disposition was within 2 years prior to that person's death or of a donatio mortis causa;

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

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

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

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

(3) Where the interest of the deceased person was a limited interest and that person died on or after the date of the passing of this Act, the trustee of the property in which the limited interest subsisted shall deliver an account which shall contain the following particulars—

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

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

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

Assessment of tax.

[CATA 1976 s39; FA 1989 s75]

49.—(1) Subject to section 46 , assessments of tax under this Act shall be made by the Commissioners.

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

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

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

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

(6) Any assessment, correcting assessment or additional assessment under this section may be made by the Commissioners from any return or additional return delivered under section 46 or from any other information in the possession of the Commissioners or from any one or more of these sources.

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

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

Computation of tax.

[CATA 1976 s40 (part)]

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

PART 7

Payment and Recovery of Tax, Interest and Penalties

Payment of tax and interest on tax.

[CATA 1976 s41(1), (2), (2A) and (3) to (6) and (8); FA 1989 s76(2)]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(7) In the case of a gift which becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within 2 years prior to the death of the disponer, this section has effect as if the references to the valuation date in subsections (1), (2), (3) and (4) were references to the date of death of the disponer.

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

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

[CATA 1976 s42]

52.—Where an amount has been paid in respect of gift tax (or interest on such gift tax) on a gift which, by reason of the death of the disponer within 2 years after the date of the disposition under which the gift was taken, becomes an inheritance in respect of which inheritance tax is payable, the amount so paid is treated as a payment on account of the inheritance tax.

Surcharge for undervaluation of property.

[FA 1989 s79]

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

(2) Where—

(a) an accountable person delivers a return, and

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

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

(3) Interest is payable under section 51 on any surcharge as if the surcharge were tax, and the surcharge and any interest on that surcharge is chargeable and recoverable as if the surcharge and that interest were part of the tax.

(4) Any person aggrieved by the imposition on that person of a surcharge under this section in respect of any asset may, within 30 days of the notification to that person of the amount of such surcharge, appeal to the Appeal Commissioners against the imposition of such surcharge on the grounds that, having regard to all the circumstances, there were sufficient grounds on which that person might reasonably have based that person's estimate of the market value of the asset.

(5) The Appeal Commissioners shall hear and determine an appeal to them under subsection (4) as if it were an appeal to them against an assessment to tax, and the provisions of section 67 relating to an appeal or to the rehearing of an appeal or to the statement of a case for the opinion of the High Court on a point of law shall, with any necessary modifications, apply accordingly.

TABLE

Payment of tax by instalments.

[CATA 1976 s43]

54.—(1) Subject to the payment of interest in accordance with section 51 and to the provisions of this section, the tax due and payable in respect of a taxable gift or a taxable inheritance may, at the option of the person delivering the return or additional return, be paid by 5 equal yearly instalments, the first of which is due at the expiration of 12 months from the date on which the tax became due and payable and the interest on the unpaid tax shall be added to each instalment and shall be paid at the same time as such instalment.

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

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

(4) This section shall not apply in any case where and to the extent to which a taxable gift or a taxable inheritance consists of personal property in which the donee, or the successor, or the transferee referred to in section 32 (2), as the case may be, takes an absolute interest.

(5) In any case where the interest taken by a donee or a successor is an interest limited to cease on that person's death, and that person's death occurs before all the instalments of the tax in respect of the taxable gift or taxable inheritance would have fallen due if such tax were being paid by instalments, any instalment of such tax which would not have fallen due prior to the date of the death of that donee or successor shall cease to be payable, and the payment, if made, of any such last-mentioned instalment is treated as an overpayment of tax for the purposes of section 57 .

Payment of tax on certain assets by instalments.

[FA 1995 s164]

55.—(1) In this section—

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

“relevant business property” has the same meaning as it has in section 93 , other than shares in or securities of a company (being shares or securities quoted on a recognised stock exchange) and without regard to sections 94 and 100(4).

(2) Where the whole or part of the tax which is due and payable in respect of a taxable gift or taxable inheritance is attributable to either or both agricultural property and relevant business property—

(a) section 54 shall apply to that whole or part of the tax notwithstanding subsection (3) or (4) of that section but where all or any part of that agricultural property or relevant business property, or any property which directly or indirectly replaces such property, is sold or compulsorily acquired and, by virtue of subsection (4) of section 89 or section 101 , that sale or compulsory acquisition causes the taxable value of such a taxable gift or taxable inheritance to be increased, or would cause such increase if subsection (2) of section 89 or section 92 applied, all unpaid instalments referable to the property sold or compulsorily acquired shall, unless the interest of the donee or successor is a limited interest, be paid on completion of that sale or compulsory acquisition and, if not so paid, shall be tax in arrear, and

(b) notwithstanding subsection (2) of section 51 the rate at which interest is payable on that whole or part of the tax is 0.75 per cent or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, for each month or part of a month instead of at the rate specified in that section and that section shall apply as regards that whole or part of the tax as if the rate so payable were substituted for the rate specified in that section, but the rate at which interest is payable on any overdue instalment of that whole or part of the tax, or on such part of the tax as would represent any such overdue instalment if that whole or part of the tax were being paid by instalments, shall continue to be at the rate specified in section 51 .

(3) For the purposes of this section reference to an overdue instalment in paragraph (b) of subsection (2) is a reference to an instalment which is overdue for the purposes of section 54 (as it applies to this section) or for the purposes of paragraph (a) of subsection (2).

(4) For the purposes of this section the value of a business or of an interest in a business shall be taken to be its net value ascertained in accordance with section 98 .

(5) This section shall not apply in relation to an inheritance taken by a discretionary trust by virtue of section 15 (1) or section 20 (1).

(6) 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.

Payment of inheritance tax by transfer of securities.

[CATA 1976 s45]

56.— Section 22 of the Finance Act 1954 (which relates to the payment of death duties by the transfer of securities to the Minister for Finance) and the regulations made under that Act shall apply, with any necessary modifications, to the payment of inheritance tax by the transfer of securities to the Minister for Finance, as they apply to the payment of death duties by the transfer of securities to the Minister for Finance.

Overpayment of tax.

[CATA 1976 s46]

57.—(1) Where, on application to the Commissioners for relief under this section, it is proved to their satisfaction that an amount has been paid in excess of the liability for tax or for interest on tax, they shall give relief by means of repayment of the excess or otherwise as is reasonable and just; and any such repayment shall carry simple interest (not exceeding the amount of such excess), at the rate of 0.0161 per cent or such other rate (if any) as stands prescribed by the Minister for Finance by regulations, for each day or part of a day from the date on which the payment was made, and income tax is not to be deductible on payment of interest under this section and such interest is not to be reckoned in computing income for the purposes of the Tax Acts.

(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.

Penalties.

[CATA 1976 s63]

58.—(1) (a) Any person who contravenes or fails to comply with any requirement or provision under section 46 shall be liable to a penalty of €2,535.

(b) Where the contravention or failure referred to in paragraph (a) continues after judgment has been given by the court before which proceedings for the penalty have been commenced, the person concerned shall be liable to a further penalty of €30 for each day on which the contravention or failure so continues.

(2) Where, under, or for the purposes of, any of the provisions of this Act, a person is authorised to inspect any property for the purpose of reporting to the Commissioners the market value of that property and the person having custody or possession of that property prevents such inspection or obstructs the person so authorised in the performance of that person's functions in relation to the inspection, the person so having custody or possession is liable to a penalty of €1,265.

(3) Where an accountable person fraudulently or negligently—

(a) delivers any incorrect return or additional return,

(b) makes or furnishes any incorrect statement, declaration, evidence or valuation in connection with any property comprised in any disposition,

(c) makes or furnishes any incorrect statement, declaration, evidence or valuation in connection with any claim for any allowance, deduction, exemption or relief, or

(d) makes or furnishes any incorrect statement, declaration, evidence or valuation in connection with any other matter,

on the basis of which the amount of tax assessable in respect of a taxable gift or taxable inheritance would be less than it would have been if the correct return, additional return, statement, declaration, evidence or valuation had been delivered, made or furnished, that person is liable to a penalty of—

(i) €6,345, and

(ii) the amount, or in the case of fraud, twice the amount, of the difference specified in subsection (5).

(4) Where any such return, additional return, statement, declaration, evidence or valuation as is mentioned in subsection (3) was delivered, made or furnished neither fraudulently nor negligently by a person and it comes to that person's notice that it was incorrect, then, unless the error is remedied without unreasonable delay, such matter is treated, for the purposes of this section, as having been negligently done by that person.

(5) The difference referred to in subsection (3) is the difference between—

(a) the amount of tax payable in respect of the taxable gift or taxable inheritance to which the return, additional return, statement, declaration, evidence or valuation relates, and

(b) the amount which would have been the amount so payable if the return, additional return, statement, declaration, evidence or valuation as made or submitted had been correct.

(6) For the purpose of subsection (3), where anything referred to in that subsection is delivered, made or furnished on behalf of a person, it is deemed to have been delivered, made or furnished by that person unless that person proves that it was done without that person's knowledge or consent.

(7) Any person who assists in or induces the delivery, making or furnishing for any purposes of the tax of any return, additional return, statement, declaration, evidence or valuation which that person knows to be incorrect shall be liable to a penalty of €1,265.

(8) This section shall not affect any criminal proceedings.

(9) Subject to this section, sections 987(4), 1061, 1062, 1063, 1064, 1065, 1066 and 1068 of the Taxes Consolidation Act 1997 , shall, with any necessary modifications, apply to a penalty under this Act as if the penalty were a penalty under the Income Tax Acts.

Postponement, remission and compounding of tax.

[CATA 1976 s44]

59.—(1) Where the Commissioners are satisfied that tax leviable in respect of any gift or inheritance can not without excessive hardship be raised at once, they may allow payment to be postponed for such period, to such extent and on such terms (including the waiver of interest) as they think fit.

(2) If, after the expiration of the relevant period immediately following the date on which any tax became due and payable, the tax or any part of that tax remains unpaid, the Commissioners may, if they think fit, remit the payment of any interest accruing after such expiration on the unpaid tax; and in this subsection, “relevant period” means the period at the end of which the interest on an amount payable in respect of tax would, at the rate from time to time chargeable during that period in respect of interest on tax, equal the amount of such tax.

(3) If, after the expiration of 20 years from the date on which any tax became due and payable, the tax or any part of that tax remains unpaid, the Commissioners may, if they think fit, remit the payment of such tax or any part of that tax and all or any interest on that tax.

(4) Where, in the opinion of the Commissioners, the complication of circumstances affecting a gift or inheritance or the value of that gift or inheritance or the assessment or recovery of tax on that gift or inheritance are such as to justify them in doing so, they may compound the tax payable on the gift or inheritance on such terms as they shall think fit, and may give a discharge to the person or persons accountable for the tax on payment of the tax according to such composition.

Tax to be a charge.

[CATA 1976 s47]

60.—(1) Tax due and payable in respect of a taxable gift or a taxable inheritance shall, subject to this section, be and remain a charge on the property (other than money or negotiable instruments) of which the taxable gift or taxable inheritance consists at the valuation date and the tax shall have priority over all charges and interests created by the donee or successor or any person claiming in right of the donee or successor or on that donee or successor's behalf, but where any settled property comprised in any taxable gift or taxable inheritance shall be subject to any power of sale, exchange, or partition, exercisable with the consent of the donee or successor, or by the donee or successor with the consent of another person, the donee or successor shall not be precluded by the charge of tax on that donee or successor's taxable gift or taxable inheritance from consenting to the exercise of such power, or exercising any power with proper consent, as the case may be; and where any such power is exercised, the tax shall be charged on the property acquired, in substitution for charging it on the property previously comprised in the gift or inheritance, and on all moneys arising from the exercise of any such power, and on all investments of such moneys.

(2) Property comprised in a taxable gift or taxable inheritance shall not, as against a bona fide purchaser or mortgagee for full consideration in money or money's worth, or a person deriving title from or under such a purchaser or mortgagee, remain charged with or liable to the payment of tax after the expiration of 12 years from the date of the gift or the date of the inheritance.

(3) Tax shall not be a charge on property under subsection (1) as against a bona fide purchaser or mortgagee of such property for full consideration in money or money's worth without notice, or a person deriving title from or under such a purchaser or mortgagee.

Receipts and certificates.

[CATA 1976 s48]

61.—(1) When any amount in respect of tax is paid, the Commissioners shall give a receipt for the payment.

(2) The Commissioners shall, on application to them by a person who has paid the tax in respect of any property comprised in any taxable gift or taxable inheritance, give to the person a certificate, in such form as they think fit, of the amount of the tax paid by that person in respect of that property.

(3) The Commissioners shall, on application to them by a person who is an accountable person in respect of any of the property of which a taxable gift or taxable inheritance consists, if they are satisfied that the tax charged on the property in respect of the taxable gift or taxable inheritance has been or will be paid, or that there is no tax so charged, give a certificate to the person, in such form as they think fit, to that effect.

(4) Where a person who is an accountable person in respect of the property of which a taxable gift or taxable inheritance consists has—

(a) delivered to the Commissioners, a full and true return of all the property comprised in the gift or inheritance on the valuation date and such particulars as may be relevant to the assessment of tax in respect of the gift or inheritance,

(b) made on that return an assessment of such amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid, and

(c) duly paid the amount of such tax (if any),

the Commissioners may give a certificate to the person, in such form as they think fit, to the effect that the tax charged on the property in respect of the taxable gift or taxable inheritance has been paid or that there is no tax so charged.

(5) A certificate referred to in subsection (3) or (4) shall discharge the property from liability for tax (if any) in respect of the gift or inheritance, to the extent specified in the certificate, but shall not discharge the property from tax in case of fraud or failure to disclose material facts and, in any case, shall not affect the tax payable in respect of any other property or the extent to which tax is recoverable from any accountable person or from the personal representatives of any accountable person, but a certificate purporting to be a discharge of the whole tax payable in respect of any property included in the certificate in respect of a gift or inheritance shall exonerate from liability for such tax a bona fide purchaser or mortgagee for full consideration in money or money's worth without notice of such fraud or failure and a person deriving title from or under such a purchaser or mortgagee.

(6) Subject to subsection (7), where tax is chargeable on the taxable value of a taxable gift or taxable inheritance and—

(a) application is made to the Commissioners by any person (in this section referred to as “the applicant”)—

(i) who is a person accountable, but not primarily accountable, for the payment of the whole or part of the tax, or

(ii) who is the personal representative of any person referred to in subparagraph (i),

and

(b) the applicant—

(i) delivers to the Commissioners a full and true return of all the property comprised in the gift or inheritance and such particulars as may be relevant to the assessment of tax in respect of the gift or inheritance, and

(ii) makes on that return an assessment of such amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid,

the Commissioners may, on payment of the tax assessed by the applicant, give a certificate to the applicant which shall discharge the applicant from any other claim for tax in respect of the gift or inheritance.

(7) A certificate by the Commissioners under subsection (6) shall not discharge the applicant in the case of fraud or failure to disclose material facts within that applicant's own knowledge and shall not affect any further tax that may be payable by the applicant if any further property is afterwards shown to have been comprised in the taxable gift or taxable inheritance to which the certificate relates and in respect of which further property the applicant is liable for the tax.

Certificate relating to registration of title based on possession.

[FA 1994 s146]

62.—(1) In this section—

“the Act of 1964” means the Registration of Title Act 1964 ;

“the Registrar” means the Registrar of Titles;

“relevant period”, in relation to a person's application to be registered as owner of property, means the period commencing on 28 February 1974 and ending on the date as of which the registration was made, but—

(a) where the certificate referred to in subsection (2) is a certificate for a period ending prior to the date of the registration, the period covered by the certificate shall be deemed to be the relevant period if, at the time of the registration, the Registrar had no reason to believe that a death relevant to the application for registration occurred after the expiration of the period covered by the certificate, and

(b) where the registration of the person (if any) who, at the date of that application, was the registered owner of the property had been made as of a date after 28 February 1974, the relevant period shall commence on the date as of which that registration was made;

“the Rules of 1972” means the Land Registration Rules 1972 ( S.I. No. 230 of 1972 ).

(2) A person shall not be registered as owner of property in a register of ownership maintained under the Act of 1964 on foot of an application made to the Registrar on or after the date of the passing of this Act which is—

(a) based on possession, and

(b) made under the Rules of 1972, or any other rule made for carrying into effect the objects of the Act of 1964,

unless the applicant produces to the Registrar a certificate issued by the Commissioners to the effect that the Commissioners are satisfied—

(i) that the property did not become charged with gift tax or inheritance tax during the relevant period, or

(ii) that any charge for gift tax or inheritance tax to which the property became subject during that period has been discharged, or will (to the extent that it has not been discharged) be discharged within a time considered by the Commissioners to be reasonable.

(3) In the case of an application for registration in relation to which a solicitor's certificate is produced for the purpose of rule 19(3), 19(4) or 35 of the Rules of 1972, the Registrar may accept that the application is not based on possession if the solicitor makes to the Registrar a declaration in writing to that effect.

(4) Where, on application to them by the applicant for registration, the Commissioners are satisfied that they may issue a certificate for the purpose of subsection (2), they shall issue a certificate for that purpose, and the certificate and the application for that certificate shall be on a form provided by the Commissioners.

(5) A certificate issued by the Commissioners for the purpose of subsection (2) shall be in such terms and subject to such qualifications as the Commissioners think fit, and shall not be a certificate for any other purpose.

(6) In subsection (2), the reference to a certificate issued by the Commissioners shall be construed as including a reference to a certificate to which subsection (7) relates, and subsection (2) shall be construed accordingly.

(7) (a) In this subsection—

“the relevant particulars” means the particulars of title to the relevant property which are required to be produced to the Registrar for the purposes of paragraph 2 of Form 5 of the Schedule of Forms referred to in the definition of “Forms” contained in rule 2(1) of the Rules of 1972;

“the relevant property” means the property in respect of which the application for registration is being made.

(b) A certificate to which this subsection relates is a certificate by the solicitor for the applicant for registration in which it is certified, on a form provided by the Commissioners, that the solicitor—

(i) is satisfied—

(I) in a case where the applicant is a statutory authority within the definition of “statutory authority” contained in section 3(1) of the Act of 1964, that the market value of the relevant property at the time of the application does not exceed €127,000, or

(II) in any other case, that—

(A) the area of the relevant property does not exceed 5 hectares, and

(B) the market value of the relevant property at the time of the application does not exceed €19,050,

and

(ii) having investigated the title to the relevant property, has no reason to believe that the relevant particulars, in so far as relating to the relevant property at any time during the relevant period, are particulars which related at that time to significant other real property, that is, real property which, if combined with the relevant property for the purposes of subparagraph (i), would cause a limit which applies to the relevant property by virtue of that subparagraph to be exceeded.

(8) Notwithstanding subsection (7), a certificate by the solicitor for the applicant for registration shall be a certificate to which subsection (7) relates if it certifies, on a form provided by the Commissioners, that the solicitor is satisfied that—

(a) the area of the property in respect of which the application for registration is being made does not exceed 500 square metres,

(b) the market value of that property at the time of the application does not exceed €2,540, and

(c) the application is not part of a series of related applications covering a single piece of property the total area of which exceeds 500 square metres or the market value of which at the time of the application exceeds €2,540.

Recovery of tax and penalties.

[CATA 1976 s49]

63.—(1) Any sum due and payable in respect of tax or interest on such tax and any penalty incurred in connection with tax or interest on such tax is deemed to be a debt due by the accountable person or, if that person is dead, by that person's personal representative, to the Minister for Finance for the benefit of the Central Fund and is payable to the Commissioners and may (without prejudice to any other mode of recovery of such tax and interest) be sued for and recovered by action, or other appropriate proceeding, at the suit of the Attorney General or the Minister for Finance or the Commissioners in any court of competent jurisdiction, notwithstanding anything to the contrary contained in the Inland Revenue Regulation Act 1890.

(2) Any person who, having received any sum of money as or for any tax, interest, or penalty under this Act, does not apply the money to the due payment of the tax, interest or penalty, and improperly withholds or detains the same, is accountable for the payment of the tax, interest or penalty to the extent of the amount so received by that person and the same is a debt due by that person to the Minister for Finance for the benefit of the Central Fund and is recoverable in like manner as a debt under subsection (1).

(3) If any accountable person is liable under section 46 to deliver to the Commissioners a return or an additional return and makes default in so doing, the Attorney General or the Minister for Finance or the Commissioners may sue by action or other appropriate proceeding in the Circuit Court for an order directing the person so making default to deliver such return or additional return or to show cause to the contrary; and the Circuit Court may by order direct such accountable person to deliver such return or additional return within such time as may be specified in the order.

(4) Whenever property is subject to a charge by virtue of section 60 , the Attorney General or the Minister for Finance or the Commissioners may sue by action or other appropriate proceeding in any court of competent jurisdiction for, and the court may make, an order directing the owner of the property to pay the tax with which the property is charged.

Application of certain income tax provisions in relation to the collection and recovery of capital acquisitions tax, etc.

[FA 1991 s129(1) to (6)]

64.—(1) In this section “functions” includes powers and duties.

(2) All sums due under this Act shall be paid to the Collector or to such person as may be nominated under this section.

(3) Section 928(1) and 964(2) of the Taxes Consolidation Act 1997 , shall, with any necessary modifications, apply in relation to an assessment of tax, a correcting assessment of tax, or an additional assessment of tax as it applies in relation to assessments to income tax.

(4) The Collector shall collect and levy the tax from time to time charged in all assessments, correcting assessments and additional assessments of which particulars have been transmitted to the Collector under subsection (3).

(5) All the provisions of the Income Tax Acts relating to the collection and recovery of income tax shall, subject to any necessary modifications, apply in relation to tax as they apply in relation to income tax chargeable under Schedule D.

(6) (a) The Commissioners may nominate persons to exercise on behalf of the Collector any or all of the functions conferred on the Collector by this section and, accordingly, those functions, as well as being exercisable by the Collector, shall also be exercisable on the Collector's behalf by persons so nominated.

(b) A person shall not be nominated under this subsection unless that person is an officer or employee of the Commissioners.

Evidence in proceedings for recovery of tax.

[CATA 1976 s50]

65.— Section 39 of the Finance Act 1926 , shall apply in any proceedings in the Circuit Court or the District Court for or in relation to the recovery of the tax.

PART 8

Appeals

Appeals regarding value of real property.

[CATA 1976 s51]

66.—(1) If a person is aggrieved by the decision of the Commissioners as to the market value of any real property, that person may appeal against the decision in the manner prescribed by section 33 of the Finance (1909-10) Act 1910, and the provisions as to appeals under that section of that Act shall apply accordingly with any necessary modifications.

(2) The particulars of any transfer or lease which are presented to or obtained by the Commissioners under section 12(2) of the Stamp Duties Consolidation Act 1999 shall, in any appeal under this section, be received as prima facie evidence of all matters and things stated in such particulars.

Appeals in other cases.

[CATA 1976 s52]

67.—(1) In this section—

“Appeal Commissioners” has the meaning assigned to it by section 850 of the Taxes Consolidation Act 1997 ;

“appellant” means a person who appeals to the Appeal Commissioners under subsection (2).

(2) Subject to the other provisions of this Act, a person who is called on by the Commissioners to pay an assessment of tax in respect of any property and who is aggrieved by the assessment may, in accordance with this section, appeal to the Appeal Commissioners against the assessment and the appeal shall be heard and determined by the Appeal Commissioners whose determination shall be final and conclusive unless the appeal is required to be reheard by a judge of the Circuit Court or a case is required to be stated in relation to it for the opinion of the High Court on a point of law.

(3) An appeal shall not lie under this section in relation to the market value of real property.

(4) A person who intends to appeal under this section against an assessment shall, within 30 days after the date of the assessment, give notice in writing to the Commissioners of that person's intention to appeal against the assessment.

(5) (a) Subject to this section, the provisions of the Income Tax Acts relating to—

(i) the appointment of times and places for the hearing of appeals,

(ii) the giving of notice to each person who has given notice of appeal of the time and place appointed for the hearing of that person's appeal,

(iii) the determination of an appeal by agreement between the appellant and an officer appointed by the Commissioners in that behalf,

(iv) the determination of an appeal by the appellant giving notice of that appellant's intention not to proceed with the appeal,

(v) the hearing and determination of an appeal by the Appeal Commissioners, including the hearing and determination of an appeal by one Appeal Commissioner,

(vi) the publication of reports of determinations of the Appeal Commissioners,

(vii) the determination of an appeal through the neglect or refusal of a person who has given notice of appeal to attend before the Appeal Commissioners at the time and place appointed,

(viii) the extension of the time for giving notice of appeal and the readmission of appeals by the Appeal Commissioners and the provisions which apply where action by means of court proceedings has been taken,

(ix) the rehearing of an appeal by a judge of the Circuit Court and the statement of a case for the opinion of the High Court on a point of law,

(x) the payment of tax in accordance with the determination of the Appeal Commissioners notwithstanding that an appeal is required to be reheard by a judge of the Circuit Court or that a case for the opinion of the High Court on a point of law has been required to be stated or is pending,

(xi) the procedures for appeal,

(xii) the refusal of an application for an appeal hearing,