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10 1985

FINANCE ACT, 1985

PART V

Capital Acquisition Tax

Interpretation ( Part V ).

58. —In this Part “the Principal Act” means the Capital Acquisitions Tax Act, 1976 .

Exemption for spouses.

59. —(1) Notwithstanding the provisions of the Principal Act, an inheritance taken by a successor, who is at the date of the inheritance the spouse of the disponer, shall be exempt from tax and shall not be taken into account in computing tax.

(2) This section shall have effect in relation to an inheritance taken on or after the 30th day of January, 1985.

Relief in respect of certain policies of insurance.

60. —(1) In this section—

qualifying insurance policy” means a policy of insurance—

(a) which is in a form approved by the Commissioners for the purposes of this section;

(b) in respect of which annual premiums are paid by the insured during his life; and

(c) which is expressly effected under this section for the purpose of paying relevant tax;

relevant tax” means inheritance tax payable in respect of an inheritance (excluding, in the computation of such tax, an interest in a qualifying insurance policy) taken under a disposition made by the insured, where the inheritance is taken on or after the date of death of the insured and not later than one year after that death.

(2) (a) An interest in a qualifying insurance policy which is comprised in an inheritance taken under a disposition made by the insured shall, to the extent that the proceeds thereof are applied in paying relevant tax, be exempt from tax in relation to that inheritance and shall not be taken into account in computing tax.

(b) An interest in a qualifying insurance policy which is comprised in an inheritance taken under a disposition made by the insured shall, to the extent that the proceeds thereof are not applied in paying relevant tax, and notwithstanding the provisions of the Principal Act, be deemed to be taken on a day immediately after—

(i) the date of death of the insured; or

(ii) the latest date (if any) on which an inheritance is taken in respect of which that relevant tax is payable,

whichever is the later.

(3) Section 143 of the Income Tax Act, 1967 , is hereby amended by the substitution, in subsection (5), of the following paragraphs for paragraph (b)—

“(b) be given in respect of premiums or payments payable during the period of deferment in respect of a policy of deferred assurance; or

(c) be given for the year 1985-86 and subsequent years of assessment in respect of premiums payable in respect of a qualifying insurance policy within the meaning of section 60 of the Finance Act, 1985:”.

Relief from double aggregation.

61. —(1) Property in respect of which tax is chargeable more than once on the same event shall not be included more than once in relation to that event in any aggregate referred to in the Second Schedule to the Principal Act.

(2) Paragraph 7 of Part I of the said Second Schedule shall not have effect in ascertaining the tax payable in respect of property which is chargeable to tax as being taken more than once on the same day.

(3) This section shall have effect in relation to gifts and inheritances taken on or after the 2nd day of June, 1982.

(4) Notwithstanding the provisions of section 46 of the Principal Act, interest shall not be payable on any repayment of tax which arises by virtue of this section where such tax was paid prior to the date of the passing of this Act.

Allowance for prior tax on the same event.

62. —(1) The Principal Act shall have effect, and shall be deemed always to have had effect, as if the following section were inserted after section 34 of that Act:

“34A.—Where tax is charged more than once in respect of the same property on the same event, the net tax payable which is earlier in priority shall not be deducted in ascertaining the taxable value for the purposes of the tax which is later in priority, but shall be deducted from the tax which is later in priority as a credit against the same, up to the net amount of the same.”.

(2) Notwithstanding the provisions of section 46 of the Principal Act, interest shall not be payable on any repayment of tax which arises by virtue of this section where such tax was paid prior to the date of the passing of this Act.

Allowance for capital gains tax on the same event.

63. —(1) Where gift tax or inheritance tax is charged in respect of property on an event happening on or after the 30th day of January, 1985, and the same event constitutes for capital gains tax purposes a disposal of an asset (being the same property or any part of the same property), the capital gains tax, if any, chargeable on the disposal shall not be deducted in ascertaining the taxable value for the purposes of the gift tax or inheritance tax but, in so far as it has been paid, shall be deducted from the net gift tax or inheritance tax as a credit against the same, up to the net amount of the same.

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

Amendment of section 106 (acquisitions by discretionary trusts) of Finance Act, 1984.

64. Section 106 (1) of the Finance Act, 1984 , shall have effect, and shall be deemed always to have had effect, as if “otherwise than for full consideration in money or money's worth paid by the trustees of the trust” were deleted.

Amendment of section 108 (exemptions) of Finance Act, 1984.

65. Section 108 of the Finance Act, 1984 , shall have effect, and shall be deemed always to have had effect, as if the following subsection were added thereto:

“(2) Section 106 shall not apply or have effect—

(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 31 of the Principal Act and section 106, to be taken by a discretionary trust.”.