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TAXES CONSOLIDATION ACT, 1997
Transfer of assets abroad
Charge to income tax on transfer of assets abroad.
[FA74 s57 preamble and (1) to (7) and (8)(a), (b), (c), (e) and (f)]
806. —(1) In this section—
“assets” includes property or rights of any kind;
“associated operation”, in relation to any transfer, means an operation of any kind effected by any person in relation to any of the assets transferred or any assets representing whether directly or indirectly any of the assets transferred, or to the income arising from any such assets, or to any assets representing whether directly or indirectly the accumulations of income arising from any such assets;
“benefit” includes a payment of any kind;
“company” means any body corporate or unincorporated association;
“transfer”, in relation to rights, includes the creation of those rights.
(2) For the purposes of this section—
(a) any body corporate incorporated outside the State shall be treated as if it were resident out of the State whether it is so resident or not,
(b) a reference to an individual shall be deemed to include the husband or wife of the individual, and
(c) references to assets representing any assets, income or accumulations of income include references to shares in or obligations of any company to which, or obligations of any other person to whom, those assets, that income or those accumulations are or have been transferred.
(3) This section shall apply for the purpose of preventing the avoidance by individuals ordinarily resident in the State of liability to income tax by means of transfers of assets by virtue or in consequence of which, either alone or in conjunction with associated operations, income becomes payable to persons resident or domiciled out of the State.
(4) Where by virtue or in consequence of any such transfer, either alone or in conjunction with associated operations, such an individual has power to enjoy (within the meaning of this section), whether forthwith or in the future, any income of a person resident or domiciled out of the State which, if it were income of that individual received by that individual in the State, would be chargeable to tax by deduction or otherwise, that income shall, whether it would or would not have been chargeable to tax apart from this section, be deemed to be income of that individual for the purposes of the Income Tax Acts.
(5) (a) In this subsection, “capital sum” means—
(i) any sum paid or payable by means of loan or repayment of a loan, and
(ii) any other sum paid or payable otherwise than as income, being a sum not paid or payable for full consideration in money or money's worth.
(b) Where, whether before or after any such transfer, such an individual receives or is entitled to receive any capital sum the payment of which is in any way connected with the transfer or any associated operation, any income which, by virtue or in consequence of the transfer, either alone or in conjunction with associated operations, has become the income of a person resident or domiciled out of the State shall, whether it would or would not have been chargeable to tax apart from this section, be deemed to be the income of that individual for the purposes of the Income Tax Acts.
(6) An individual shall for the purposes of this section be deemed to have power to enjoy income of a person resident or domiciled out of the State where—
(a) the income is in fact so dealt with by any person as to be calculated, at some point of time and whether in the form of income or not, to enure for the benefit of the individual,
(b) the receipt or accrual of the income operates to increase the value to the individual of any assets held by the individual or for the individual's benefit,
(c) the individual receives or is entitled to receive at any time any benefit provided or to be provided out of that income or out of moneys which are or will be available for the purpose by reason of the effect or successive effects of the associated operations on that income and on any assets which directly or indirectly represent that income,
(d) the individual has power, by means of the exercise of any power of appointment or power of revocation or otherwise, to obtain for himself or herself, whether with or without the consent of any other person, the beneficial enjoyment of the income, or may in the event of the exercise of any power vested in any other person become entitled to the beneficial enjoyment of the income, or
(e) the individual is able, in any manner whatever and whether directly or indirectly, to control the application of the income.
(7) In determining whether an individual has power to enjoy income within the meaning of this section, regard shall be had to the substantial result and effect of the transfer and any associated operations, and all benefits which may at any time accrue to the individual (whether or not the individual has rights at law or in equity in or to those benefits) as a result of the transfer and any associated operations shall be taken into account irrespective of the nature or form of the benefits.
(8) Subsections (4) and (5) shall not apply where the individual shows in writing or otherwise to the satisfaction of the Revenue Commissioners—
(a) that the purpose of avoiding liability to taxation was not the purpose or one of the purposes for which the transfer or associated operations or any of them was effected, or
(b) that the transfer and any associated operations were bona fide commercial transactions and were not designed for the purpose of avoiding liability to taxation.
(9) In any case where a person is aggrieved by a decision taken by the Revenue Commissioners in exercise of their functions under subsection (8), the person shall be entitled to appeal to the Appeal Commissioners against the decision of the Revenue Commissioners and the Appeal Commissioners shall hear and determine the appeal as if it were an appeal against an assessment to tax, and the provisions of the Income Tax Acts relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.
Deductions and reliefs in relation to income chargeable to income tax under section 806 .
807. —(1) Income tax chargeable by virtue of section 806 shall be charged under Case IV of Schedule D.
(2) In computing the liability to income tax of an individual chargeable by virtue of section 806 , the same deductions and reliefs shall be allowed as would have been allowed if the income deemed to be income of the individual by virtue of that section had actually been received by the individual.
(3) Where an individual has been charged to income tax on any income deemed to be income of the individual by virtue of section 806 and that income is subsequently received by the individual, it shall be deemed not to form part of the individual's income again for the purposes of the Income Tax Acts.
(4) In any case where an individual has for the purposes of section 806 power to enjoy income of a person abroad by reason of receiving any such benefit referred to in subsection (6)(c) of that section, the individual shall be chargeable to income tax by virtue of that section under Case IV of Schedule D for the year of assessment in which the benefit is received on the whole of the amount or value of that benefit, except in so far as it is shown that the benefit derives directly or indirectly from income on which the individual has already been charged to income tax for that or a previous year of assessment.
Power to obtain information.
[FA74 s59(1) to (5); FA77 s3; FA97 s146(1) and Sch9 PtI par8(2)]
808. —(1) In this section, “settlement” and “settlor” have the same meanings respectively as in section 10 .
(2) The Revenue Commissioners or such officer as the Revenue Commissioners may appoint may by notice in writing require any person to furnish them within such time as they may direct (not being less than 28 days) with such particulars as they think necessary for the purposes of sections 806 , 807 and 809 .
(3) The particulars which a person shall furnish under this section, if required by such a notice to do so, shall include particulars as to—
(a) transactions with respect to which the person is or was acting on behalf of others;
(b) transactions which in the opinion of the Revenue Commissioners, or of such officer as the Revenue Commissioners may appoint, it is proper that they should investigate for the purposes of sections 806 , 807 and 809 , notwithstanding that in the opinion of the person to whom the notice is given no liability to tax arises under those sections;
(c) whether the person to whom the notice is given has taken or is taking any (and if so what) part in any (and if so what) transactions of a description specified in the notice.
(4) Notwithstanding anything in subsection (3), a solicitor shall not be deemed for the purposes of paragraph (c) of that subsection to have taken part in a transaction by reason only that the solicitor has given professional advice to a client in connection with that transaction, and shall not, in relation to anything done by the solicitor on behalf of a client, be compellable under this section, except with the consent of the client, to do more than state that the solicitor is or was acting on behalf of a client, and specify the name and address of the client and also—
(a) in the case of anything done by the solicitor in connection with the transfer of any asset by or to an individual ordinarily resident in the State to or by any body corporate mentioned in subsection (5), or in connection with any associated operation in relation to any such transfer, to specify the names and addresses of the transferor and the transferee or of the persons concerned in the associated operation, as the case may be;
(b) in the case of anything done by the solicitor in connection with the formation or management of any body corporate mentioned in subsection (5), to specify the name and address of the body corporate;
(c) in the case of anything done by the solicitor in connection with the creation, or with the execution of the trusts, of any settlement by virtue or in consequence of which income becomes payable to a person resident or domiciled out of the State, to specify the names and addresses of the settlor and of that person.
(5) The bodies corporate referred to in subsection (4) are bodies corporate resident or incorporated outside the State which are, or if resident in the State would be, close companies within the meaning of sections 430 and 431 .
(6) Nothing in this section shall impose on any bank the obligation to furnish any particulars of any ordinary banking transactions between the bank and a customer carried out in the ordinary course of banking business, unless the bank has acted or is acting on behalf of the customer in connection with the formation or management of any body corporate mentioned in subsection (4)(b) or in connection with the creation, or with the execution of the trusts, of any settlement mentioned in subsection (4)(c).
809. —Where any income of any person is by virtue of the Income Tax Acts, and in particular, but without prejudice to the generality of the foregoing, by virtue of section 806 , to be deemed to be income of any other person, that income shall not be exempt from tax either—
by reason of the first-mentioned person not being resident, or not being ordinarily resident, or being neither domiciled nor ordinarily resident, in the State.
Application of Income Tax Acts.
810. —The provisions of the Income Tax Acts relating to the charge, assessment, collection and recovery of tax, to appeals against assessments and to cases to be stated for the opinion of the High Court shall apply to income tax chargeable by virtue of section 806 subject to any necessary modifications.