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14 1970

FINANCE ACT, 1970

PART III

Death Duties

Amendment of section 21 of Finance Act, 1956.

33. —(1) Where—

(a) stocks, shares or securities passing on a death occurring after the 5th day of April, 1966, are not at such passing, stocks, shares or securities in respect of which a certificate under section 329 of the Income Tax Act, 1967 , or a certificate under section 332 of that Act has been given but are stocks, shares or securities in respect of which the conditions specified in paragraphs (a) to (c) of subsection (2) of the said section 329 and in section 330 (2) of the Income Tax Act, 1967 , or the conditions specified in paragraphs (a) and (b) of subsection (2) of the said section 332 are complied with at such passing, and

(b) a certificate under the said section 329 or a certificate under the said section 332 is given within two years after such passing,

the provisions of section 21 of the Finance Act, 1956 , shall apply to such stocks, shares or securities as if the said section 329 or the said section 332, as the case may be, had applied to them at such passing.

(2) Where in any such case estate duty has been paid on the full value of any stocks, shares or securities, as estimated in accordance with the provisions of section 7 (5) of the Finance Act, 1894, the Revenue Commissioners shall make such repayment as is appropriate having regard to the provisions of this section.

Amendment of section 20 of Finance Act, 1965.

34. —(1) Section 20 of the Finance Act, 1965 , is hereby amended—

(a) by the substitution in subsections (3) (a) and (4) (a) (i) of “company which then was or thereafter became a company controlled by the deceased” for “company controlled by the deceased”, and

(b) by the insertion at the end of subsection (4) of the following paragraph:

“(d) Where, in a case to which paragraph (a) (i) applies, the company controlled by the deceased was a non-trading company, this subsection shall have effect as if in paragraph (a) (ii) ‘other than dividends or interest on stocks, shares or debentures of the company’ were deleted.”

(2) Where, for the purposes of subsection (5) of the said section 20, a non-trading company is deemed to be voluntarily wound up and its assets realised on a particular date, the amount deemed to be so realised shall be estimated to be the price which, in the opinion of the Revenue Commissioners, the assets would fetch if sold in the open market on that date.

(3) This section shall have effect only in relation to a death occurring after the passing of this Act.

Amendment of section 24 of Finance Act, 1965.

35. —(1) Section 24 (1) of the Finance Act, 1965 , is hereby amended by the substitution of the following definition for the definition of “dependent child”:

“‘dependent child’ means—

(i) a child (including a step-child and a child adopted under the provisions of the Adoption Acts, 1952 and 1964) who had not attained the age of 16 years at the date of the death of the deceased or who was then receiving full time instruction at any university, college, school or other educational establishment or undergoing training by any person for any trade or profession in such circumstances that the child was required to devote the whole of his time to the training for a period of not less than two years; and

(ii) a child (including a step-child and a child adopted under the provisions of the Adoption Acts, 1952 and 1964) who at the date of the death of the deceased was permanently incapacitated by reason of mental or physical infirmity from maintaining himself and had become so permanently incapacitated before he had attained the age of 21 years or while he had been in receipt of full time instruction at any university, college, school or other educational establishment or undergoing training by any person for any trade or profession in such circumstances that the child had been required to devote the whole of his time to the training for a period of not less than two years;”.

(2) This section shall have effect only in relation to a death occurring after the passing of this Act.

Amendment of section 45 of Finance Act, 1969.

36. —(1) Section 45 (1) of the Finance Act, 1969 , is hereby amended by the substitution of the following definition for the definition of “child”—

“‘child’ means—

(a) a child (including a step-child and a child adopted under the provisions of the Adoption Acts, 1952 and 1964) of the deceased who was living at his death and who had not then attained the age of 16 years or, who was then receiving full time instruction at any university, college, school or other educational establishment or undergoing training by any person for any trade or profession in such circumstances that the child had been required to devote the whole of his time to the training for a period of not less than two years, and

(b) a child (including a step-child and a child adopted under the provisions of the Adoption Acts, 1952 and 1964) who at the death of the deceased was permanently incapacitated by reason of mental or physical infirmity from maintaining himself and had become so permanently incapacitated before he had attained the age of 21 years or while he had been in receipt of full time instruction at any university, college, school or other educational establishment or undergoing training by any person for any trade or profession in such circumstances that the child had been required to devote the whole of his time to the training for a period of not less than two years;”.

(2) This section shall have effect only in relation to a death occurring after the passing of this Act.

Relief from double charge of duty in certain cases.

37. —(1) Where in connection with a death occurring after the passing of this Act there arises by reason of subsection (4) of section 20 of the Finance Act, 1965 , a claim for estate duty in respect of the assets of a company controlled by the deceased within the meaning of the said section 20, and estate duty is payable in connection with the same death in respect of stock or shares (other than debentures) in the company, then for the purposes of section 7 (10) of the Finance Act, 1894, the liability for estate duty in respect of the said stock or shares shall be deemed to be a liability in respect of the net assets of the company as if such assets had been held by it in trust for the members of the company taking the interests of such members as they subsisted immediately before the death of the deceased and the said section 7 (10) shall have effect accordingly.

(2) For the purposes of this section “member”, in relation to a company, means the beneficial owner of any stock or shares in the company and the reference to a company holding its assets in trust for its members shall have effect as if the assets were held in trust for the members in accordance with the rights attaching to the stock or shares in the company and as if the company had acted in the capacity of a trustee only with power to carry on the business of the company and to employ the assets of the company therein.

Extension of exemption for gifts to the State.

38. —(1) Where a gift to the State (within the meaning of section 23 (4) of the Finance Act, 1961 ) is limited to take effect indefeasibly on the death of the survivor of the donor and the spouse of the donor and both deaths occur after the passing of this Act, the property the subject matter of the gift shall not be included in the property passing or deemed to pass on either death.

(2) Subsection (2) of the said section 23 shall apply in relation to the exemption granted by subsection (1) of this section and subsection (3) of the said section 23 shall apply in relation to the duty becoming payable on the termination of that exemption.

Restriction of exemption from duty of certain securities.

39. —(1) In this section—

company” means a company controlled by the deceased within the meaning of section 20 of the Finance Act, 1965 ;

deceased” means a person dying after the passing of this Act who immediately prior to his death was domiciled or ordinarily resident in the State;

member”, in relation to a company, means a holder in his own right of any share in or debenture of the company and a person interested in any share in or debenture of the company held, whether by himself or another, otherwise than in the holder's own right and any other person to whom the company is under any liability otherwise than for the purposes of the business of the company wholly and exclusively;

securities” means securities (including debentures, debenture stock, mortgage bonds and mortgage stock and certificates of charge under the Agricultural Credit Acts, 1927 to 1965) issued, whether before or after the passing of this Act, with a condition that they be exempt from taxation when in the beneficial ownership of persons neither domiciled nor ordinarily resident in the State.

(2) Where in respect of any securities the exemption from taxation applies in connection with the death of the deceased, then, subject to the exceptions provided by the following provisions of this section—

(a) there shall be deemed, for the purposes of estate duty, legacy duty or succession duty, as the case may be, to be included in the property in respect of which duty is leviable on the death a sum of money equal to the value upon which, but for the exemption, duty would have been payable;

(b) in relation to estate duty—

(i) the sum so deemed to be included shall for purposes of aggregation and of determining the persons accountable for duty be treated as having been property to which the deceased was absolutely entitled at his death, but where the circumstances in which the exemption so applies as regards the securities were not brought about by the deceased, paragraph (a) of this subsection shall not apply so as to make the personal representatives of the deceased accountable for the duty or to increase the amount of duty beyond what would have been due had there been no exemption;

(ii) in so far as the duty imposed by the said paragraph (a) has not been paid by the deceased's personal representatives, accountability for the duty shall be imposed on any person who, if the exemption had not applied to the securities, would have been accountable for the duty thereon under the enactments relating to estate duty;

(iii) any payment made by the deceased's personal representatives shall, for the purposes of this subsection, be regarded as a payment of the duty imposed by the said paragraph (a) only so far as there is no other estate duty leviable on the death for which they are accountable and which has not been paid;

(c) in relation to legacy duty or succession duty, as the case may be, the sum so deemed to be included shall, for the purpose of determining the rate of duty and the persons accountable for duty, be treated as a legacy or succession derived from the same testator or predecessor as are the securities and as being subject to the same trusts as the securities.

(3) Subsection (2) of this section shall not apply where it is shown to the satisfaction of the Revenue Commissioners or, on appeal under section 10 of the Finance Act, 1894, of the court entertaining the appeal, that the circumstances in which the exemption applies in respect of the securities were not brought about for the purpose, or for purposes which include the purpose, of obtaining the benefit of the exemption directly or indirectly for, or for the estate of, a person domiciled or ordinarily resident in the State or for a company any member of which was so domiciled or ordinarily resident.

(4) Subsection (2) of this section shall not apply in respect of any securities if no person who would be accountable for the duty leviable on the death of the deceased in respect of such securities on the assumption that the exemption did not apply thereto is a person domiciled or ordinarily resident in the State or is a company.

(5) If a donee or other person being, on the assumption specified in subsection (4) of this section, contingently accountable for duty predeceases the deceased, that subsection shall apply, so far as it relates to that donee or other person, by reference to him and not by reference to his personal representatives or successors in title, and according to where he was domiciled or ordinarily resident at his death.

(6) (a) If the persons who would, on the assumption specified in subsection (4) of this section, be so accountable consist of or include trustees of a settlement created before the death, whether or not subsisting at the death, the said subsection (4) shall not have effect but subsection (2) of this section shall not apply in respect of the securities if and to the extent that it is shown to the satisfaction of the Revenue Commissioners, or on appeal under section 10 of the Finance Act, 1894, of the court entertaining the appeal, that the burden of the duty, having regard to the interests subsisting immediately after the death, would be borne by any person who is neither domiciled nor ordinarily resident in the State, and for the purposes of this subsection, interests in income, interests in capital, interests in possesion and interests in reversion shall all be taken into account.

(b) Where, on the assumption specified in subsection (4) of this section, the burden of the duty would be borne, in whole or in part, by a company, paragraph (a) of this subsection shall have effect as if the assets of the company were held by it in trust for its members taking the interests of the members in the company as they subsisted immediately before the death of the deceased.

(7) If interests under a trust subsisting at the death fall to be taken into account under subsection (6) of this section, and all interests in the trust other than reversionary interests are interests contingent on the exercise of the discretion of any of the trustees or of any other person, subsection (2) of this section shall not be displaced by subsection (6) if any of the persons interested in the trust is domiciled or ordinarily resident in the State.

(8) Subsection (6), and not subsection (4), of this section shall apply if the persons who would, on the assumption specified in subsection (4) of this section, be so accountable consist of or include a company as if the assets of the company were held by it in trust for its members taking the interests of such members in the company as they subsisted immediately before the death of the deceased.

(9) Nothing in subsections (4) to (8) of this section shall prevent subsection (2) thereof from applying in respect of any securities settled under a settlement revocable in whole or in part at any time after the death of the deceased at the instance of any person.

(10) Section 8 (4) of the Finance Act, 1894, shall apply as if “and his executor is not accountable for the estate duty in respect of such property” were deleted both for the purposes of accountability for duty leviable by virtue of this section and also for the purposes of this section as it relates to the persons who would be accountable for duty on the assumptions specified in subsections (2), (4) and (6) of this section.

(11) For the purposes of this section—

(a) the references in subsection (6) and subsection (8), of this section to a company holding its assets in trust for its members shall have effect as if the assets were held in trust for the members in accordance with the rights attaching to the shares in and the debentures of the company and the terms on which any such liability as is mentioned in subsection (1) of this section was incurred and as if the company had acted in the capacity of a trustee only with power to carry on the business of the company and to employ the assets of the company therein;

(b) interests contingent on the exercise of a discretion referred to in subsection (7) of this section include interests, whether in capital or income, which are affected by the exercise of a discretion in favour of some person other than the person entitled to the interest.