PART 6

Capital Acquisitions Tax

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

200. —Section 36 of the Principal Act is hereby amended—

(a) in paragraph (a) of subsection (1) by the substitution of the following subparagraph for subparagraph (iii):

“(iii) a reference, other than in subparagraph (i) or 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) in subsection (4) by the substitution of the following paragraphs for paragraphs (c) and (d):

“(c) so far as it is a taxable gift taken on or after the 26th day of March, 1984, and before the 2nd day of December, 1998, the aggregate of the taxable values of all taxable gifts taken by the donee on or after the 2nd day of June, 1982, exceeds an amount which is 80 per cent of the threshold amount (as defined in the Second Schedule) which applies in the computation of the tax on that aggregate; or

(d) so far as it is a taxable gift taken on or after the 2nd day of December, 1998, the aggregate of the taxable values of all taxable gifts taken by the donee on or after the 2nd day of December, 1988, exceeds an amount which is 80 per cent of the threshold amount (as defined in the Second Schedule) which applies in the computation of the tax on that aggregate; or

(e) the donee or, in a case to which section 23(1) 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

(c) by the insertion of the following subsections after subsection (11):

“(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 therein) 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 taken on or after the 11th day of February, 1999, in the case where—

(a) the taxable value of the taxable gift exceeds an amount which is 80 per cent of the class threshold (as defined in the Second Schedule) 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 the 2nd day of December, 1988, 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 the 2nd day of December, 1988, 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, on or after the 11th day of February, 1999, 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.”.

201. —(1) The Second Schedule to the Principal Act is hereby amended in paragraph 3(a)(ii) (inserted by the Finance Act, 1997 ) by the substitution of “2nd day of December, 1988” for “2nd day of June, 1982”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 2nd day of December, 1998.

202. —(1) Section 41 of the Principal Act is hereby amended by the insertion of the following subsection after subsection (2):

“(2A) Notwithstanding the provisions of subsection (2), interest shall not be payable upon the tax—

(a) to the extent to which section 19(5)(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 55(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 135(2) of the Finance Act, 1994 , 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 126 of that Act ceases to be applicable,

(d) to the extent to which section 166(6) of the Finance Act, 1995 , applies, for the duration of the period from the valuation date to the date the exemption ceases to apply.”.

(2) This section shall have effect where the event which causes the exemption or reduction in question to cease to be applicable occurs on or after the 11th day of February, 1999.

203. —Section 51 of the Principal Act is hereby amended by the insertion of the following subsection:

“(2) The particulars of any transfer or lease which are presented to or obtained by the Commissioners under section 107 of the Finance Act, 1994 , shall, in any appeal under this section, be received as prima facie evidence of all matters and things stated in such particulars.”.

204. —Section 53(1) of the Principal Act shall have effect, as respects relevant periods ending after the 31st day of December, 1998, as if “£1,000” were substituted for “£500” (provided for by section 44 of the Finance Act, 1978 ).

205. —Section 58 of the Principal Act is hereby amended by the insertion of the following subsection after subsection (2):

“(3) (a) The receipt by an incapacitated individual of the whole or any part of trust funds which are held on a qualifying trust, or of the income therefrom, shall not be a gift or an inheritance.

(b) In this subsection ‘incapacitated individual’, ‘trust funds’ and ‘qualifying trust’ have the meanings assigned to them, respectively, by section 189A (inserted by the Finance Act, 1999) of the Taxes Consolidation Act, 1997 .

(c) This subsection shall apply in relation to gifts or inheritances taken on or after the 6th day of April, 1997.”.

206. —The Principal Act is hereby amended by the insertion of the following section after section 59A:

“59B.—(1) The whole or any part of a retirement fund which is comprised in an inheritance which is taken upon the death of a disponer dying on or after the date of the passing of the Finance Act, 1999, shall be exempt from tax in relation to that inheritance and in relation to a charge for tax arising on that death by virtue of section 110 of the Finance Act, 1993 , and the value thereof shall not be taken into account in computing tax, where—

(a) the disposition under which the inheritance is taken is the will or intestacy of the disponer, and

(b) the successor is a child of the disponer and had attained 21 years of age at the date of that disposition.

(2) In this section ‘retirement fund’, in relation to an inheritance taken on the death of a disponer, means an approved retirement fund or an approved minimum retirement fund, within the meaning of section 784A or 784C of the Taxes Consolidation Act, 1997 , being a fund which is wholly comprised of all or any of the following, that is to say—

(a) property which represents in whole or in part the accrued rights of the disponer, or of a predeceased spouse of the disponer, under an annuity contract or retirement benefits scheme approved by the Revenue Commissioners for the purposes of Chapter 1 or Chapter 2 of Part 30 of that Act.

(b) any accumulations of income thereof, or

(c) property which represents in whole or in part those accumulations.”.