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2 1999

FINANCE ACT, 1999

Chapter 8

Capital Gains Tax

Amendment of section 541A (treatment of debts on a change in currency) of Principal Act.

87. —(1) Section 541A (inserted by the Finance Act, 1998 ) of the Principal Act is hereby amended—

(a) in subsection (2) by the substitution of “Subject to subsection (4) and notwithstanding any other provision of the Capital Gains Tax Acts” for “Notwithstanding any other provision of the Capital Gains Tax Acts”,

and

(b) by the insertion after subsection (3) of the following subsection:

“(4) (a) In this subsection—

‘assurance company’ has the meaning assigned to it in section 706;

‘life business fund’ has the meaning assigned to it in section 719;

‘special investment fund’ has the meaning assigned to it in section 723;

‘special investment scheme’ has the meaning assigned to it in section 737;

‘undertaking for collective investment’ has the meaning assigned to it in section 738.

(b) Where the person referred to in subsection (1) is a company and either—

(i) the company is an assurance company and the debt referred to in that subsection is an asset of the company's life business fund, or

(ii) the company is an undertaking for collective investment and the debt referred to in that subsection is an asset of the undertaking,

subsection (1) shall not apply and where the day (in this paragraph referred to as ‘the deemed disposal day’) on which, but for this paragraph, the debt would be deemed to be disposed of and reacquired in accordance with subsection (1), is not the day on which an accounting period of the company ends—

(I) in case of an assurance company, section 719(2) shall apply in respect of the debt as if, for this purpose only, the deemed disposal day was the day on which an accounting period of the company ends and the chargeable gain or allowable loss thereby accruing shall be included in the net amount (within the meaning of section 720) in respect of the accounting period in which the deemed disposal day falls, and

(II) in case of an undertaking for collective investment, section 738(4)(a) shall apply in respect of the debt as if, for this purpose only, the deemed disposal day was the day on which an accounting period of the company ends and the chargeable gain or allowable loss thereby accruing shall be included in the net amount (within the meaning of section 738(4)(b)) in respect of the accounting period in which the deemed disposal day falls.

(c) Where the person referred to in subsection (1) is an undertaking for collective investment and is not a company, subsection (2) shall not apply but the chargeable gain or allowable loss which accrues to the undertaking by virtue of subsection (1) shall be treated as accruing to the undertaking by virtue of paragraph (a) of section 738(4) and the provisions of that section shall apply accordingly.

(d) Subsection (2) shall not apply to a debt which is—

(i) an asset of a special investment fund of an assurance company, or

(ii) an asset which is subject to any trust created pursuant to a special investment scheme.”.

(2) This section shall be deemed to have applied as on and from the 31st day of December, 1998.

Amendment of Chapter 3 (assets held in a fiduciary or representative capacity, inheritances and settlements) of Part 19 of Principal Act.

88. —(1) Part 19 of the Principal Act is hereby amended in Chapter 3 by the insertion after section 579 of the following sections:

“Attribution of gains to beneficiaries.

579A.—(1) (a) For the purposes of this section and the following sections of this Chapter, ‘capital payments’ means any payment which is not chargeable to income tax on the recipient or, in the case of a recipient who is neither resident nor ordinarily resident in the State, any payment received otherwise than as income, but does not include a payment under a transaction entered into at arm's length.

(b) In paragraph (a) references to a payment include references to the transfer of an asset and the conferring of any benefit, and to any occasion on which settled property becomes property to which section 567(2) applies.

(c) The amount of a capital payment made by way of loan, and of any other capital payment which is not an outright payment of money, shall be taken to be equal to the value of the benefit conferred by it.

(d) A capital payment shall be treated as received by a beneficiary from the trustees of a settlement if—

(i) the beneficiary receives it from the trustees directly or indirectly,

(ii) it is directly or indirectly applied by the trustees in payment of any debt of the beneficiary or is otherwise paid for the benefit of the beneficiary, or

(iii) it is received by a third party at the beneficiary's direction.

(2) Subject to subsection (10), this section shall apply to a settlement for any year of assessment during which the trustees are, at no time, neither resident nor ordinarily resident in the State.

(3) There shall be computed in respect of every year of assessment for which this section applies the amount on which the trustees would have been chargeable to capital gains tax under section 31 if they had been resident and ordinarily resident in the State in the year of assessment and that amount, together with the corresponding amount in respect of any earlier such year of assessment, so far as not already treated under subsection (4) or section 579F(2) as chargeable gains accruing to beneficiaries under the settlement, is in this section referred to as ‘the trust gains for the year of assessment’.

(4) Subject to this section, the trust gains for a year of assessment shall be treated for the purposes of the Capital Gains Tax Acts as chargeable gains accruing in the year of assessment to beneficiaries of the settlement who receive capital payments from the trustees in the year of assessment or have received such payments in any earlier year of assessment.

(5) The attribution of chargeable gains to beneficiaries under subsection (4) shall be made in proportion to, but shall not exceed, the amounts of capital payments received by them.

(6) A capital payment shall be left out of account for the purposes of subsections (4) and (5) to the extent that chargeable gains have, by reason of the payment, been treated as accruing to the recipient in an earlier year of assessment.

(7) A beneficiary shall not be charged to tax on chargeable gains treated by virtue of subsection (4) as accruing to him or her in any year of assessment unless he or she is domiciled in the State at some time in that year of assessment.

(8) For the purposes of this section a settlement arising under a will or intestacy shall be treated as made by the testator or, as the case may be, intestate at the time of death.

(9) In any case in which the amount of any capital gains tax payable by a beneficiary under a settlement in accordance with this section is paid by the trustees of the settlement, such amount shall not for the purposes of income tax or capital gains tax be regarded as a payment to the beneficiary.

(10) Subsection (2) shall not apply in relation to any year of assessment beginning before the 6th day of April, 1999, and the references in subsections (4) and (5) to capital payments received by beneficiaries do not include references to any payments received before the 11th day of February, 1999, or any payments received on or after that date so far as they represent a chargeable gain which accrued to the trustees in respect of a disposal by the trustees before the 11th day of February, 1999.

(11) Where this section applies so as to charge a person to tax on chargeable gains, section 579 shall not apply in respect of those chargeable gains.

Trustees ceasing to be resident in the State.

579B.—(1) In this section and in the following sections of this Chapter—

‘arrangements’ means arrangements having the force of law by virtue of section 826 (as extended to capital gains tax by section 828);

‘the new assets’ and ‘the old assets’ have the meaning assigned, respectively, to them by section 597(4).

(2) This section shall apply where the trustees of a settlement become at any time (hereafter in this section referred to as the ‘relevant time’) neither resident nor ordinarily resident in the State.

(3) The trustees to whom this section applies shall, for the purposes of the Capital Gains Tax Acts, be deemed—

(a) to have disposed of the defined assets immediately before the relevant time, and

(b) immediately to have reacquired them,

at their market value at that time.

(4) Subject to subsections (5) and (6), the defined assets are all assets constituting settled property of the settlement immediately before the relevant time.

(5) If immediately after the relevant time—

(a) the trustees carry on a trade in the State through a branch or agency, and

(b) any assets are situated in the State and either used in or for the purposes of the trade or used or held for the purposes of the branch or agency,

the assets falling within paragraph (b) shall not be defined assets.

(6) Assets shall not be defined assets if—

(a) they are of a description specified in any arrangements, and

(b) the trustees would, were they to dispose of them immediately before the relevant time, fall to be regarded for the purposes of the arrangements as not being liable in the State to tax on gains accruing to them on the disposal.

(7) Notwithstanding anything in that section—

(a) section 597 shall not apply where the trustees—

(i) have disposed of the old assets, or their interest in them, before the relevant time, and

(ii) acquire the new assets, or their interest in them, after the relevant time, and

(b) where under section 597 a chargeable gain accruing on a disposal of old assets is treated as not accruing until a time later (being the time that the new assets cease to be used for the purposes of a trade or other purposes as referred to in subsection (2) of that section) than the time of the disposal, and, but for this subsection, the later time would fall after the relevant time, the chargeable gain shall be treated as accruing immediately before the relevant time,

unless the new assets are excepted from the application of this subsection by subsection (8).

(8) If at the time when the new assets are acquired—

(a) the trustees carry on a trade in the State through a branch or agency, and

(b) any new assets, which immediately after the relevant time, are situated in the State and either used in or for the purposes of the trade or used or held for the purposes of the branch or agency,

the assets falling within paragraph (b) shall be excepted from the application of subsection (7).

Death of trustee: special rules.

579C.—(1) Subsection (2) applies where—

(a) section 579B applies as a result of the death of a trustee of a settlement, and

(b) within the period of 6 months beginning with the death, the trustees of the settlement become resident and ordinarily resident in the State.

(2) Section 579B shall apply as if the defined assets were restricted to such assets (if any) as—

(a) would be defined assets apart from this section, and

(b) fall within subsection (3).

(3) Assets fall within this subsection if they were disposed of by the trustees in the period which—

(a) begins with the death, and

(b) ends when the trustees become resident and ordinarily resident in the State.

(4) Where—

(a) at any time the trustees of a settlement become resident and ordinarily resident in the State as a result of the death of a trustee of the settlement, and

(b) section 579B applies as regards the trustees of the settlement in circumstances where the relevant time (within the meaning of that section) falls within the period of 6 months beginning with the death,

that section shall apply as if the defined assets were restricted to such assets (if any)—

(i) as would be defined assets but for this section, and

(ii) which the trustees acquired in the period beginning with the death and ending with the relevant time.

Past trustees: liability for tax.

579D.—(1) In this section ‘specified period’, in relation to a year of assessment, means the period beginning with the specified return date for the year of assessment (within the meaning of section 950) and ending 3 years after the time when a return under section 951 for the year of assessment is delivered to the appropriate inspector (within the meaning of section 950).

(2) For the purposes of this section—

(a) where the relevant time (within the meaning of section 579B) falls within the period of 12 months beginning with the 11th day of February, 1999, the relevant period is the period beginning with that day and ending with the relevant time, and

(b) in any other case, the relevant period is the period of 12 months ending with the relevant time.

(3) This section shall apply at any time on or after the 11th day of February, 1999, where—

(a) section 579B applies as regards the trustees (in this section referred to as ‘migrating trustees’) of a settlement, and

(b) any tax, which is payable by the migrating trustees in respect of a chargeable gain accruing to them for a year of assessment (in this section referred to as ‘the year of assessment concerned’) by virtue of section 579B(3), is not paid within 6 months after the date on or before which the tax is due and payable.

(4) The Revenue Commissioners may, at any time before the end of the specified period in relation to the year of assessment concerned, serve on any person to whom subsection (5) applies, a notice—

(a) stating the amount which remains unpaid of the tax payable by the migrating trustees for the year of assessment concerned, and

(b) requiring that person to pay that amount within 30 days of the service of the notice.

(5) This subsection applies to any person who, at any time within the relevant period, was a trustee of the settlement, other than such a person who—

(a) ceased to be a trustee of the settlement before the end of the relevant period, and

(b) shows that, when he or she (or in the case of a company, the company) ceased to be a trustee of the settlement, there was no proposal that the trustees might become neither resident nor ordinarily resident in the State.

(6) Any amount which a person is required to pay by a notice under this section—

(a) may be recovered by that person from the migrating trustees,

(b) shall not be allowed as a deduction in computing income, profits, gains or losses for any tax purposes, and

(c) may be recovered from that person as if it were tax due by such person.

Trustees ceasing to be liable to Irish tax.

579E.—(1) This section shall apply where the trustees of a settlement, while continuing to be resident and ordinarily resident in the State, become at any time (in this section referred to as ‘the time concerned’) on or after the 11th day of February, 1999, trustees who fall to be regarded for the purposes of any arrangements—

(a) as resident in a territory outside the State, and

(b) as not liable in the State to tax on gains accruing on disposals of assets (in this section referred to as ‘relevant assets’) which constitute settled property of the settlement and fall within descriptions specified in the arrangements.

(2) The trustees shall be deemed for all the purposes of the Capital Gains Tax Acts—

(a) to have disposed of their relevant assets immediately before the time concerned, and

(b) immediately to have reacquired them,

at their market value at that time.

(3) Notwithstanding anything in that section—

(a) section 597 shall not apply where—

(i) the new assets are, or an interest in them is, acquired by the trustees of a settlement,

(ii) at the time of the acquisition the trustees are resident and ordinarily resident in the State and fall to be regarded for the purposes of any arrangements as resident in a territory outside the State,

(iii) the assets are of a description specified in those arrangements, and

(iv) the trustees would, were they to dispose of the assets immediately after the acquisition, fall to be regarded for the purposes of the arrangements as not being liable in the State to tax on gains accruing to them on the disposal,

and

(b) where under section 597 a chargeable gain accruing on a disposal of the old assets is treated as not accruing until a time later (being the time that the new assets cease to be used for the purposes of a trade or other purposes as set out in subsection (2) of that section) than the time of the disposal, and but for this paragraph, the latter time would fall after the time concerned, the chargeable gain shall be treated as accruing immediately before the time concerned, if—

(i) the new assets are of a description specified in any arrangements, and

(ii) the trustees would, were they to dispose of the new assets immediately after the time concerned, fall to be regarded for the purposes of those arrangements as not being liable in the State to tax on gains accruing to them on the disposal.

Migrant settlements.

579F.—(1) Where a period (in this section referred to as ‘a non-resident period’) of one or more years of assessment for which section 579A applies to a settlement, succeeds a period (in this section referred to as ‘a resident period’) of one or more years of assessment for each of which section 579A does not apply to the settlement, a capital payment received by a beneficiary in the resident period shall be disregarded for the purposes of section 579A if it was not made in anticipation of a disposal made by the trustees in the non-resident period.

(2) Where—

(a) a non-resident period is succeeded by a resident period, and

(b) the trust gains for the last year of assessment of the non-resident period are not, or not wholly, treated as chargeable gains accruing to beneficiaries, then, subject to subsection (3), those trust gains, or the outstanding part of them, shall be treated as chargeable gains accruing in the first year of assessment of the resident period, to beneficiaries of the settlement who receive capital payments from the trustees in that year of assessment, and so on for the second and subsequent years until the amount treated as accruing to the beneficiaries is equal to the amount of the trust gains for the last year of assessment of the non-resident period.

(3) Subsections (5) and (7) of section 579A shall apply in relation to subsection (2) as they apply in relation to subsection (4) of that section.”.

(2) This section shall apply as on and from the 11th day of February, 1999.

Amendment of Chapter 4 (shares and securities) of Part 19 of Principal Act.

89. —(1) Part 19 of the Principal Act is hereby amended in Chapter 4 by the substitution for section 590 of the following section:

“Attribution to participators of chargeable gains accruing to non-resident company.

590.—(1) In this section—

(a) ‘participator’, in relation to a company, has the meaning assigned to it by section 433(1);

(b) references to a person's interest as a participator in a company are references to the interest in the company which is represented by all the factors by reference to which the person falls to be treated as such a participator; and

(c) references to the extent of such an interest are references to the proportion of the interests as participators of all the participators in the company (including any who are not resident or ordinarily resident in the State) which on a just and reasonable apportionment is represented by that interest.

(2) For the purposes of this section, where—

(a) the interest of any person in a company is wholly or partly represented by an interest (in this subsection referred to as the ‘person's beneficial interest’) which the person has under any settlement, and

(b) the person's beneficial interest is the factor, or one of the factors, by reference to which the person would be treated, apart from this subsection, as having an interest as a participator in the company,

the interest as a participator in the company which would be that person's shall be deemed, to the extent that it is represented by the person's beneficial interest, to be an interest of the trustees of the settlement, and not an interest of the person's, and references in this section, in relation to a company, to a participator shall be construed accordingly.

(3) This section shall apply as respects chargeable gains accruing to a company—

(a) which is not resident in the State, and

(b) which would be a close company if it were resident in the State.

(4) Subject to this section, every person who at the time when the chargeable gain accrues to the company is resident or ordinarily resident in the State, who, if an individual, is domiciled in the State, and who is a participator in the company, shall be treated for the purposes of the Capital Gains Tax Acts as if a part of the chargeable gain had accrued to that person.

(5) The part of the chargeable gain referred to in subsection (4) shall be equal to the proportion of that gain that corresponds to the extent of the participator's interest as a participator in the company.

(6) Subsection (4) shall not apply in the case of any participator in the company to which the gain accrues where the aggregate amount falling under that subsection to be apportioned to the participator and to persons connected with the participator does not exceed one-twentieth of the gain.

(7) This section shall not apply in relation to—

(a) a chargeable gain accruing on the disposal of assets, being tangible property, whether movable or immovable, or a lease of such property, where the property was used, and used only, for the purposes of a trade carried on by the company wholly outside the State,

(b) a chargeable gain accruing on the disposal of currency or of a debt within section 541(6), where the currency or debt is or represents money in use for the purposes of a trade carried on by the company wholly outside the State, or

(c) a chargeable gain in respect of which the company is chargeable to capital gains tax by virtue of section 29 or to corporation tax by virtue of section 25(2)(b).

(8) Where—

(a) any amount of capital gains tax is paid by a person in pursuance of subsection (4), and

(b) an amount in respect of the chargeable gain is distributed, whether by way of dividend or distribution of capital or on the dissolution of the company, within 2 years from the time when the chargeable gain accrued to the company,

that amount of tax, so far as neither reimbursed by the company nor applied as a deduction under subsection (9), shall be applied for reducing or extinguishing any liability of the person to income tax in respect of the distribution or (in the case of a distribution falling to be treated as a disposal on which a chargeable gain accrues to the person) to any capital gains tax in respect of the distribution.

(9) The amount of capital gains tax paid by a person in pursuance of subsection (4), so far as neither reimbursed by the company nor applied under subsection (8) for reducing any liability to tax, shall be allowable as a deduction in the computation under the Capital Gains Tax Acts of a gain accruing on the disposal by the person of any asset representing the person's interest as a participator in the company.

(10) In ascertaining for the purposes of subsection (8) the amount of income tax chargeable on any person for any year of assessment on or in respect of a distribution, any such distribution mentioned in that subsection which falls to be treated as income of that person for that year of assessment shall be regarded as forming the highest part of the income on which the person is charged to tax for the year of assessment.

(11) To the extent that it would reduce or extinguish chargeable gains accruing by virtue of this section to a person in a year of assessment, this section shall apply in relation to a loss accruing to the company on the disposal of an asset in that year of assessment as it would apply if a gain instead of a loss had accrued to the company on the disposal, but shall only apply in relation to that person; and, subject to the preceding provisions of this subsection, this section shall not apply in relation to a loss accruing to the company.

(12) Where the person who is a participator in the company at the time when the chargeable gain accrued to the company is itself a company which is not resident in the State but which would be a close company if it were resident in the State, an amount equal to the amount apportioned under subsection (5) out of the chargeable gain to the participating company's interest as a participator in the company to which the gain accrues shall be further apportioned among the participators in the participating company according to the extent of their respective interests as participators, and subsection (4) shall apply to them accordingly in relation to the amounts further apportioned, and so on through any number of companies.

(13) The persons treated by this section as if a part of a chargeable gain accruing to a company had accrued to them shall include trustees who are participators in the company, or in any company amongst the participators in which the gain is apportioned under subsection (12), if when the gain accrued to the company the trustees are neither resident nor ordinarily resident in the State.

(14) Where any tax payable by any person by virtue of subsection (4) is paid by the company to which the chargeable gain accrues, or in a case under subsection (12) is paid by any such other company, the amount so paid shall not, for the purposes of income tax, capital gains tax or corporation tax, be regarded as a payment to the person by whom the tax was originally payable.

(15) For the purposes of this section, the amount of the gain or loss accruing at any time to a company which is not resident in the State shall be computed (where it is not the case) as if the company were within the charge to corporation tax on capital gains.

(16) (a) In this subsection—

‘group’ shall be construed in accordance with subsections (1) (excluding paragraph (a)), (3) and (4) of section 616;

‘non-resident group’ of companies—

(i) in the case of a group none of the members of which is resident in the State, means that group, and

(ii) in the case of a group 2 or more members of which are not resident in the State, means the members not resident in the State.

(b) For the purposes of this section—

(i) sections 617 to 620 shall apply in relation to non-resident companies which are members of a non-resident group of companies as they apply in relation to companies resident in the State which are members of a group of companies, and

(ii) sections 623 and 625 shall apply as if for any reference in those sections to a group of companies there were substituted a reference to a non-resident group of companies, and as if references to companies were references to companies not resident in the State.”.

(2) This section shall apply as respects chargeable gains accruing to a company on or after the 11th day of February, 1999.

Amendment of Chaper 7 (other reliefs and exemptions) of Part 19 of Principal Act.

90. —(1) Part 19 of the Principal Act is hereby amended in Chapter 7—

(a) in section 613—

(i) in subsection (4)(a) by the substitution for “No chargeable gain” of “Subject to subsection (5), no chargeable gain”, and

(ii) by the insertion after subsection (4) of the following subsections:

“(5) Subsection (4)(a) shall not apply—

(a) to the disposal of an interest in settled property, other than such a disposal treated under subsection (4)(b) as made in consideration of obtaining the settled property, if at the time of the disposal the trustees are neither resident nor ordinarily resident in the State,

(b) if the settlement falls within subsection (6), or

(c) the property comprised in the settlement is or includes property that is derived directly or indirectly from a settlement falling within subsection (6).

(6) (a) In this subsection ‘arrangements’ means arrangements having the force of law by virtue of section 826 (as extended to capital gains tax by section 828).

(b) A settlement falls within this subsection if there has been a time when the trustees of the settlement—

(i) were neither resident nor ordinarily resident in the State, or

(ii) fell to be regarded for the purposes of any arrangements as resident in a territory outside the State.”,

and

(b) by the insertion after section 613 of the following section:

“Supplementary provisions.

613A.—(1) Subject to this section, subsection (2) shall apply where—

(a) section 579B applies as regards the trustees of a settlement,

(b) after the relevant time (within the meaning of that section) a person disposes of an interest created by or arising under the settlement and the circumstances are such that subsection (4)(a) of section 613 does not apply by virtue of subsection (5)(a) of that section, and

(c) the interest was created for the benefit of the person making the disposal or that person otherwise acquired it, before the relevant time.

(2) For the purposes of calculating any chargeable gain accruing on the disposal of the interest, the person disposing of it shall be treated as having—

(a) disposed of it immediately before the relevant time, and

(b) immediately reacquired it,

at its market value at that time.

(3) Subsection (2) shall not apply if section 579E applied as regards the trustees in circumstances where the time concerned (within the meaning of that section) fell before the time when the interest was created for the benefit of the person disposing of it or when the person otherwise acquired it.

(4) Subsection (6) applies where—

(a) section 579B applies as regards the trustees of a settlement,

(b) after the relevant time (within the meaning of that section) a person disposes of an interest created by or arising under the settlement and the circumstances are such that subsection (4)(a) of section 613 does not apply by virtue of subsection (5)(a) of that section,

(c) the interest was created for the person's benefit, or the person otherwise acquired it, before the relevant time, and

(d) section 579E applied as regards the trustees in circumstances where the time concerned (within the meaning of that section) fell in the relevant period.

(5) The relevant period is the period which—

(a) begins when the interest was created for the benefit of the person disposing of it or when the person otherwise acquired it, and

(b) ends with the relevant time.

(6) For the purposes of calculating any chargeable gain accruing on the disposal of the interest, the person disposing of it shall be treated as having—

(a) disposed of it immediately before the time determined in accordance with subsection (7), and

(b) immediately reacquired it,

at its market value at that time.

(7) The time mentioned in subsection (6) is—

(a) where there is only one such time, the time concerned, or

(b) where there is more than one time concerned, because section 579E applied more than once, the earliest time concerned.

(8) Where subsection (2) applies, subsection (6) shall not apply.”.

(2) This section shall apply as respects the disposal on or after the 11th day of February, 1999, of an interest created by or arising under a settlement.

Amendment of section 649A (relevant disposals: rate of charge) of Principal Act.

91. —(1) Section 649A of the Principal Act is hereby amended in subsection (2)—

(a) by the substitution of the following subparagraph for subparagraph (ii) of paragraph (b):

“(ii) being a disposal, at any time in the period beginning on the 10th day of March, 1999, and ending on the 5th day of April, 2002, of land—

(I) to—

(A) a housing authority (within the meaning of section 23 of the Housing (Miscellaneous Provisions) Act, 1992 ),

(B) the National Building Agency Limited (being the company referred to in section 1 of the National Building Agency Limited Act, 1963), or

(C) a body standing approved of for the purposes of section 6 of the Housing (Miscellaneous Provisions) Act, 1992 ,

which land is specified in a certificate in writing given by a housing authority or the National Building Agency Limited, as appropriate, as land being required for the purposes of the Housing Acts, 1966 to 1998,

(II) in respect of the whole of which, at the time at which the disposal is made, permission for residential development has been granted under section 26 of the Local Government (Planning and Development) Act, 1963 , and such permission has not ceased to exist, other than a disposal to which paragraph (c) applies, or

(III) in respect of the whole of which, at the time at which the disposal is made, is, in accordance with a development objective (as indicated in the development plan of the planning authority concerned), for use solely or primarily for residential purposes, other than a disposal to which paragraph (c) applies.”,

and

(b) by the insertion of the following paragraph after paragraph (b):

“(c) This paragraph applies to a relevant disposal being a disposal—

(i) by any person (‘the disponer’) to a person who is connected with the disponer, or

(ii) of land under a relevant contract in relation to the disposal.”.

(2) This section shall apply to a relevant disposal made on or after the 10th day of March, 1999.

Amendment of Chaper 5 (capital gains tax: returns, information, etc.) of Part 38 of Principal Act.

92. —(1) Part 38 of the Principal Act is hereby amended in Chapter 5—

(a) in section 917—

(i) by the substitution for “within section 579 or 590” of “within sections 579 to 579F and section 590”, and

(ii) by the substitution for “under section 579 or 590” of “under sections 579 to 579F or section 590”,

(b) by the insertion after section 917 of the following sections:

“Return of property transfers to non-resident trustees.

917A.—(1) In this section and in sections 917B and 917C ‘appropriate inspector’ shall be construed in accordance with section 950.

(2) This section applies where—

(a) on or after the 11th day of February, 1999, a person (in this section referred to as the ‘transferor’) transfers property to the trustees of a settlement otherwise than under a transaction entered into at arm's length,

(b) the trustees of the settlement are neither resident nor ordinarily resident in the State at the time the property is transferred, and

(c) the transferor knows or has reason to believe, that the trustees are not so resident and ordinarily resident.

(3) Where this section applies, the transferor shall, before the expiry of 3 months beginning with the day on which the transfer is made, deliver to the appropriate inspector a statement which—

(a) identifies the settlement, and

(b) specifies the property transferred, the day on which the transfer was made, and the consideration (if any) for the transfer.

(4) Where a transferor fails—

(a) to make a statement required to be made by the transferor in accordance with subsection (3), or

(b) to include in such a statement the details referred to in subsection (3),

the transferor shall in respect of each such failure be liable to a penalty of £2,000.

(5) Penalties under subsection (4) may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in like manner as in summary proceedings for the recovery of any fine or penalty under any act relating to the excise.”.

“Return by settlor in relation to non-resident trustees.

917B.—(1) In this section and in section 917C ‘arrangements’ means arrangements having the force of law by virtue of section 826 (as extended to capital gains tax by section 828);

(2) This section applies where a settlement is created on or after the 11th day of February, 1999, and at the time it is created—

(a) the trustees are neither resident nor ordinarily resident in the State, or

(b) the trustees are resident and ordinarily resident in the State but fall to be regarded for the purposes of any arrangements as resident in a territory outside the State.

(3) Where this section applies, any person who—

(a) is a settlor in relation to the settlement at the time it is created, and

(b) at that time fulfils the condition mentioned in subsection (4),

shall, before the expiry of the period of 3 months beginning with the day on which the settlement is created, deliver to the appropriate inspector a statement specifying—

(i) the day on which the settlement was created;

(ii) the name and address of the person making the statement; and

(iii) the names and addresses of the persons who are the trustees immediately before the delivery of the statement.

(4) The condition is that the person concerned is domiciled in the State and is either resident or ordinarily resident in the State.

(5) Where a person fails—

(a) to make a statement required to be made by the person in accordance with subsection (2), or

(b) to include in such a statement the details referred to in subsection (2), the person shall in respect of each such failure be liable to a penalty of £2,000.

(6) Penalties under subsection (5) may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in like manner as in summary proceedings for the recovery of any fine or penalty under any act relating to the excise.”.

“Return by certain trustees.

917C.—(1) This section applies where—

(a) the trustees of a settlement become at any time (in this section referred to as ‘the relevant time’) on or after the 11th day of February, 1999, neither resident nor ordinarily resident in the State, or

(b) the trustees of a settlement, while continuing to be resident and ordinarily resident in the State, become at any time (in this section also referred to as ‘the relevant time’) on or after the 11th day of February, 1999, trustees who fall to be regarded for the purposes of any arrangements as resident in a territory outside the State.

(2) Where this section applies, any person who was a trustee of the settlement immediately before the relevant time shall, before the expiry of the period of 3 months beginning with the day when the relevant time falls, deliver to the appropriate inspector a statement specifying—

(a) the day on which the settlement was created,

(b) the name and address of each person who is a settlor in relation to the settlement immediately before the delivery of the statement, and

(c) the names and addresses of the persons who are the trustees immediately before the delivery of the statement.

(3) Where a person fails—

(a) to make a statement required to be made by the person in accordance with subsection (2), or

(b) to include in such a statement the details referred to in subsection (2), the person shall in respect of each such failure be liable to a penalty of £2,000.

(4) Penalties under subsection (3) may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in like manner as in summary proceedings for the recovery of any fine or penalty under any act relating to the excise.”.

(2) This section shall apply as on and from the 11th day of February, 1999.

Amendment of Schedule 15 (list of bodies for purposes of section 610) to Principal Act.

93. —Schedule 15 to the Principal Act is hereby amended in Part 1 by the insertion of the following paragraph after paragraph 32:

“33. National Rehabilitation Board.”.