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3 2000

FINANCE ACT, 2000

PART 6

Capital Acquisitions Tax

Interpretation

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

Amendment of section 2 (interpretation) of Principal Act.

137. —(1) Section 2 of the Principal Act is amended by the insertion after subsection (5) of the following subsection:

“(5A) For the purposes of this Act—

(a) a reference to a person being resident in the State on a particular date shall be construed as a reference to that person being resident in the State in the year of assessment in which that date falls (but, for those purposes, the provisions of Part 34 of the Taxes Consolidation Act, 1997 , relating to residence of individuals shall not be construed as requiring a year of assessment to have elapsed before a determination of whether or not a person is resident in the State on a date falling in that year may be made), and

(b) a reference to a person being ordinarily resident in the State on a particular date shall be construed as a reference to that person being ordinarily resident in the State in the year of assessment in which that date falls.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 1 December 1999.

Amendment of section 6 (taxable gift) of Principal Act.

138. —(1) Section 6 of the Principal Act is amended by—

(a) the substitution of the following subsection for subsection (1):

“(1) In this Act ‘taxable gift’ means—

(a) in the case of a gift, other than a gift taken under a discretionary trust, where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the donee takes the gift, the whole of the gift;

(b) in the case of a gift taken under a discretionary trust where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the donee takes the gift or at the date of the gift or was (in the case of a gift taken after the death of the disponer) so resident or ordinarily resident at the date of that death, the whole of the gift;

(c) in the case where the donee is resident or ordinarily resident in the State at the date of the gift, the whole of the gift; and

(d) in any other case, so much of the property of which the gift consists as is situate in the State at the date of the gift.”,

(b) the substitution of the following subsections for subsection (3):

“(3) For the purposes of subsection (1), a person who is not domiciled in the State on a particular date shall be treated as not resident and not ordinarily resident in the State on that date unless—

(a) that date occurs on or after 1 December 2004,

(b) that person has been resident in the State for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls, and

(c) that person is either resident or ordinarily resident in the State on that date.

(4) (a) In this subsection—

‘company’ means a private company within the meaning assigned to it by section 16(2);

‘company controlled by the donee’ has the same meaning as is assigned to ‘company controlled by the donee or successor’ by section 16(3);

‘share’ has the meaning assigned to it by section 16(2).

(b) For the purposes of subsection (1)(d), a proportion of the market value of any share in a private company incorporated outside the State which (after the taking of the gift) is a company controlled by the donee shall be deemed to be a sum situate in the State and shall be the amount determined by the following formula—

A x

B

C

where—

A is the market value of that share at the date of the gift ascertained under section 16,

B is the market value of all property in the beneficial ownership of that company which is situate in the State at the date of the gift, and

C is the total market value of all property in the beneficial ownership of that company at the date of the gift.

(c) Paragraph (b) shall not apply in a case where the disponer was domiciled outside the State at all times up to and including the date of the gift or, in the case of a gift taken after the death of the disponer, up to and including the date of that death or where the share in question is actually situate in the State at the date of the gift.”.

(2) Subject to subsection (3), this section shall have effect in relation to gifts taken on or after 1 December 1999.

(3) Notwithstanding subsection (2), this section shall not have effect in relation to a gift taken under a disposition where the date of the disposition is before 1 December 1999.

Amendment of section 12 (taxable inheritance) of Principal Act.

139. —(1) Section 12 of the Principal Act is amended by—

(a) the substitution of the following subsection for subsection (1):

“(1) In this Act, ‘taxable inheritance’ means—

(a) in the case where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the successor takes the inheritance, the whole of the inheritance;

(b) in the case where the successor (not being a successor in relation to a charge for tax arising by virtue of section 106 of the Finance Act, 1984 , section 103 of the Finance Act, 1986 , or section 110 of the Finance Act, 1993 ) is resident or ordinarily resident in the State at the date of the inheritance, the whole of the inheritance; and

(c) in any case, other than a case referred to in paragraph (a) or (b), where at the date of the inheritance—

(i) the whole of the property—

(I) which was to be appropriated to the inheritance; or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, the whole of the inheritance;

(ii) a part or proportion of the property—

(I) which was to be appropriated to the inheritance; or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, that part or proportion of the inheritance.”,

(b) in subsection (2), by the substitution of “subsection (1)(c)” for “subsection (1)(b)”,

(c) the insertion of the following subsections after subsection (2):

“(3) For the purposes of subsection (1), a person who is not domiciled in the State on a particular date shall be treated as not resident and not ordinarily resident in the State on that date unless—

(a) that date occurs on or after 1 December 2004,

(b) that person has been resident in the State for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls, and

(c) that person is either resident or ordinarily resident in the State on that date.

(4) (a) In this subsection—

‘company’ means a private company within the meaning of section 16(2);

‘company’ controlled by the successor’ has the same meaning as is assigned to ‘company controlled by the donee or successor’ by section 16(3);

‘share’ has the meaning assigned to it by section 16(2).

(b) For the purposes of subsection (1)(b), a proportion of the market value of any share in a private company incorporated outside the State which (after the taking of the inheritance) is a company controlled by the successor shall be deemed to be a sum situate in the State and shall be the amount determined by the following formula—

A x

B

C

where—

A is the market value of that share at the date of the inheritance ascertained under section 16,

B is the market value of all property in the beneficial ownership of that company which is situate in the State at the date of the inheritance, and

C is the total market value of all property in the beneficial ownership of that company at the date of the inheritance.

(c) Paragraph (b) shall not apply in a case where the disponer was not domiciled in the State at the date of the disposition under which the successor takes the inheritance or where the share in question is actually situate in the State at the date of the inheritance.”.

(2) Subject to subsection (3), this section shall have effect in relation to inheritances taken on or after 1 December 1999.

(3) Notwithstanding subsection (2), this section shall not have effect in relation to an inheritance taken under a disposition where the date of the disposition is before 1 December 1999.

Amendment of section 19 (value of agricultural property) of Principal Act.

140. —(1) Section 19 of the Principal Act is amended—

(a) by the substitution of the following definition for the definition of “farmer” in subsection (1):

“‘farmer’, in relation to a donee or successor, means an individual who is domiciled in the State and in respect of whom not less than 80 per cent of the market value of the property to which the individual is beneficially entitled in possession is represented by the market value of property

in the State which consists of agricultural property, and, for the purposes of this definition—

(a) no deduction shall be made from the market value of property for any debts or encumbrances, and

(b) an individual shall be deemed to be beneficially entitled in possession to—

(i) an interest in expectancy, notwithstanding the definition of ‘entitled in possession’ in section 2, and

(ii) property which is subject to a discretionary trust under or in consequence of a disposition made by the individual where the individual is an object of the trust.”,

(b) in subsection (5), by the substitution of the following paragraph for paragraph (a):

“(a) The agricultural value shall cease to be applicable to agricultural property, other than crops, trees or underwood, if and to the extent that such property, or any agricultural property which directly or indirectly replaces such property—

(i) is sold or compulsorily acquired within the period of 6 years after the date of the gift or the date of the inheritance; and

(ii) is not replaced, within a year of the sale or compulsory acquisition, by other agricultural property,

and tax shall be chargeable in respect of the gift or inheritance as if the property were not agricultural property:

Provided that this paragraph shall not have effect where the donee or successor dies before the property is sold or compulsorily acquired.”.

(2) Paragraph (a) of subsection (1) shall have effect in relation to gifts or inheritances taken on or after 10 February 2000, and paragraph (b) of subsection (1) shall have effect where the sale or compulsory acquisition which causes the agricultural value to cease to be applicable occurs on or after 10 February 2000.

Amendment of section 36 (delivery of returns) of Principal Act.

141. —(1) Section 36 of the Principal Act is amended—

(a) by the substitution of the following subsection for subsection (4):

“(4) Subsection (2) applies to a charge for tax arising by reason of the provisions of section 106 of the Finance Act, 1984 , and to any other gift where—

(a) the aggregate of the taxable values of all taxable gifts taken by the donee on or after 2 December 1988, which have the same group threshold (as defined in the Second Schedule) as that other gift, exceeds an amount which is 80 per cent of the threshold amount (as defined in the Second Schedule) which applies in the computation of tax on that aggregate; or

(b) 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 for the purposes of this subsection, a reference to a gift includes a reference to a part of a gift or to a part of a taxable gift, as the case may be.”,

(b) by the substitution of the following paragraph for paragraph (a) of subsection (14):

“(a) the taxable value of the taxable gift exceeds an amount which is 80 per cent of the group 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.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 1 December 1999.

Amendment of section 48 (receipts and certificates) of Principal Act.

142. —Section 48 of the Principal Act is amended by—

(a) the substitution of the following subsections for subsections (3), (4) and (5):

“(3) The Commissioners shall, on application to them by a person who is an accountable person in respect of any of the property of which a taxable gift or taxable inheritance consists, if they are satisfied that the tax charged on the property in respect of the taxable gift or taxable inheritance has been or will be paid, or that there is no tax so charged, give a certificate to the person, in such form as they think fit, to that effect.

(3A) Where a person who is an accountable person in respect of the property of which a taxable gift or taxable inheritance consists has—

(a) delivered to the Commissioners, a full and true return of all the property comprised in the gift or inheritance on the valuation date and such particulars as may be relevant to the assessment of tax in respect of the gift or inheritance,

(b) made on that return an assessment of such amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid, and

(c) duly paid the amount of such tax (if any),

the Commissioners may give a certificate to the person, in such form as they think fit, to the effect that the tax charged on the property in respect of the taxable gift or taxable inheritance has been paid or that there is no tax so charged.

(4) A certificate referred to in subsection (3) or (3A) shall discharge the property from liability for tax (if any) in respect of the gift or inheritance, to the extent specified in the certificate, but shall not discharge the property from tax in case of fraud or failure to disclose material facts and, in any case, shall not affect the tax payable in respect of any other property or the extent to which tax is recoverable from any accountable person or from the personal representatives of any accountable person:

Provided that a certificate purporting to be a discharge of the whole tax payable in respect of any property included in the certificate in respect of a gift or inheritance shall exonerate from liability for such tax a bona fide purchaser or mortgagee for full consideration in money or money's worth without notice of such fraud or failure and a person deriving title from or under such a purchaser or mortgagee.

(5) Subject to the provisions of subsection (6), where tax is chargeable on the taxable value of a taxable gift or taxable inheritance and—

(a) application is made to the Commissioners by any person (in this section referred to as ‘the applicant’)—

(i) who is a person accountable, but not primarily accountable, for the payment of the whole or part of the tax, or

(ii) who is the personal representative of any person referred to in subparagraph (i),

and

(b) the applicant—

(i) delivers to the Commissioners a full and true return of all the property comprised in the gift or inheritance and such particulars as may be relevant to the assessment of tax in respect of the gift or inheritance, and

(ii) makes on that return an assessment of such amount of tax as, to the best of that person's knowledge, information and belief, ought to be charged, levied and paid,

the Commissioners may, upon payment of the tax assessed by the applicant, give a certificate to the applicant which shall discharge the applicant from any other claim for tax in respect of the gift or inheritance.”,

and

(b) the deletion of subsection (7).

Amendment of section 54 (provisions relating to charities, etc.) of Principal Act.

143. —(1) Section 54 of the Principal Act is amended by the substitution of the following subsection for subsection (1):

“(1) Where any person takes a benefit for public or charitable purposes that person shall be deemed—

(a) for the purposes of sections 5(1) and 11(1), to have taken that benefit beneficially, and

(b) for the purposes of the Second Schedule, to have taken a gift or an inheritance accordingly to which the group threshold of £15,000 applies.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 1 December 1999.

Amendment of section 55 (exemption of certain objects) of Principal Act.

144. —(1) Section 55 of the Principal Act is amended by the substitution of the following subsection for subsection (4):

“(4) The exemption referred to in subsection (2) shall cease to apply to an object, if at any time after the valuation date and—

(a) before the sale of the object,

(b) before the death of the donee or successor, and

(c) before such object again forms part of the property comprised in a gift or an inheritance (other than an inheritance arising by virtue of section 103 of the Finance Act, 1986 ) in respect of which gift or inheritance an absolute interest is taken by a person other than the spouse of that donee or successor,

there has been a breach of any condition specified in paragraph (b) or (c) of subsection (1).”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 10 February 2000.

Amendment of Second Schedule to Principal Act.

145. —(1) The Second Schedule to the Principal Act is amended—

(a) in Part I, by the substitution of the following paragraphs for paragraphs 1 to 7:

“1. In this Schedule—

‘group threshold’, in relation to a taxable gift or a taxable inheritance taken on a particular day, means—

(a) £300,000, where—

(i) the donee or successor is on that day the child, or minor child of a deceased child, of the disponer, or

(ii) the successor is on that day a parent of the disponer and—

(I) the interest taken is not a limited interest, and

(II) the inheritance is taken on the death of the disponer;

(b) £30,000, where the donee or successor is on that day, a lineal ancestor, a lineal descendant (other than a child, or a minor child of a deceased child), a brother, a sister, or a child of a brother or of a sister of the disponer;

(c) £15,000, where the donee or successor (who is not a spouse of the disponer) does not, on that day, stand to the disponer in a relationship referred to in subparagraph (a) or (b);

‘the consumer price index number’, in relation to a year, means the All Items Consumer Price Index Number for that year as compiled by the Central Statistics Office and expressed on the basis that the consumer price index number at mid-November 1996 is 100;

‘Table’ means the Table contained in Part II of this Schedule;

‘threshold amount’ in relation to the computation of tax on any aggregate of taxable values under paragraph 3, means the group threshold that applies in relation to all of the taxable gifts and taxable inheritances included in that aggregate but, in computing under this Schedule the tax chargeable on a taxable gift or taxable inheritance taken after 31 December 2000, that group threshold shall, for the purposes of this definition, be multiplied by the figure, rounded to the nearest third decimal place, determined by dividing by 104.8 the consumer price index number for the year immediately preceding the year in which that taxable gift or taxable inheritance is taken.

2. In the Table ‘Value’ means the appropriate aggregate referred to in paragraph 3.

3. The tax chargeable on the taxable value of a taxable gift or a taxable inheritance (hereafter in this Schedule referred to as the first-mentioned gift or inheritance) taken by a donee or successor shall be of an amount equal to the amount by which the tax computed on aggregate A exceeds the tax computed on aggregate B, where—

(a) aggregate A is the aggregate of the following:

(i) the taxable value of the first-mentioned gift or inheritance, and

(ii) the taxable value of each and every taxable gift and taxable inheritance taken previously by the said donee or successor on or after 2 December 1988, which has the same group threshold as the first-mentioned gift or inheritance,

(b) aggregate B is the aggregate of the taxable values of all such taxable gifts and taxable inheritances so previously taken which have the same group threshold as the first-mentioned gift or inheritance, and

(c) the tax on an aggregate is computed at the rate or rates of tax applicable under the Table to that aggregate:

Provided that—

(i) in a case where no such taxable gift or taxable inheritance was so previously taken, the amount of the tax computed on aggregate B shall be deemed to be nil, and

(ii) the amount of an aggregate that comprises only a single taxable value shall be equal to that value.

4. In the Table any rate of tax shown in the second column is that applicable to such portion of the value (within the meaning of paragraph 2) as is shown in the first column.

5. For the purposes of this Schedule, all gifts and inheritances which have the same group threshold and which are taken by a donee or successor on the same day shall count as one, and to ascertain the amount of tax payable on one such gift or inheritance of several so taken on the same day, the amount of tax computed under this Schedule as being payable on the total of such gifts and inheritances so taken on that day shall be apportioned rateably, according to the taxable values of the several taxable gifts and taxable inheritances so taken on that day.”,

(b) by the substitution of the following Part for Part II:

“PART II

TABLE

Portion of Value

Rate of tax

Per cent

The threshold amount

Nil

The balance

20

”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 1 December 1999.

Amendment of section 39 (extension of section 55 (exemption of certain objects) of Capital Acquisitions Tax Act, 1976) of Finance Act, 1978.

146. —(1) As respects the year 2001 and subsequent years, section 39 of the Finance Act, 1978 , is amended in subsection (1A)(b) by the insertion in subparagraph (i) after “September” of “of which not less than 10 of the days during that period shall fall on a Saturday or a Sunday or both”.

(2) This section shall apply to gifts and inheritances taken on or after 10 February 2000.

Amendment of section 109 (interpretation) of Finance Act, 1993.

147. —(1) Section 109 of the Finance Act, 1993 , is amended—

(a) by the substitution in the definition of “the consumer price index number” of “mid-November 1996” for “mid-November, 1989”, and

(b) by the substitution of the following definition for the definition of “relevant threshold”:

“‘relevant threshold’ means—

(a) £40,000, where the death of the deceased occurred on or before 31 December 2000, and

(b) in any other case, £40,000 multiplied by the figure, rounded up to the nearest third decimal place, determined by dividing by 104.8 the consumer price index number for the year immediately preceding the year in which the death of the deceased occurred;”.

(2) This section shall apply and have effect in relation to persons dying on or after 1 December 1999.

Amendment of Chapter 1 (business relief) of Part VI of Finance Act, 1994.

148. —(1) Part VI of the Finance Act, 1994 , is amended in Chapter 1—

(a) in section 134, by the substitution of the following subsections for subsections (1) and (2):

“(1) In determining for the purposes of this Chapter what part of the taxable value of a gift or inheritance is attributable to the value of relevant business property so much of the last-mentioned value as is attributable to—

(a) any excepted assets within the meaning of subsection (2), or

(b) any excluded property within the meaning of subsection (7),

shall be left out of account.

(2) An asset shall be an excepted asset in relation to any relevant business property if it was not used wholly or mainly for the purposes of the business concerned throughout the whole or the last two years of the relevant period, but where the business concerned is carried on by a company which is a member of a group, the use of an asset for the purposes of a business carried on by another company which at the time of the use and immediately prior to the gift or inheritance was also a member of that group shall be treated as use for the purposes of the business concerned, unless that other company's membership of the group falls to be disregarded under section 133:

Provided that the use of an asset for the purposes of a business to which section 127(4) relates shall not be treated as use for the purposes of the business concerned.”,

(b) in section 135—

(i) by the substitution of the following subsection for subsection (1):

“(1) In this section ‘relevant period’, in relation to relevant business property comprised in a gift or inheritance, means the period of 6 years commencing on the date of the gift or inheritance.”,

and

(ii) by the substitution of the following paragraph for paragraphs (ii) and (iii) of the proviso (inserted by the Finance Act, 1996 ) to subsection (2):

“(ii) this section shall not have effect where the donee or successor dies before the event which would otherwise cause the reduction to cease to be applicable.”,

and

(c) by the insertion of the following section after section 135:

“Avoidance of double relief.

135A.—Where the whole or part of the taxable value of any taxable gift or taxable inheritance is attributable to agricultural property to which subsection (2) of section 19 of the Principal Act applies, such whole or part of the taxable value shall not be reduced under this Chapter.”.

(2) Paragraphs (a) and (c) of subsection (1) shall have effect in relation to gifts or inheritances taken on or after 10 February 2000 and paragraph (b) of subsection (1) shall have effect where the event which causes the reduction to cease to be applicable occurs on or after 10 February 2000.

Amendment of section 142 (exemption of certain transfers from capital acquisitions tax following the dissolution of a marriage) of Finance Act, 1997.

149. —(1) Section 142 of the Finance Act, 1997 , is amended in subsection (2):

(a) by the deletion of “and” in paragraph (c),

(b) by the substitution in paragraph (d) of “1996, and” for “1996.”, and

(c) by the insertion of the following paragraph after paragraph (d):

“(e) to an order or other determination to like effect, which is analogous to an order referred to in paragraph (a), (b), (c) or (d), of a court under the law of another territory made under or in consequence of the dissolution of a marriage, being a dissolution that is entitled to be recognised as valid in the State.”.

(2) This section shall apply to an order or other determination to like effect where the order or the determination is made on or after 10 February 2000.

Amendment of section 143 (abatement and postponement of probate tax on certain property) of Finance Act, 1997.

150. —(1) Section 143 of the Finance Act, 1997 , is amended in subsection (1):

(a) by the deletion in subparagraph (i) of paragraph (a) of “or”,

(b) by the substitution in subparagraph (ii) of paragraph (a) of “1996, or” for “1996,”, and

(c) by the insertion of the following subparagraph after subparagraph (ii):

“(iii) to an order or other determination to like effect, which is analogous to an order referred to in subparagraph (i) or (ii), of a court under the law of another territory made under or in consequence of the dissolution of a marriage, being a dissolution that is entitled to be recognised as valid in the State,”.

(2) This section shall apply to an order or other determination to like effect where the order or the determination is made on or after 10 February 2000.

Exemption relating to certain dwellings.

151. —(1) The Principal Act is amended by the insertion of the following section after section 59B:

“59C.—(1) In this section—

‘dwelling-house’ means—

(a) a building or part (including an appropriate part within the meaning of subsection (5) of section 5) of a building which was used or was suitable for use as a dwelling, and

(b) the curtilage of the dwelling-house up to an area (exclusive of the site of the dwelling-house) of one acre but if the area of the curtilage (exclusive of the site of the dwelling-house) exceeds one acre then the part which comes within this definition is the part which, if the remainder were separately occupied, would be the most suitable for occupation and enjoyment with the dwelling-house;

‘relevant period’, in relation to a dwelling-house comprised in a gift or inheritance, means the period of 6 years commencing on the date of the gift or the date of the inheritance.

(2) Subject to subsections (3), (4), (5) and (6), a dwelling-house comprised in a gift or inheritance which is taken by a donee or successor who—

(a) has continuously occupied as his or her only or main residence—

(i) that dwelling-house throughout the period of 3 years immediately preceding the date of the gift or the date of the inheritance, or

(ii) where that dwelling-house has directly or indirectly replaced other property, that dwelling-house and that other property for periods which together comprised at least 3 years falling within the period of 4 years immediately preceding the date of the gift or the date of the inheritance,

(b) is not, at the date of the gift or at the date of the inheritance, beneficially entitled to any other dwelling-house or to any interest in any other dwelling-house, and

(c) continues to occupy that dwelling-house as his or her only or main residence throughout the relevant period,

shall be exempt from tax in relation to that gift or inheritance, and the value thereof shall not be taken into account in computing tax on any gift or inheritance taken by that person unless the exemption ceases to apply under subsection (5) or (6).

(3) The condition in paragraph (c) of subsection (2) shall not apply where the donee or successor has attained the age of 55 years at the date of the gift or at the date of the inheritance.

(4) For the purpose of paragraph (c) of subsection (2), the donee or successor shall be deemed to occupy the dwelling-house concerned as his or her only or main residence throughout any period of absence during which he or she worked in an employment or office all the duties of which were performed outside the State.

(5) If a dwelling-house exempted from tax by virtue of subsection (2) is sold or disposed of, either in whole or in part, within the relevant period, and before the death of the donee or successor (not being a donee or successor who had attained the age of 55 years at the date of the gift or inheritance), the exemption referred to in that subsection shall cease to apply to such dwelling-house unless the sale or disposal occurs in consequence of the donee or successor requiring long-term medical care in a hospital, nursing home or convalescent home.

(6) The exemption referred to in subsection (2) shall cease to apply to a dwelling-house, if at any time during the relevant period and—

(a) before the dwelling-house is sold or disposed of, and

(b) before the death of the donee or successor,

the condition specified in paragraph (c) of subsection (2) has not been complied with unless that non-compliance occurs in consequence of the donee or successor requiring long-term medical care in a hospital, nursing home or convalescent home, or in consequence of any condition imposed by the employer of the donee or successor requiring the donee or successor to reside elsewhere.

(7) Where a dwelling-house exempted from tax by virtue of subsection (2) (hereafter in this section referred to as the ‘first-mentioned dwelling-house’) is replaced within the relevant period by another dwelling-house, the condition specified in paragraph (c) of subsection (2) shall be treated as satisfied if the

donee or successor has occupied as his or her only or main residence the first-mentioned dwelling-house, that other dwelling-house and any dwelling-house which has within the relevant period directly or indirectly replaced that other dwelling-house for periods which together comprised at least 6 years falling within the period of 7 years commencing on the date of the gift or the date of the inheritance.

(8) Any period of absence which would satisfy the condition specified in paragraph (c) of subsection (2) in relation to the first-mentioned dwelling-house shall, if it occurs in relation to any dwelling-house which has directly or indirectly replaced that dwelling-house, likewise satisfy the said condition as it has effect by virtue of subsection (7).

(9) Subsection (5) shall not apply to a case falling within subsection (7), but the extent of the exemption under this section in such a case shall, where the donee or successor had not attained the age of 55 years at the date of the gift or at the date of the inheritance, not exceed what it would have been had the replacement of one dwelling-house by another referred to in subsection (7), or any one or more of such replacements, taken place immediately prior to that date.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 1 December 1999.

Amendment of section 58 (exemption of certain receipts) of Principal Act.

152. —(1) Section 58 of the Principal Act is amended by the insertion after subsection (3) of the following subsection:

“(4) The receipt by a minor child of the disponer of money or money's worth for support, maintenance or education, at a time when the disponer and the other parent of that minor child are dead, shall not be a gift or an inheritance where the provision of such support, maintenance or education—

(a) is such as would be part of the normal expenditure of a person in the circumstances of the disponer immediately prior to the death of the disponer; and

(b) is reasonable having regard to the financial circumstances of the disponer immediately prior to the death of the disponer.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the date of the passing of this Act.

Repeals etc.

153. —(1) Section 128 of the Finance Act, 1990 , and sections 116 and 117 of the Finance Act, 1991 , are repealed.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 1 December 1999.