PART 6

Capital Acquisitions Tax

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

216. —(1) Section 18 of the Principal Act is amended in subsection (5)(f) by the substitution of “section 6(1)(d) or 12(1)(c)” for “section 6(1)(c) or section 12(1)(b)”.

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

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

217. —(1) Section 19 of the Principal Act is amended by the substitution in subparagraph (ii) of subsection (5)(a) of “or within 4 years of the compulsory acquisition” for “or compulsory acquisition”.

(2) Subsection (1) shall have effect in relation to compulsory acquisitions made on or after 6 December 2000.

218. —(1) Section 55 of the Principal Act is amended by the insertion of the following subsection after subsection (4):

“(5) Any work of art normally kept outside the State which is comprised in an inheritance which is charged to tax by virtue of section 12(1)(c) shall be exempt from tax to the extent that the Comtaken into account in computing tax, to the extent that the Commissioners are satisfied that it was brought into the State solely for public exhibition, cleaning or restoration.”.

(2) This section shall have effect in relation to inheritances taken on or after 26 January 2001.

219. —(1) Section 57 of the Principal Act is amended by the substitution in subsection (2) of the following for paragraph (a):

(a) the securities or units were comprised in the disposition continuously for a period of six years immediately before the date of the gift or the date of the inheritance, and any period immediately before the date of the disposition during which the securities or units were continuously in the beneficial ownership of the disponer shall be deemed, for the purpose of this paragraph, to be a period or part of a period immediately before the date of the gift or the date of the inheritance during which they were continuously comprised in the disposition;”.

(2) This section shall have effect in relation to securities or units comprised in a gift or an inheritance where the date of the gift or the date of the inheritance is on or after 15 February 2001 and the securities or units—

(a) come into the beneficial ownership of the disponer on or after 15 February 2001, or

(b) become subject to the disposition on or after that date without having been previously in the beneficial ownership of the disponer.

220. —(1) Section 59C of the Principal Act is amended by the insertion of the following after subsection (1):

“(1A) In this section any reference to a donee or successor shall be construed as including a reference to the transferee referred to in section 23(1).”.

(2) This section shall have effect in relation to a gift or inheritance taken on or after 1 December 1999.

221. —The Principal Act is amended by the insertion of the following section after section 59C:

“59D.—(1) In this section—

‘the appropriate period’ means periods which together comprised at least 5 years falling within the 18 years immediately following the birth of the donee or successor.

(2) Where, on a claim being made to them in that behalf in relation to a gift or inheritance taken on or after 6 December 2000, the Commissioners are, subject to subsection (3), satisfied—

(a) where the inheritance is taken by a successor on the date of death of the disponer, that the successor had, prior to the date of the inheritance, been placed in the foster care of the disponer under the Child Care (Placement of Children in Foster Care) Regulations, 1995 (S.I. No. 260 of 1995), or the Child Care (Placement of Children with Relatives) Regulations, 1995 (S.I. No. 261 of 1995), or

(b) that throughout the appropriate period the donee or successor—

(i) has resided with the disponer, and

(ii) was under the care of and maintained by the disponer at the disponer's own expense,

then, subject to subsection (3), for the purpose of computing the tax payable on that gift or inheritance, that donee or successor shall be deemed to bear to that disponer the relationship of a child.

(3) Relief under subsection (2) shall not apply where the claim for such relief is based on the uncorroborated testimony of one witness.”.

222. —The Principal Act is amended by the insertion of the following section after section 59D (inserted by the Finance Act, 2001):

“59E.—Where, on a claim being made to them in that behalf in relation to a gift or inheritance taken on or after the date of the passing of the Finance Act, 2001, the Commissioners are satisfied that—

(a) the donee or successor had at the date of the gift or the date of the inheritance been adopted in the manner referred to in paragraph (b) of the definition of ‘child’ contained in section 2(1), and

(b) the disponer is the natural mother or the natural father of the donee or successor,

then, notwithstanding section 2(5)(a), for the purpose of computing the tax payable on that gift or inheritance, that donee or successor shall be deemed to bear to that disponer the relationship of a child.”.

223. —Section 61 of the Principal Act is amended in subsection (1)—

(a) as respects persons dying on or after 26 January 2001 and prior to 1 January 2002, by the substitution of “£25,000” for “£5,000”, and

(b) as respects persons dying on or after 1 January 2002, by the substitution of “€31,750” for “£5,000”.

224. —(1) Section 85 of the Finance Act, 1989 , is amended by the substitution of the following for subsections (1) and (2):

“(1) In this section—

‘investment undertaking’ has the meaning assigned to it by section 739B of the Taxes Consolidation Act, 1997 ;

‘specified collective investment undertaking’ has the meaning assigned to it by section 734 of the Taxes Consolidation Act, 1997 ;

‘unit’, in relation to an investment undertaking, has the meaning assigned to it by section 739B of the Taxes Consolidation Act, 1997 ;

‘unit’, in relation to a specified collective investment undertaking, has the meaning assigned to it by section 734 of the Taxes Consolidation Act, 1997 .

(2) Where any unit of an investment undertaking or of a specified collective investment undertaking is comprised in a gift or an inheritance, then such unit—

(a) shall be exempt from tax, and

(b) shall not be taken into account in computing tax on any gift or inheritance taken by the donee or successor,

if, but only if, it is shown to the satisfaction of the Commissioners that—

(i) the unit is comprised in the gift or inheritance—

(I) at the date of the gift or at the date of the inheritance, and

(II) at the valuation date,

(ii) at the date of the disposition, the disponer is neither domiciled nor ordinarily resident in the State, and

(iii) at the date of the gift or at the date of the inheritance, the donee or successor is neither domiciled nor ordinarily resident in the State.”.

(2) In relation to any unit of an investment undertaking comprised in a gift or an inheritance, section 85(2)(ii) (inserted by subsection (1)) of the Finance Act, 1989 , shall, notwithstanding that the disponer was domiciled or ordinarily resident in the State at the date of the disposition, be treated as satisfied where—

(a) the proper law of the disposition was not the law of the State at the date of the disposition, and

(b) the unit came into the beneficial ownership of the disponer or became subject to the disposition prior to 15 February 2001.

(3) This section shall have effect in relation to units of an investment undertaking comprised in a gift or an inheritance where the date of the gift or the date of the inheritance is on or after 1 April 2000.

(4) This section shall have effect in relation to units of a specified collective investment undertaking comprised in a gift or an inheritance where the date of the gift or the date of the inheritance is on or after 15 February 2001 and the units—

(a) come into the beneficial ownership of the disponer on or after 15 February 2001, or

(b) become subject to the disposition on or after that date without having been previously in the beneficial ownership of the disponer.

225. —(1) Chapter I (which relates to the taxation of assets passing on inheritance) of Part VI of the Finance Act, 1993 , is repealed.

(2) Sections 137, 138, 139 and 140 of the Finance Act, 1994 , section 143 of the Finance Act, 1997 , section 127 of the Finance Act, 1998 , and sections 147 and 150 of the Finance Act, 2000 , are repealed.

(3) Subsections (1) and (2) shall have effect in relation to probate tax which would but for this section first become due and payable on or after 6 December 2000.

226. —(1) Section 133 of the Finance Act, 1993 , is amended by the substitution in subsection (2)(b) of the following for subparagraph (ii):

“(ii) at the date of the disposition, the disponer is neither domiciled nor ordinarily resident in the State;”.

(2) This section shall have effect in relation to a policy comprised in a gift or an inheritance where the date of the gift or the date of the inheritance is on or after 15 February 2001 and the policy—

(a) comes into the beneficial ownership of the disponer on or after 15 February 2001, or

(b) becomes subject to the disposition on or after that date without having been previously in the beneficial ownership of the disponer.

227. —(1) Section 124 of the Finance Act, 1994 , is amended by the insertion of the following after subsection (3):

“(4) In this Chapter any reference to a donee or successor shall be construed as including a reference to the transferee referred to in section 23 (1) of the Principal Act.”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after 11 April 1994.

228. —(1) Section 127 of the Finance Act, 1994 , is amended—

(a) by the substitution of “whether incorporated in the State or otherwise” for “incorporated in the State” in each place where it occurs,

(b) by the deletion of “in so far as situated in the State,” in paragraph (e) of subsection (1), and

(c) by the deletion of subsection (3).

(2) This section shall have effect in relation to gifts or inheritances taken on or after 15 February 2001.

229. —(1) Section 143 of the Finance Act, 1994 , is amended—

(a) in subsection (1)—

(i) by the insertion of the following definition after the definition of “relevant inheritance”:

“‘settled relevant inheritance’ means a relevant inheritance taken on the death of a life tenant;”,

(ii) by the substitution of the following definition for the definition of “the relevant period”:

“‘relevant period’ means—

(a) in relation to an earlier relevant inheritance, the period of 5 years commencing on the date of death of the disponer,

(b) in relation to a settled relevant inheritance, the period of 5 years commencing on the date of death of the life tenant concerned, and

(c) in relation to a later relevant inheritance, the period of 5 years commencing on the latest date on which a later relevant inheritance was deemed to be taken from the disponer;”,

and

(b) in subsection (2) by the substitution of the following for the proviso to subsection (2):

“Provided that where in the case of each and every earlier relevant inheritance, each and every settled relevant inheritance or each and every later relevant inheritance, as the case may be, taken from one and the same disponer, one or more objects of the appropriate trust became beneficially entitled in possession before the expiration of the relevant period to an absolute interest in the entire of the property of which that inheritance consisted on and at all times after the date of that inheritance (other than property which ceased to be subject to the terms of the appropriate trust by virtue of a sale or exchange of an absolute interest in that property for full consideration in money or money's worth), then, in relation to all such earlier relevant inheritances, all such settled relevant inheritances or all such later relevant inheritances, as the case may be, this section shall cease to apply and tax shall be computed accordingly in accordance with the provisions of the said section 109 as if this section had not been enacted.”.

(2) This section shall have effect as respects relevant inheritances taken on or after 26 January 2001.