5 Interpretation of Capital Gains Tax Acts

Summary

This section gives the meaning of certain terms and rules for the construction of certain references used in the Capital Gains Tax Acts. The various definitions and rules of construction apply unless the context requires otherwise.

Details

Definitions

(1) Certain of the terms mentioned in the section are, in fact, defined elsewhere in the Income Tax Acts, the Corporation Tax Acts or the Capital Gains Tax Acts and are listed in this section so as to give them general application throughout the Capital Gains Tax Acts. The provisions where these definitions are found are —

section 2 – appropriate inspector, body of persons, inspector and inspector of returns;

section 10 – settlement and settlor;

section 89 – trading stock;

section 208 – charity;

section 430 – close company;

section 432 – control;

section 534 – part disposal;

section 545 – chargeable gain;

section 546 – allowable loss;

section 548 – market value;

section 560 and paragraph 2 of Schedule 14 – wasting asset;

section 799 – personal representative;

section 850 – Appeal Commissioners;

Part 34 – resident and ordinarily resident.

In regard to the definition of “local authority”, it should be noted that, by virtue of section 3(2) of, and Schedule 2 to, the Local Government Act 2001, references in any other enactment to “local authority for the purposes of the Local Government Act, 1941”, and to similar or analogous expressions, are now to be construed as references to “a county council, city council and town council, and where the context so requires includes a joint body” within the meaning respectively assigned to each of those terms in the Local Government Act 2001.

“child of the civil partner” means a child of the civil partner of an individual who was born before the civil partnership was registered or during their civil partnership;

“civil partner” means a civil partner as defined in the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010;

“civil partnership” means ―

• a civil partnership registration referred to in section 3(a) of the 2010 Act (i.e. a civil partnership registration that has not been dissolved or the subject of a decree of nullity), or
• a legal relationship referred to in section 3(b) of the 2010 Act (i.e. a legal relationship of a class that is subject to an order recognising registered foreign relationships) that has not been dissolved or the subject of a decree of nullity.

“company” is defined in broad terms as any body corporate with the only exception being a European Economic Interest Grouping within the meaning of section 1014.

In relation to land, “lease” includes an underlease, sub-lease, tenancy or licence. The term also includes any agreement for a lease, underlease, sub-lease, tenancy or licence. Where the land is outside the State, the term is extended to cover any interest which corresponds to a lease as defined. Land includes any interest in land.

In relation to other property, “lease” means any kind of arrangement where payments are made for the use of, or in respect of, property.

“legatee” includes persons inheriting property, whether in their own right or as trustee —

• under a testamentary disposition (that is, a valid will),
• under an intestacy or partial intestacy (that is, where there is no valid will or where a valid will does not dispose of all of a person’s property),
• under the Succession Act, 1965 (for example, a spouse’s or child’s or a civil partner’s or a child of a civil partner’s legal right),
• by virtue of survivorship (that is, the survivor of a joint tenancy).

The term is also to be taken as including a person receiving a donatio mortis causa which is, broadly, a gift of personal property (it cannot be land, etc) by a person expecting to die which is to become effective only on the death of the person making the gift. A person receiving such a gift is treated as acquiring the asset at the time of the donor’s death.

A reference to a person acquiring an asset as legatee, property inherited under a valid will or on an intestacy or partial intestacy or by virtue of the Succession Act, 1965 includes any asset used by the personal representatives to pay any pecuniary legacy or other interest under such will or intestacy or by virtue of the Succession Act, 1965.

“shares” includes stock. Where shares or debentures exist in a letter of allotment or similar document they are to be treated as issued unless the right to the shares expressed in the letter remains provisional until accepted and there has been no acceptance.

“unit trust” is a trust which allows for the beneficiaries under the trust to participate in profits or income arising from investments to the extent that the beneficiaries hold the units into which the beneficial interests in the assets subject to the trusts are divided.

(1A) In the Income Tax Acts —

• references to a man, married man or husband is to be taken as references to a woman, married woman or a wife, as the case may be, and vice versa, and
• provisions relating to the tax treatment of a husband or wife are to be taken in such a way as to give effect to this section.

Construction

(2) References to a married woman living with her husband or a civil partner living with his or her civil partner are to be construed in accordance with the income tax rules for treating a wife as living with her husband as set out in section 1015(2) or section 1031A(2), as the case may be. For this purpose, the reference in section 1015(2) to a wife is to be treated as a reference to a married woman.

(3) Where, for the purpose of setting up a charge to capital gains tax, assets are treated as sold and immediately reacquired, it is not to be assumed that any expenditure was incurred on such sale or reacquisition.

Relevant Date: Finance Act 2021