579B Trustees ceasing to be resident in the State

Summary

This section imposes a charge to capital gains tax where a “resident” trust becomes “non-resident”.

Details

(1) Definitions are provided for “arrangements”, “the new assets” and “the old assets”; “arrangements” are double taxation relief treaties between the State and other jurisdictions.

(2) & (3) Where at any time (the relevant time), on or after 11 February, 1999, trustees of a settlement become neither resident nor ordinarily resident in the State, they are deemed for capital gains tax purposes to have disposed of “the defined assets” immediately before the relevant time and to have reacquired them, at their market value at that time.

(4), (5) & (6) The defined assets are all assets constituting settled property of the settlement immediately before the relevant time. However, if immediately after the relevant time, the trustees carry on a trade in the State through a branch or agency and 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, those assets are not defined assets. Furthermore, assets are not defined assets if they are of a description specified in any double taxation relief treaties, and should the trustees dispose of them immediately before the relevant time, the trustees would fall to be regarded for the purposes of the treaties as not liable in the State to tax on gains accruing to them on the disposal.

(7) & (8) Roll-over relief, provided by section 597 does not apply where old assets are disposed of before the relevant time and are replaced by new assets acquired after that time. Furthermore, a chargeable gain which has been deferred under that section comes into charge immediately before the relevant time unless the new assets are situated in the State and either used in or for the purposes of a trade or used or held for the purposes of a branch or agency in the State.

(9) The trustees have the option of paying capital gains tax in 6 equal annual instalments. The first such instalment is due and payable on 31 October in the year following the year in which the deemed disposal occurred. The remaining instalments are due and payable on 31 October in each of the years following the year in which the first instalment became due and payable.

Relevant Date: Finance Act 2021