803 Special provisions as to certain interests

Summary

This section provides for the following situations —

• where a beneficiary with an absolute interest in the residue of an estate dies before the administration of that estate is completed,
• where successive beneficiaries succeed to the interest in the residue before the administration of the estate is finalised, and
• where a person with a discretionary interest in the residue receives a payment from the residue.

Details

(1) If a beneficiary with an interest in the residue of an estate dies before the administration of the estate is finalised, that interest in the residue forms part of his/her own estate. His/her personal representatives are, accordingly, treated as being entitled to the residuary income from that estate.

(2) Where during the course of administration of an estate, successive beneficiaries become entitled to the absolute interest in the residue (that is, the first beneficiary may die while the estate is still being administered), any payments made from the residue are treated as payments on account to the first beneficiary, net of standard rate tax in the case of an Irish estate. The next person to succeed to the residue is treated for tax purposes in the same manner in respect of any payments from the residue.

(3) Any payment made to a person with a discretionary interest in the residue during the course of the administration period is treated as income of that person for the tax year in which it was paid.

Relevant Date: Finance Act 2021