Revenue Note for Guidance

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Revenue Note for Guidance

17 Exemptions


This section exempts from the charge for discretionary trust tax under section 15 trusts which are set up exclusively for charitable purposes in the State or Northern Ireland, for the purposes of a superannuation or unit trust scheme, for the benefit of improvident or incapacitated individuals or for the upkeep of heritage houses or gardens.


A discretionary trust tax charge will not arise in relation to trusts which have been set up exclusively for certain purposes. The following trusts are exempt from discretionary trust tax:

  • (1)(a) discretionary trusts set up exclusively for purposes which, in accordance with the law of the State, are public or charitable. Prior to the passing of the 2014 Finance Act only discretionary trusts created exclusively for public or charitable purposes in the State or Northern Ireland qualified for exemption from discretionary trust tax. The Finance Act 2014 removed the territorial limit of “the State or Northern Ireland” for discretionary trusts created on or after the passing of the Act. In effect the exemption now applies wherever the public or charitable purpose is based.
  • (1)(b) trusts set up in connection with superannuation schemes. The funds of these schemes are normally held by trustees to meet claims as and when they arise, and are often held on trusts which give powers to the trustees sufficiently wide to be classed as discretionary;
  • (1)(c) unit trust schemes within the meaning of the Unit Trusts Act 1990. Again, the trustees might have powers, in connection with the funds of a unit trust scheme, which might be classed as discretionary, giving rise to a discretionary trust tax claim;
  • (1)(d) discretionary trusts for the benefit of one or more named individuals who are, because of age or improvidence, or of physical, mental or legal incapacity incapable of managing his/her/their affairs;
  • (1)(e) discretionary trusts set up exclusively for the upkeep of houses and gardens referred to in section 77(6), i.e. houses and gardens situated in the State and not held for the purposes of trading which—
    • are of national, scientific, historic or artistic interest, and
    • are open to the public.

(2) Discretionary trust tax is not chargeable—

  • where property is taken by the State when the trust terminates, or
  • where notional sums representing the benefit of interest-free loans etc. are deemed to be taken by a discretionary trust under the provisions of section 40.

Relevant Date: Finance Act 2015