Revenue Note for Guidance

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Revenue Note for Guidance

21 Application of this Act

Summary

Certain provisions of the Act, which apply to inheritances generally, are restricted or amended to allow for the fact that the successor in question is a notional successor.

Details

Where a charge to discretionary trust tax arises under section 20, all the provisions of the Act apply to such a charge except for those set out below.

(a) A reference in section 27 to a company controlled by the successor and the definition of “group of shares” in that section is construed as if the list of persons contained in subsection (3) of that section included the following:

  • the trustees of the discretionary trust,
  • the living objects of the discretionary trust,
  • the relatives (see note on section 2(4)) of those objects,
  • nominees of those trustees or of the relatives of those objects, and
  • the trustees of a settlement whose objects include the living objects of the discretionary trust or relatives of those living objects.

(b) The valuation date in respect of the 1% levy is the same as the chargeable date, i.e. 5 April and 31 December in the year 2006 and 31 December in the year 2007 and subsequent years. If 1% annual charges have arisen before the valuation date for the initial 6% charge has arisen, then the valuation date for those accrued annual 1% charges is the same as the valuation date for the initial 6% charge.

(c) Since there is no actual successor, as such, the trustees are the persons primarily accountable for the payment of the tax.

(d) Any object of the trust who has received a benefit from the trust subsequent to the date of the charge is also accountable for the payment of the tax.

(e) [This provision has been deleted by section 117 of the Finance Act 2006.]

(f) Certain provisions of the Act do not apply in relation to the 1% charge to discretionary trust tax imposed by section 20.

Section 30 of the Act is replaced by paragraph (b) of this section. Section 45(1), which specifies the persons who are primarily accountable for payment of capital acquisitions tax, is replaced by paragraph (c) of this section.

Section 50 deals with the computation of mainstream capital acquisitions tax. Section 81 grants exemption in respect of Government securities when in the beneficial ownership of a person who is neither resident nor ordinarily resident in the State. Schedule 2, which deals with the computation of tax, is replaced by section 23.

Relevant Date: Finance Act 2015