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Capital Acquisitions Tax Consolidation Act 2003 (Number 1 of 2003)

11 Taxable inheritance.

[CATA 1976 s12 (part)]

(1) In relation to an inheritance taken under a disposition, where the date of the disposition is before 1 December 1999, “taxable inheritance” in this Act means—

(a) in the case where the disponer is domiciled in the State at the date of the disposition under which the successor takes the inheritance, the whole of the inheritance, and

(b) in any case, other than the case referred to in paragraph (a), where, at the date of the inheritance—

(i) the whole of the property—

(I) which was to be appropriated to the inheritance, or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, the whole of the inheritance;

(ii) a part or proportion of the property—

(I) which was to be appropriated to the inheritance, or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, that part or proportion of the inheritance.

(2) In relation to an inheritance taken under a disposition, where the date of the disposition is on or after 1 December 1999, “taxable inheritance” in the Act means—

(a) in the case where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the successor takes the inheritance, the whole of the inheritance,

(b) in the case where the successor (not being a successor in relation to a charge for tax arising by virtue of sections 15(1) and 20(1)) is resident or ordinarily resident in the State at the date of the inheritance, the whole of the inheritance, and

(c) in any case, other than a case referred to in paragraph (a) or (b), where at the date of the inheritance—

(i) the whole of the property—

(I) which was to be appropriated to the inheritance, or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, the whole of the inheritance;

(ii) a part or proportion of the property—

(I) which was to be appropriated to the inheritance, or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, that part or proportion of the inheritance.

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(2A)(a) For the purposes of subsections (1)(b) and (2)(c), any property comprising shares in—

(i) a company formed and registered under the Companies Act 2014 or an existing company within the meaning of that Act,

(ii) a body corporate referred to in subsection (1) of section 1312 of the Companies Act 2014 (other than a body that is referred to in subsection (2) of that section as an ‘excluded body’),

(iii) an Irish collective asset-management vehicle, or

(iv) a society registered under the Industrial and Provident Societies Acts 1893 to 2014,

shall be deemed to be situate in the State.

(b) In this subsection ‘shares’ includes any legal or equitable interest or right in, or in relation to, a share, whether such interest or right is directly or indirectly held, and, without prejudice to the generality of the foregoing, shall be deemed to include—

(i) a share which represents ownership of an underlying share and which can be traded independently of the underlying share, and

(ii) in the case of shares held by a central securities depository (within the meaning of Regulation 909/2014 of the European Parliament and of the Council of 23 July 20141) whose rules require holders of interests in such shares to hold those interests by way of a co-ownership interest in a fungible pool of underlying shares, that co-ownership interest.

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(3) For the purposes of subsections (1)(b) and (2)(c)

(a) “property which was to be appropriated to the inheritance” and “property out of which property was to be appropriated to the inheritance” shall not include any property which was not applicable to satisfy the inheritance, and

(b) a right to the proceeds of sale of property is deemed to be situate in the State to the extent that such property is unsold and situate in the State.

(4) For the purposes of subsection (2), a person who is not domiciled in the State on a particular date is treated as not resident and not ordinarily resident in the State on that date unless—

(a) that date occurs on or after 1 December 2004,

(b) that person has been resident in the State for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls, and

(c) that person is either resident or ordinarily resident in the State on that date.

(5) (a) In this subsection—

company” and “share” have the same meaning as they have in section 27 ;

company controlled by the donee” has the same meaning as is assigned to “company controlled by the donee or successor” by section 27.

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(b) For the purposes of subsection (2)(c), a proportion of the market value of any share in a private company incorporated outside the State which (after the taking of the inheritance) is a company controlled by the successor is deemed to be a sum situate in the State and is the amount determined by the following formula—

B

A ×

C

where

A is the market value of that share at the date of the inheritance ascertained under section 27,

B is the market value of all property in the beneficial ownership of that company which is situate in the State at the date of the inheritance, and

C is the total market value of all property in the beneficial ownership of that company at the date of the inheritance.

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(b) For the purposes of subsection (2)(c), so much of the market value of any share in a private company incorporated outside the State (which after taking the inheritance is a company controlled by the successor) as is attributable, directly or indirectly, to property situate in the State at the date of the inheritance shall be deemed to be a sum situate in the State.

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(c) Paragraph (b) shall not apply in a case where the disponer was not domiciled in the State at the date of the disposition under which the successor takes the inheritance or where the share in question is actually situate in the State at the date of the inheritance.

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Footnotes

1 OJ No. L257, 28.8.2014, p.1

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Substituted by FA06 s114(1). This section shall apply to inheritances taken on or after 2 February 2006.

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Inserted by FA20 s62(4)(b). Comes into operation on 15 March 2021 as per S.I. No. 108 of 2021.