This Act may be cited as the Capital Acquisitions Tax Consolidation Act 2003
2-
General interpretation.
[CATA 1976 s2]
(1)
In this Act, unless the context otherwise requires—
“absolute interest”, in relation to property, includes the interest of a person who has a general power of appointment over the property;
“accountable person” means a person who is accountable for the payment of tax by virtue of section 45 ;
“benefit” includes any estate, interest, income or right;
“child” includes—
(a)
a stepchild;
(b)
a child adopted—
(i)
under the Adoption Acts 1952 to 1998, or
(ii)
under a foreign adoption which by virtue of section 2, 3, 4 or 5 of the Adoption Act 1991 , is deemed to have been effected by a valid adoption order within the meaning of section 1 of that Act;
“Collector” means the Collector-General appointed under section 851 of the Taxes Consolidation Act 1997 ;
“Commissioners” means the Revenue Commissioners;
“date of the disposition” means—
(a)
in the case of a will, the date of the testator's death,
(b)
in the case of an intestacy or a partial intestacy, the date of death of the intestate,
(c)
in the case of a benefit under Part IX or section 56 of the Succession Act 1965 , the date of death of the relevant testator or other deceased person, and correspondingly in the case of an analogous benefit under the law of another territory,
(d)
in the case of a disposition which consists of the failure to exercise a right or a power, the date of the latest time when the disponer could have exercised the right or the power if that disponer were sui juris and not under any physical disability, and
(e)
in any other case, the date on which the act (or where more than one act is involved, the last act) of the disponer was done by which that disponer provided or bound that disponer to provide the property comprised in the disposition;
“date of the gift” means the date of the happening of the event on which the donee, or any person in right of the donee or on that donee's behalf, becomes beneficially entitled in possession to the benefit, and a reference to the time when a gift is taken is construed as a reference to the date of the gift;
“date of the inheritance” means—
(a)
in the case where the successor or any person in right of the successor or on that successor's behalf becomes entitled in possession to the benefit on the happening of any such event as is referred to in section 3 (2), the date of the event,
(b)
in the case of a gift which becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within 2 years prior to the death of the disponer, the date which would have been the date of the gift if the entitlement were a gift, and
(c)
in any other case, the date of the latest death which had to occur for the successor, or any person in right of the successor or on that successor's behalf, to become beneficially entitled in possession to the benefit,
and a reference to the time when an inheritance is taken is construed as a reference to the date of the inheritance;
“discretionary trust” means any trust whereby, or by virtue or in consequence of which—
(a)
property is held on trust to accumulate the income or part of the income of the property, or
(b)
property (other than property to which for the time being a person is beneficially entitled for an interest in possession) is held on trust to apply, or with a power to apply, the income or capital or part of the income or capital of the property for the benefit of any person or persons or of any one or more of a number or of a class of persons whether at the discretion of trustees or any other person and notwithstanding that there may be a power to accumulate all or any part of the income;
“disponer”, in relation to a disposition, means the person who, for the purpose of the disposition, directly or indirectly provided the property comprised in the disposition, and in any case where more than one person provided the property each is deemed to be the disponer to the extent that that disponer so provided the property; and for the purposes of this definition—
(a)
the testator is the disponer in the case of a disposition referred to in paragraph (k) of the definition of “disposition”,
(b)
the intestate is the disponer in the case of a disposition referred to in paragraph (l) of that definition,
(c)
the deceased person referred to in paragraph (m) of that definition is the disponer in the case of a disposition referred to in that paragraph, and
(d)
a person who has made with any other person a reciprocal arrangement by which that other person provided property comprised in the disposition is deemed to have provided that property;
“disposition” includes—
(a)
any act or omission by a person as a result of which the value of that person's estate immediately after the act or omission is less than it would be but for the act or omission,
(b)
any trust, covenant, agreement or arrangement, whether made by a single operation or by associated operations,
(c)
the creation of a debt or other right enforceable against the disponer personally or against any estate or interest that disponer may have in property,
(d)
the payment of money,
(e)
the allotment of shares in a company,
(f)
the grant or the creation of any benefit,
(g)
the grant or the creation of any lease, mortgage, charge, licence, option, power, partnership or joint tenancy or other estate or interest in or over any property,
(h)
the release, forfeiture, surrender or abandonment of any debt or benefit, or the failure to exercise a right, and, for the purpose of this paragraph, a debt or benefit is deemed to have been released when it has become unenforceable by action through lapse of time (except to the extent that it is recovered subsequent to its becoming so unenforceable),
(i)
the exercise of a general power of appointment in favour of any person other than the holder of the power,
(j)
a donatio mortis causa,
(k)
a will or other testamentary disposition,
(l)
an intestacy, whether total or partial,
(m)
the payment of a share as a legal right under Part IX of the Succession Act 1965 , to a deceased person's spouse, or the making of provision for a widow or child of a deceased person under section 56 or section 117 of the Succession Act 1965 , or an analogous share or provision paid or made on the death of a deceased person to or for the benefit of any person under the law of another territory, and
(n)
a resolution passed by a company which is deemed by subsection (3) to be a disposition;
“donee” means a person who takes a gift;
“entitled in possession” means having a present right to the enjoyment of property as opposed to having a future such right, and without prejudice to the generality of the foregoing a person is also, for the purposes of this Act, deemed to be entitled in possession to an interest or share in a partnership, joint tenancy or estate of a deceased person, in which that person is a partner, joint tenant or beneficiary, as the case may be, but that person is not deemed to be entitled in possession to an interest in expectancy until an event happens whereby this interest ceases to be an interest in expectancy;
“general power of appointment” includes every power, right, or authority whether exercisable only by will or otherwise which would enable the holder of such power, right, or authority to appoint or dispose of property to whoever the holder thinks fit or to obtain such power, right or authority, but exclusive of any power exercisable solely in a fiduciary capacity under a disposition not made by the holder, or exercisable by a tenant for life under the Settled Land Act 1882, or as mortgagee;
"gift” means a gift which a person is by this Act deemed to take;
“inheritance” means an inheritance which a person is by this Act deemed to take;
“interest in expectancy” includes an estate in remainder or reversion and every other future interest, whether vested or contingent, but does not include a reversion expectant on the determination of a lease;
“limited interest” means—
(a)
an interest (other than a leasehold interest) for the duration of a life or lives or for a period certain, or
(b)
any other interest which is not an absolute interest;
“local authority” has the meaning assigned to it by section 2(1) of the Local Government Act 2001 and includes a body established under the Local Government Services (Corporate Bodies) Act 1971 ;
“market value”, in relation to property, means the market value of that property ascertained in accordance with sections 26 and 27;
“minor child” means a child who has not attained the age of 18 years and is not and has not been married;
“personal property” means any property other than real property;
“personal representative” means the executor or administrator for the time being of a deceased person and includes—
(a)
any person who takes possession of or intermeddles with the property of a deceased person,
(b)
any person having, in relation to the deceased person, under the law of another country, any functions corresponding to the functions, for administration purposes under the law of the State, of an executor or administrator;
“property” includes rights and interests of any description;
“real property” means real and chattel real property;
“regulations” means regulations made under section 116 ;
“relative” means a relative within the meaning of subsection (4);
“return” means such a return as is referred to in section 46 ;
“share”, in relation to a company, includes any interest whatever in the company which is analogous to a share in the company, and “shareholder” shall be construed accordingly;
“special power of appointment” means a power of appointment which is not a general power of appointment;
“successor” means a person who takes an inheritance;
“tax” means any tax chargeable under this Act;
“valuation date” has the meaning assigned to it by section 30 ;
“year of assessment” has the meaning assigned to it by section 2 of the Taxes Consolidation Act 1997 .
(2)
For the purpose of the definition of “general power of appointment” contained in subsection (1), a person is deemed to have a general power of appointment—
(a)
notwithstanding that the person is not sui juris or is under a physical disability,
(b)
over money which the person has a general power to charge on property, and
(c)
over property of which the person is tenant in tail in possession.
(3)
For the purpose of the definition of “disposition” contained in subsection (1), the passing by a company of a resolution which, by the extinguishment or alteration of the rights attaching to any share of the company, results, directly or indirectly, in the estate of any shareholder of the company being increased in value at the expense of the estate of any other shareholder, is deemed to be a disposition made by that other shareholder if that other shareholder could have prevented the passing of the resolution by voting against it or otherwise; and in this subsection, “share” includes a debenture and loan stock and “shareholder” includes a debenture holder and a holder of loan stock.
(4)
For the purposes of this Act, the following persons and no other person are relatives of another person, that is—
(a)
the spouse of that other person,
(b)
the father, mother, and any child, uncle or aunt of that other person,
(c)
any child (other than that other person), and any child of a child, of any person who is by virtue of paragraph (a) or (b) a relative of that other person, and
(d)
the spouse of a person who is by virtue of paragraph (b) or (c) a relative of that other person,
(e)
the grandparent of that other person.
(5)
For the purposes of this Act, the relationship between a child, adopted in the manner referred to in paragraph (b) of the definition of “child” contained in subsection (1), and any other person, or between other persons, that would exist if such child had been born to the adoptor or adoptors in lawful wedlock, is deemed to exist between such child and that other person or between those other persons, and the relationship of any such child and any person that existed prior to that child being so adopted is deemed to have ceased.
(6)
For the purposes of this Act—
(a)
a reference to a person being resident in the State on a particular date is construed as a reference to that person being resident in the State in the year of assessment in which that date falls (but, for those purposes, the provisions of Part 34 of the Taxes Consolidation Act 1997 , relating to residence of individuals is not construed as requiring a year of assessment to have elapsed before a determination of whether or not a person is resident in the State on a date falling in that year may be made), and
(b)
a reference to a person being ordinarily resident in the State on a particular date is construed as a reference to that person being ordinarily resident in the State in the year of assessment in which that date falls.
(7)
In this Act, references to any enactment are, unless the context otherwise requires, construed as references to that enactment as amended or extended by any subsequent enactment.
(8)
In this Act, a reference to a Part, Chapter, section or Schedule is a reference to a Part, Chapter, section of, or Schedule to, this Act, unless it is indicated that reference to some other enactment is intended.
(9)
In this Act, a reference to a subsection, paragraph, subparagraph, clause or subclause is to the subsection, paragraph, subparagraph, clause or subclause of the provision (including a Schedule) in which the reference occurs, unless it is indicated that reference to some other provision is intended.
3-
Meaning of “on a death”.
[CATA 1976 s3]
(1)
In this Act, “on a death”, in relation to a person becoming beneficially entitled in possession, means—
(a)
on the death of a person or at a time ascertainable only by reference to the death of a person,
(b)
under a disposition where the date of the disposition is the date of the death of the disponer,
(c)
under a disposition where the date of the disposition is on or after 1 April 1975 and within 2 years prior to the death of the disponer, or
(d)
on the happening, after the cesser of an intervening life interest, of any such event as is referred to in subsection (2).
(2)
The events referred to in subsection (1)(d) are any of the following—
(a)
the determination or failure of any charge, estate, interest or trust,
(b)
the exercise of a special power of appointment,
(c)
in the case where a benefit was given under a disposition in such terms that the amount or value of the benefit could only be ascertained from time to time by the actual payment or application of property for the purpose of giving effect to the benefit, the making of any payment or the application of the property, or
(d)
any other event which, under a disposition, affects the right to property, or to the enjoyment of that property.
PART 2
Gift Tax
4-
Charge of gift tax.
[CATA 1976 s4 (part)]
A capital acquisitions tax, to be called gift tax and to be computed in accordance with this Act, shall, subject to this Act and any regulations made under the Act, be charged, levied and paid on the taxable value of every taxable gift taken by a donee.
5-
Gift deemed to be taken.
[CATA 1976 s5: FA 1993 s121(1) (part); FA 1994 s147 (part)]
(1)
For the purposes of this Act, a person is deemed to take a gift, where, under or in consequence of any disposition, a person becomes beneficially entitled in possession, otherwise than on a death, to any benefit (whether or not the person becoming so entitled already has any interest in the property in which such person takes such benefit), otherwise than for full consideration in money or money's worth paid by such person.
(2)
A gift is deemed—
(a)
to consist of the whole or the appropriate part, as the case may be, of the property in which the donee takes a benefit, or on which the benefit is charged or secured or on which the donee is entitled to have it charged or secured, and
(b)
if the benefit is an annuity or other periodic payment which is not charged on or secured by any property and which the donee is not entitled to have so charged or secured, to consist of such sum as would, if invested on the date of the gift in the security of the Government which was issued last before that date for subscription in the State and is redeemable not less than 10 years after the date of issue, yield, on the basis of the current yield on the security, an annual income equivalent to the annual value of the annuity or of the other periodic payment receivable by the donee.
(3)
For the purposes of section 6 (1)(c) and 6(2)(d), the sum referred to in subsection (2)(b) is deemed not to be situate in the State at the date of the gift.
(4)
Where a person makes a disposition under which a relative of the person becomes beneficially entitled in possession to any benefit, the creation or disposition in favour of the person of an annuity or other interest limited to cease on the death, or at a time ascertainable only by reference to the death, of the person, shall not be treated for the purposes of this section as consideration for the grant of such benefit or of any part of such benefit.
(5)
For the purposes of this Act, “appropriate part”, in relation to property referred to in subsection (2), means that part of the entire property in which the benefit subsists, or on which the benefit is charged or secured, or on which the donee is entitled to have it so charged or secured, which bears the same proportion to the entire property as the gross annual value of the benefit bears to the gross annual value of the entire property, and the gift shall be deemed to consist of the appropriate part of each and every item of property comprised in the entire property.
(6)
.........
(a)
Where a contract or agreement was entered into, under or as a consequence of which a person acquired the right, otherwise than for full consideration in money or money's worth, to have a benefit transferred to that person, or to another in that person's right or on that person's behalf, and an act or acts is or are done, on or after that date, in pursuance of, or in performance or satisfaction, whether in whole or in part, of such contract or agreement, then the gift or inheritance, as the case may be, taken by or in right or on behalf of that person, is deemed to have been taken, not when the right was acquired, but either—
(i)
when the benefit was transferred to that person or to another in that person's right or on that person's behalf, or
(ii)
when that person or another in that person's right or on that person's behalf became beneficially entitled in possession to the benefit,
whichever is the later.
(b)
In this subsection, a reference to a contract or agreement does not include a reference to a contract or agreement—
(i)
which is a complete grant, transfer, assignment or conveyance, or
(ii)
which was enforceable by action.
(7)
...........
(a)
In paragraph (b), the expression “shares in a private company” shall be construed by reference to the meanings that “share” and “private company” have, respectively, in section 27 .
(b)
Where a person becomes beneficially entitled in possession to a benefit, and the property in which the benefit is taken consists wholly or partly of shares in a private company and where the consideration referred to in subsection (1), being consideration in relation to a disposition, could not reasonably be regarded (taking into account the disponer's position prior to the disposition) as representing full consideration to the disponer for having made such a disposition, subsection (1) is deemed to apply as if “otherwise than for full consideration in money or money's worth paid by such person” were deleted in that subsection.
6-
Taxable gift.
[CATA 1976 s6 (part)]
(1)
In relation to a gift taken under a disposition, where the date of the disposition is before 1 December 1999, “taxable gift” in this Act means—
(a)
in the case of a gift, other than a gift taken under a discretionary trust, where the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift, the whole of the gift,
(b)
in the case of a gift taken under a discretionary trust where the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift or at the date of the gift or was (in the case of a gift taken after that donee's death) so domiciled at the time of that donee's death, the whole of the gift, and
(c)
in any other case, so much of the property of which the gift consists as is situate in the State at the date of the gift.
(2)
In relation to a gift taken under a disposition, where the date of the disposition is on or after 1 December 1999, “taxable gift” in this Act means—
(a)
in the case of a gift, other than a gift taken under a discretionary trust, where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the donee takes the gift, the whole of the gift,
(b)
in the case of a gift taken under a discretionary trust where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the donee takes the gift or at the date of the gift or was (in the case of a gift taken after the death of the disponer) so resident or ordinarily resident at the date of that death, the whole of the gift,
(c)
in the case where the donee is resident or ordinarily resident in the State at the date of the gift, the whole of the gift, and
(d)
in any other case, so much of the property of which the gift consists as is situate in the State at the date of the gift.
(3)
For the purposes of subsections (1)(c) and (2)(d), 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 .
(b)
For the purposes of subsection (2)(d), a proportion of the market value of any share in a private company incorporated outside the State which (after the taking of the gift) is a company controlled by the donee is deemed to be a sum situate in the State and is the amount determined by the following formula—
A ×
B
_
C
where
A is the market value of that share at the date of the gift 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 gift, and
C is the total market value of all property in the beneficial ownership of that company at the date of the gift.
(c)
Paragraph (b) shall not apply in a case where the disponer was domiciled outside the State at all times up to and including the date of the gift or, in the case of a gift taken after the death of the disponer, up to and including the date of that death or where the share in question is actually situate in the State at the date of the gift.
7-
Liability to gift tax in respect of gift taken by joint tenants.
[CATA 1976 s7]
The liability to gift tax in respect of a gift taken by persons as joint tenants is the same in all respects as if they took the gift as tenants in common in equal shares.
8-
Disponer in certain connected dispositions.
[CATA 1976 s8]
(1)
Where a donee takes a gift under a disposition made by a disponer (in this section referred to as the original disponer) and, within the period commencing 3 years before and ending 3 years after the date of that gift, the donee makes a disposition under which a second donee takes a gift and whether or not the second donee makes a disposition within the same period under which a third donee takes a gift, and so on, each donee is deemed to take a gift from the original disponer (and not from the immediate disponer under whose disposition the gift was taken); and a gift so deemed to be taken is deemed to be an inheritance (and not a gift) taken by the donee, as successor, from the original disponer if—
(a)
the original disponer dies within 2 years after the date of the disposition made by that original disponer, and
(b)
the date of the disposition was on or after 1 April 1975.
(2)
This section shall not apply in the case of any disposition (in this subsection referred to as the first-mentioned disposition) in so far as no other disposition, which was connected in the manner described in subsection (1) with such first-mentioned disposition, was made with a view to enabling or facilitating the making of the first-mentioned disposition or the recoupment in any manner of the cost of such first-mentioned disposition.
A capital acquisitions tax, to be called inheritance tax and to be computed in accordance with this Act, shall, subject to this Act and any regulations made under the Act, be charged, levied and paid on the taxable value of every taxable inheritance taken by a successor.
10-
Inheritance deemed to be taken.
[CATA 1976 s11; FA 1993 s123 (1) (part); FA 1994 s148 (part)]
(1)
For the purposes of this Act a person is deemed to take an inheritance, where, under or in consequence of any disposition, a person becomes beneficially entitled in possession on a death to any benefit (whether or not the person becoming so entitled already has any interest in the property in which such person takes such benefit), otherwise than for full consideration in money or money's worth paid by such person.
(2)
Subsections (2), (4) and (5) of section 5 shall apply, with any necessary modifications, in relation to an inheritance as they apply in relation to a gift.
(3)
For the purposes of section 11 (1)(b) and 11(2)(c), the sum referred to in section 5 (2)(b) is deemed not to be situate in the State at the date of the inheritance.
(4)
..........
(a)
In paragraph (b), the expression “shares in a private company” is construed by reference to the meanings that “share” and “private company” have, respectively, in section 27 .
(b)
Where a person becomes beneficially entitled in possession to a benefit, and the property in which the benefit is taken consists wholly or partly of shares in a private company and where the consideration referred to in subsection (1), being consideration in relation to a disposition, could not reasonably be regarded (taking into account the disponer's position prior to the disposition) as representing full consideration to the disponer for having made such a disposition, subsection (1) is deemed to apply as if “otherwise than for full consideration in money or money's worth paid by such person” were deleted in that subsection.
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.
(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 .
(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—
A ×
B
_
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.
(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.
