Heritage Property Relief - CAT 8

Introduction

This leaflet gives an outline of the Capital Acquisitions Tax (including Probate Tax and Discretionary Trust Tax) relief’s available where a person takes a gift or inheritance of heritage property. It sets out the categories of heritage property which qualify for relief, the various conditions that must be satisfied and the procedures for making a claim.

Property Qualifying for Relief

There are essentially two broad categories of heritage property which qualify for Capital Acquistions Tax relief:

• Heritage Objects
• Heritage Houses and Gardens

Different qualifying conditions apply to each category.

Heritage Objects

What objects qualify for relief?

Any pictures, prints, books, manuscripts, works of art, jewellery, scientific collections or other things of that nature which appear to the Revenue Commissioners to be of national, scientific, historic or artistic interest.

What are the conditions for relief?

• the objects must be kept permanently in the State (except for temporary absences authorised by the Revenue Commissioners);
• reasonable facilities for viewing must be allowed to members of the public or to recognised bodies or associations of persons; and
• the objects must not be held for the purposes of trading (e.g. antique dealing, hotel or restaurant trade).

What is the extent of the relief?

Any object which satisfies the above conditions - and which is part of a gift or inheritance at the date of such gift or inheritance and at the valuation date - will be entirely exempt form Capital Acquisitions Tax. The beneficiary would simply exclude the value of the qualifying objects when computing any tax due. Neither is the value taken into account for aggregation purposes.

How is the relief claimed?

A Heritage Object Relief Claim must be made online by filing an IT38 (Inheritance Tax/Gift Tax Return form) through ROS, Revenue’s online service.

Can the relief be clawed back?

Yes. The exemptions will cease to apply (which means that the a beneficiary will have to recalculate his tax on the basis that the objects were not exempt) if any exempted object-

• is sold within 6 years of the valuation date and before the death of the beneficiary (except for a private treaty sale to the National Gallery, National Museum or similar national institution, any university in the State, a local authority or the Friends of the National Collections of Ireland); or
• is, other than with permission, moved outside the State or the reasonable viewing facilities referred to previously are withdrawn at any time after the valuation date and before -
  • the object is sold;
  • the beneficiary dies; or
  • the object is again passed on by way of an absolute gift or inheritance to a beneficiary who is not the spouse or civil partner of the first beneficiary.

Heritage Houses and Gardens

What houses and gardens qualify for relief?

Any house or garden in the State which appears to the Revenue Commissioners to be of national, scientific, historic or artistic interest.

What are the conditions for relief?

• reasonable access must have been allowed to the public during the three years prior to the gift or inheritance;
• reasonable access to the public must be allowed on an on-going basis; and
• the property must not be held for the purpose of trading.

What does “reasonable access” mean?

The minimum facilities which will be regarded as reasonable are

• access to the house or garden must be available for a minimum of 60 days in any year, of which 40 days must be in the months of May to September inclusive (subject to reasonable temporary closure for necessary repairs, maintenance or restoration);
• a minimum of four hours must be available for viewing, or a reasonable time and in a reasonable manner, on each day on which access is afforded;
• access must be to the whole or to a substantial part of the house or garden;
• the price of the access must be reasonable; and
• adequate notice of the opening hours and of the entrance charge must be given to the public.
• Bord Fáilte must be notified of full details of opening hours and admission prices before 1 January each year

What is the extent of the relief?

Any house or garden which satisfies the above conditions and which is part of a gift or inheritance at the date of such a gift or inheritance and at the valuation date will be entirely exempt form Capital Acquisitions Tax. The value of the house and garden would be excluded when computing any tax due. neither is the value taken into account for aggregation purposes.

How is the relief claimed?

A Heritage Property Relief Claim must be made online by filing an IT38 (Inheritance Tax/Gift Tax Return form) through ROS, Revenue’s online service.

Can the relief be clawed back?

Yes, the position is the same as that applying to heritage objects but obviously the question of moving the property outside the State does not arise.

Other Issues relating to Heritage Objects, Houses and Gardens

If a company owns the heritage property will the relief apply to shares in the company?

Yes. The relief applies provided that;

• the company owned the relevant heritage property on 12 April, 1995;
• the gift/inheritance is on or after the date;
• the conditions relating to access etc. are met; and
• the beneficiary, after taking the gift/inheritance, controls the company.

The shares are entitled to exemption to the extent that their value is derived form heritage property.

Is there a clawback of relief affecting shares in a company?

Yes. Where the shares (or the underlying heritage property) are sold or where the access provisions are breached, the position is broadly similar to that applying to gifts/inheritances consisting of heritage property.

Does the relief apply to Probate Tax and Discretionary Trust Tax?

Yes. The relief applies to Probate Tax and Discretionary Trust Tax. The conditions and clawback provisions which apply to Gift and Inheritance Tax also apply to Probate and Discretionary Trust Tax.

Further Information

Further information is available from:

Taxpayer Advisory Service,
1st Floor,
CRIO,
Cathedral Street,
Dublin 1.

Telephone: 1890 20 11 04

July 2011