531AA Interpretation (Part 18C)

Summary

This section contains definitions of the various terms used in this Part.

Details

(1) This section contains a large number of definitions of terms used throughout this Part. The more important of these are:

“discretionary trust” means any disposition whereby property is held on trust 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 any one or more of a number or of a class of persons whether at the discretion of the trustees or any other person and notwithstanding that there may be a power to accumulate all or any part of the income;

“Irish property”, in relation to an individual and a valuation date, means all property situate in the State to which the individual is beneficially entitled in possession on the valuation date excluding —

• shares in a company which exists wholly or mainly for the purpose of carrying on a trade or trades,
• shares in a holding company which derive the greater part of their value from subsidiaries which wholly or mainly carry on a trade or trades;

“liability to income tax”, in relation to an individual and a tax year, means the amount of income tax due and payable by the individual for the tax year in accordance with the Tax Acts;

“relevant individual”, in relation to a tax year, means an individual —

• who is domiciled in the State in a tax year,
• whose world-wide income for the tax year exceeds €1m,
• whose liability to Irish income tax for the tax year is less than €200,000, and
• the market value of whose Irish property on the valuation date in the tax year is in excess of €5m;

(1A) “world-wide income”, in relation to an individual, means the individual’s gross income without regard to any reliefs, exemptions or deductions such as capital allowances or losses. However, a deduction will be allowed for payments made on foot of legally enforceable arrangements made in the State or in any other jurisdiction under which payments are made by an individual to another individual by virtue of the annulment or dissolution of a marriage or of a separation that is likely to be permanent or where a civil partnership has been dissolved or a relationship between cohabitants ends. A deduction will not be allowed for payments made under maintenance arrangements where permanently separated and, in certain circumstances, divorced couples or couples whose civil partnership has been dissolved or where a relationship between cohabitants ends elect to be assessed jointly for income tax purposes under section 1018 or section 1031K;

“valuation date”, in relation to a tax year, means 31 December in that year.

(2) Subject to subsection (3), an individual will be deemed to be beneficially entitled in possession on the valuation date to —

• (a) all property situate in the State which the individual has disposed of or transferred to his or her spouse/civil partner or minor children/minor children of his or her civil partner for less than market value on or after 18 February 2010,
• (b) all property situate in the State which the individual has disposed of to a discretionary trust for less than market value on or after 18 February 2010, and
• (c) all property situate in the State which the individual has disposed of or transferred to a foundation for less than market value on or after 18 February 2010.

(3)(a) Subsection (2)(a) will not apply to a maintenance arrangement within the meaning of section 1025, 1031J or 1031Q.

(3)(b) Subsection (2)(b) and (c) will not apply to a discretionary trust or a foundation, as the case may be, which is shown to the satisfaction of the Revenue Commissioners to have been created exclusively —

• (i) for purposes which, in accordance with the law of the State are charitable, or
• (ii) for the benefit of one or more named individuals and for the reason that such individual, or all such individuals, is or are because of age or improvidence or of physical, mental or legal incapacity incapable of managing that individual’s or those individuals’ affairs.

(4) For the purposes of this Part, where the whole or the greater part of the market value of any share in a company incorporated outside the State that would be a close company if it were incorporated in the State is attributable, directly or indirectly, to property situate in the State, that share will be deemed to be property situate in the State.

(5) No deduction will be made from the market value of property for any debts or encumbrances for the purpose of estimating such market value.

(6) References in this Part to the Revenue Commissioners shall be construed as including references to any of its officers.

Relevant Date: Finance Act 2019