Taxes Consolidation Act, 1997 (Number 39 of 1997)
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579A Attribution of gains to beneficiaries.
(1)(a) For the purposes of this section and the following sections of this Chapter, “capital payments” means any payment which is not chargeable to income tax on the recipient or, in the case of a recipient who is neither resident nor ordinarily resident in the State, any payment received otherwise than as income, but does not include a payment under a transaction entered into at arm’s length.
(b)In paragraph (a) references to a payment include references to the transfer of an asset and the conferring of any benefit, and to any occasion on which settled property becomes property to which section 567(2) applies.
(c)The amount of a capital payment made by way of loan, and of any other capital payment which is not an outright payment of money, shall be taken to be equal to the value of the benefit conferred by it.
(d)A capital payment shall be treated as received by a beneficiary from the trustees of a settlement if—
(i)the beneficiary receives it from the trustees directly or indirectly,
(ii)it is directly or indirectly applied by the trustees in payment of any debt of the beneficiary or is otherwise paid for the benefit of the beneficiary, or
(iii)it is received by a third party at the beneficiary’s direction.
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(2)Subject to subsection (10), this section shall apply to a settlement for any year of assessment during which the trustees are, at no time, neither resident nor ordinarily resident in the State.
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(2) (a) This section shall apply to a settlement for any year of assessment (beginning on or after 6 April 1999) during which the trustees are at no time resident or ordinarily resident in the State, and—
(i) the settlor does not have an interest in the settlement at any time in that year of assessment, or
(ii) the settlor does have an interest in the settlement but—
(I) was not domiciled in the State, and
(II) was neither resident nor ordinarily resident in the State,
in that year of assessment, or when the settlor made the settlement.
(b) Section 579 shall not apply as respects chargeable gains accruing after 5 April 1999 to trustees of a settlement to which this section applies; and references in subsections (4) and (5) to capital payments received by beneficiaries do not include references to any payments received before 11 February 1999 or any payments received on or after that date so far as they represent a chargeable gain which accrued to the trustees in respect of a disposal by the trustees before 11 February 1999.
(c) For the purposes of this subsection a settlor has an interest in a settlement if—
(i) any relevant property which is, or may at any time become, comprised in the settlement is, or will or may become, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary,
(ii) any relevant income which arises, or may arise, under the settlement is, or will or may become, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary, or
(iii) a relevant beneficiary enjoys a benefit directly or indirectly from any relevant property which is comprised in the settlement or any relevant income arising under the settlement.
(d) In this subsection—
“relevant beneficiary” means—
(i) the settlor,
(ii) the [4]>spouse<[4][4]>spouse or civil partner<[4] of the settlor,
(iii) a company controlled by either or both the settlor and the [4]>spouse<[4][4]>spouse or civil partner<[4] of the settlor, or
(iv) a company associated with a company referred to in paragraph (iii) of this definition;
“relevant income” means income originating from the settlor;
“relevant property” means property originating from the settlor.
(e) For the purposes of this subsection—
(i) references to property originating from a person are references to property provided by that person, and property representing that property,
(ii) references to income originating from a person are references to income from property originating from that person and income provided by that person,
(iii) whether a company is controlled by a person or persons shall be construed in accordance with section 432 without regard to subsection (6) of that section,
(iv) whether a company is associated with another company shall be construed in accordance with section 432 without regard to subsection (6) of that section, and
(v) references to relevant property comprised in a settlement being, or becoming, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary, do not include references to the repayment of, or obligation to repay, a loan to a settlor which loan was provided by the settlor to the trustees of the settlement on terms that it would be repaid.
(f) Where, for the year of assessment 2002 or any subsequent year of assessment, chargeable gains are treated as accruing to a beneficiary under a settlement by virtue of section 579, then notwithstanding that section such chargeable gains, in so far as they are in respect of a disposal made on or after 7 March 2002 by the trustees of the settlement, shall be treated as accruing to the settlor in relation to the settlement and not to any other person, if the settlor is resident or ordinarily resident in the State, whether or not the settlor is the beneficiary.
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(3)There shall be computed in respect of every year of assessment for which this section applies the amount on which the trustees would have been chargeable to capital gains tax under section 31 if they had been resident and ordinarily resident in the State in the year of assessment and that amount, together with the corresponding amount in respect of any earlier such year of assessment, so far as not already treated under subsection (4) or section 579F(2) as chargeable gains accruing to beneficiaries under the settlement, is in this section referred to as “the trust gains for the year of assessment”.
(4)Subject to this section, the trust gains for a year of assessment shall be treated for the purposes of the Capital Gains Tax Acts as chargeable gains accruing in the year of assessment to beneficiaries of the settlement who receive capital payments from the trustees in the year of assessment or have received such payments in any earlier year of assessment.
(5)The attribution of chargeable gains to beneficiaries under subsection (4) shall be made in proportion to, but shall not exceed, the amounts of capital payments received by them.
(6)A capital payment shall be left out of account for the purposes of subsections (4) and (5) to the extent that chargeable gains have, by reason of the payment, been treated as accruing to the recipient in an earlier year of assessment.
(7)A beneficiary shall not be charged to tax on chargeable gains treated by virtue of subsection (4) as accruing to him or her in any year of assessment unless he or she is domiciled in the State at some time in that year of assessment.
(8)For the purposes of this section a settlement arising under a will or intestacy shall be treated as made by the testator or, as the case may be, intestate at the time of death.
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(9)In any case in which the amount of any capital gains tax payable by a beneficiary under a settlement in accordance with this section is paid by the trustees of the settlement, such amount shall not for the purposes of income tax or capital gains tax be regarded as a payment to the beneficiary.
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(9A) This section shall not apply where it is shown to the satisfaction of the Revenue Commissioners that the settlement was established for bona fide commercial reasons and did not form part of an arrangement of which the main purpose or one of the main purposes was the avoidance of liability to capital gains tax.
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(9A) This section shall not apply where it is shown in writing or otherwise to the satisfaction of the Revenue Commissioners that, at the time when the charge to capital gains tax arises, genuine economic activities are carried on by the settlement in a relevant Member State (within the meaning of section 806(11)(a)).
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(10)Subsection (2) shall not apply in relation to any year of assessment beginning before the 6th day of April, 1999, and the references in subsections (4) and (5) to capital payments received by beneficiaries do not include references to any payments received before the 11th day of February, 1999, or any payments received on or after that date so far as they represent a chargeable gain which accrued to the trustees in respect of a disposal by the trustees before the 11th day of February, 1999.
(11)Where this section applies so as to charge a person to tax on chargeable gains, section 579 shall not apply in respect of those chargeable gains.
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Inserted by FA99 s88(1). This section shall apply as on and from the 11th day of February, 1999.
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Substituted by FA02 s47(1)(a). This section is deemed to have applied as on and from 11 February 1999.
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Deleted by FA02 s47(1)(b). This section is deemed to have applied as on and from 11 February 1999.