Taxes Consolidation Act, 1997 (Number 39 of 1997)
[1]>
730D Gain arising on a chargeable event.
(1) On the happening of a chargeable event in relation to a life policy, there shall, [13]>subject to subsection (2)<[13][13]>subject to subsections (1A) and (2)<[13], be treated as arising—
(a) if the chargeable event is the maturity of the life policy or the surrender in whole of the rights thereby conferred, a gain in the amount determined under subsection (3)(a),
(b) if the chargeable event is an assignment of the whole of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(b),
(c) if the chargeable event is the surrender of part of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(c),
(d) if the chargeable event is the assignment of part of the rights conferred by the life policy, a gain in the amount determined under subsection (3)(d)[7]>, and<[7]
[8]>
(da) if the chargeable event is the ending of a relevant period in accordance with section 730C(1)(a)(iv), a gain in the amount determined under subsection (3)(da), and
<[8]
(e) if the chargeable event is deemed to happen on 31 December 2000 under section 730C(1)(b), a gain in the amount determined under subsection (3)(e).
[20]>
[14]>
(1A) Where—
(a) a chargeable event, not being a chargeable event within the meaning of section 730C(1)(a)(iv), occurs in relation to a life policy, and
(b) a chargeable event within the meaning of section 730C(1)(a)(iv) occurred previously in relation to that policy,
then the gain arising on the chargeable event referred to in paragraph (a) shall be determined as if section 730C(1)(a)(iv) had not been enacted.
<[14]
<[20]
[20]>
(1A) (a) Where—
(i) a chargeable event occurs in relation to a life policy, and
(ii) a chargeable event within the meaning of section 730C(1)(a)(iv) occurred previously in relation to that policy,
then the gain arising on the chargeable event referred to in subparagraph (i) shall be determined as if section 730C(1)(a)(iv) had not been enacted.
(b) Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is not the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be added to the value of the rights or other benefits conferred by that policy immediately before the chargeable event.
(c) Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be deducted from the amount of premiums taken into account in determining the gain on the happening of the chargeable event.
<[20]
[2]>
(2) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where, immediately before the chargeable event, the assurance company which commenced the life policy—
(a) is in possession of a declaration, in relation to the life policy, of a kind referred to in—
(i) section 730E(2), or
(ii) where the policyholder (within the meaning of section 730E) is not a company, section 730E(3), and
(b) is not in possession of any information which would reasonably suggest that—
(i) the information contained in that declaration is not, or is no longer, materially correct,
(ii) the policyholder (within the meaning of section 730E) failed to comply with the undertaking referred to in section 730E(2)(f) or, as the case may be, section 730E(3)(f), or
(iii) immediately before the chargeable event, the policyholder (within the said meaning) is resident or ordinarily resident in the State.
<[2]
[2]>
(2) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where—
(a) immediately before the chargeable event, the assurance company which commenced the life policy—
(i) is in possession of a declaration, in relation to the life policy, of a kind referred in section 730E(2), and
(ii) is not in possession of any information which would reasonably suggest that—
(I) the information contained in that declaration is not, or is no longer, materially correct,
(II) the policyholder (within the meaning of section 730E) failed to comply with the undertaking referred to in section 730E(2)(f), or
(III) immediately before the chargeable event the policyholder (within the said meaning) is resident or ordinarily resident in the State,
[6]>
(b) immediately before the chargeable event, the policy holder is—
(i) a company carrying on life business,
(ii) an investment undertaking (within the meaning of section 739B), [17]>or<[17]
[4]>
(iii) a person who is entitled to exemption from income tax by virtue of [18]>section 207(1)(b),<[18][18]>section 207(1)(b), or<[18]
<[4]
[4]>
(iii) a person who—
(I) is exempt from income tax under Schedule D by virtue of section 207(1)(b), or
(II) is exempt from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6), and
<[4]
[19]>
(iv) a PRSA provider (within the meaning of Chapter 2A of Part 30) where the policy is held by the PRSA provider in the course of the business of PRSA provider,
<[19]
and the assurance company which commenced the life policy is in possession of a declaration in relation to the life policy, of a kind referred to in section 730E(3), or
<[6]
[6]>
(b) immediately before the chargeable event, the policyholder is—
(i) a company carrying on life business,
(ii) an investment undertaking (within the meaning of section 739B),
(iii) (I) a person who is entitled to exemption from income tax under Schedule D by virtue of section 207(1)(b), or
(II) a person who is entitled to exemption from corporation tax by virtue of section 207(1)(b) as it applies for the purposes of corporation tax under section 76(6),
(iv) a PRSA provider (which has the same meaning as that assigned to it in Chapter 2A (inserted by the Pensions (Amendment) Act 2002) of Part 30),
(v) a credit union, [28]>or<[28]
(vi) a person entrusted to pay all premiums payable, in respect of the life policy, out of money under the control or subject to the order of [31]>any Court, [29]>or<[29]<[31][31]>any Court,<[31]
[30]>
(vii) the National Asset Management Agency,
<[30]
[32]>
(viii) a pension scheme being an exempt approved scheme within the meaning of section 774 or a trust scheme to which section 784 or 785 applies, or
(ix) an approved retirement fund within the meaning of section 784A or an approved minimum retirement fund within the meaning of section 784C,
<[32]
and the assurance company which commenced the life policy is in possession of a declaration, in relation to the life policy, of a kind referred to in [24]>section 730E(3), or<[24] [24]>section 730E(3),<[24]
<[6]
[36]>
(ba) the life policy is an investment made by the Motor Insurers" Bureau of Ireland of moneys paid to the Motor Insurers Insolvency Compensation Fund under the Insurance Act 1964 (amended by the Insurance (Amendment) Act 2018), and the Motor Insurers" Bureau of Ireland has made a declaration to that effect to the assurance company,
<[36]
(c) where the life policy is an asset held in a special savings incentive account within the meaning of section 848B (inserted by the Finance Act, 2001) and the assurance company which commenced the life policy is in possession of a declaration of a kind referred to in [25]>section 730E(3A).<[25] [25]>section 730E(3A),<[25]
<[2]
[33]>
(ca) where the life policy is an asset held by the National Treasury Management Agency or the State acting through the National Treasury Management Agency, and the National Treasury Management Agency has made a declaration to that effect to the assurance company, or
(cb) where the life policy is an asset held by a Fund investment vehicle (within the meaning of section 37 of the National Treasury Management Agency (Amendment) Act 2014) of which the Minister for Finance is the sole beneficial owner, and the National Treasury Management Agency has made a declaration to that effect to the assurance company.
<[33]
[34]>
[26]>
(d) where the life policy is an asset held by the National Pensions Reserve Fund Commission or the State acting through that Commission, and that Commission has made a declaration to that effect to the assurance company, or
<[26]
<[34]
[35]>
[27]>
(e) where the life policy is an asset held by a Commission investment vehicle (within the meaning given by section 2 of the National Pensions Reserve Fund Act 2000 (as amended by section 2 of the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009)) or the State acting through a Commission investment vehicle and the Commission investment vehicle has made a declaration to that effect to the assurance company.
<[27]
<[35]
[5]>
(2A)(a)In this subsection—
“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;
“EEA state” means a State, other than the State, which is a Contracting Party to the EEA Agreement;
“offshore state” means a State, other than the State, which is—
(a) a Member State of the European Communities, or
(b) a State which is an EEA state.
(b) A gain shall not be treated as arising on the happening of a chargeable event in relation to a life policy where—
[22]>
(i) the assurance company which commenced the life policy has established a branch in an offshore state,
<[22]
[22]>
(i) (I) (A) the assurance company which commenced the life policy has established a branch in an off-shore state, and
(B) the commitment represented by that life policy is covered by that branch,
or
(II) (A) the assurance company which commenced the life policy underwrites the business from the State on a freedom of services basis under Regulation 50 of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994) or other equivalent arrangement in an EEA state, and
(B) the policyholder resides in an offshore state,
and
<[22]
[23]>
(ii) the commitment represented by that life policy is covered through that branch, and
<[23]
(iii) the assurance company has received written approval from the Revenue Commissioners, to the effect that the provisions of subsection (2)(a) need not apply to the life policy, and that approval has not been withdrawn.
(c) The Revenue Commissioners may give the approval referred to in paragraph (b)(iii) subject to such conditions as they consider necessary.
(d) The Revenue Commissioners may nominate in writing an inspector or other officer to perform any acts and discharge any functions authorised by this subsection to be performed or discharged by the Revenue Commissioners.
<[5]
(3) The amount referred to—
(a) in subsection (1)(a) is the amount determined by the formula—
B – P,
(b) in subsection (1)(b) is the amount determined by the formula—
V – P,
(c) in subsection (1)(c) is the amount determined by the formula—
B |
− |
(P × B) |
|
V, |
(d) in subsection (1)(d) is the amount determined by the formula—
A |
− |
(P × A) |
|
V, |
[9]>
and
<[9]
[10]>
(da) in subsection (1)(da) is the amount determined by the formula—
V – P
and
<[10]
(e) in subsection (1)(e) is the amount determined by the formula—
V – P,
where—
B is the amount or value of the sum payable and other benefits arising by reason of the chargeable event,
P is subject to subsection (4), an amount of premiums (in this section referred to as “allowable premiums”) being the total of all premiums paid in respect of the life policy immediately before the chargeable event, to the extent that they have not been taken into account in determining a gain on the previous happening [21]>of a chargeable event,<[21][21]>of a chargeable event (not being a chargeable event within the meaning of section 730C(1)(a)(iv)),<[21]
V is the value of the rights and other benefits conferred by the life policy immediately before the chargeable event, and
A is the value of the part of the rights and other benefits conferred by the life policy, which has been assigned,
without having regard to any amount of appropriate tax (within the meaning of section 730F) in connection with the chargeable event.
(4) [3]>(a) For the purposes of subsection (3), the amount of premiums taken into account in determining a gain on the happening of a chargeable event is, where the gain is determined—<[3]
[3]>
(i) under paragraph (c) of subsection (3), an amount equal to—
(P × B) |
|
V |
and
(ii) under paragraph (d) of subsection (3), an amount equal to—
(P × A) |
|
V |
where P, A, B and V have, respectively, the meanings assigned to them in subsection (3).
<[3]
[3]>
(a) For the purposes of subsection (3), the amount of premiums taken into account in determining a gain on the happening of a chargeable event, is where the gain is, or would but for subsection (2) be determined—
(i) under paragraph (c) of subsection (3), an amount equal to the lesser of B and—
(P × B) |
|
V, |
and
(ii) under paragraph (d) of subsection (3), an amount equal to the lesser of A and—
(P × A) |
|
V, |
<[3]
(b) Where a chargeable event in relation to a life policy is deemed to happen on 31 December 2000 then, for the purposes of determining a gain arising on the happening of a subsequent chargeable event, the allowable premiums immediately after 31 December 2000 shall be deemed to be the greater of—
(i) an amount equal to the value of the policy immediately after 31 December 2000, and
(ii) the allowable premiums immediately before 31 December 2000.
[15]>
[11]>
(ba) Where a chargeable event in relation to a life policy is the ending of a relevant period in accordance with section 730C(1)(a)(iv) then, for the purposes of determining a gain arising on the happening of a subsequent chargeable event, the allowable premiums immediately after the time of such ending shall be deemed to be the greater of—
(i) an amount equal to the value of the policy immediately after the time of such ending, and
(ii) the allowable premiums immediately before such ending.
<[11]
<[15]
(c) Where a chargeable event in relation to a life policy is an assignment of the whole of the rights conferred by the life policy then, for the purposes of determining a gain arising on the happening of a subsequent chargeable event, the allowable premiums immediately after the time of assignment shall be deemed to be the greater of—
(i) an amount equal to the value of the policy immediately after the time of the assignment, and
(ii) the allowable premiums immediately before the assignment.
(d) Where a chargeable event in relation to a life policy is the assignment of part of the rights conferred by the life policy then the policy shall, for the purposes of determining a gain arising on the happening of any subsequent chargeable event, be treated as if it were comprised of 2 policies, that is—
(i) one policy conferring the part of the rights assigned, the allowable premiums in respect of which immediately after the assignment are an amount equal to the value of the policy immediately after the assignment, and
(ii) the other policy conferring the rights which were not assigned, the allowable premiums in respect of which immediately after the assignment are the amount of the allowable premiums immediately before the assignment reduced by the amount of premiums taken into account in determining a gain on the assignment.
[12]>
(5) (a) Where at any time—
(i) a chargeable event, being a chargeable event (in this subsection referred to as a “relevant event”) within the meaning of section 730C(1)(a)(iv), occurs in relation to a life policy which commenced before [16]>1 May 2005<[16][16]>1 May 2006<[16],
(ii) immediately before that time the assurance company that commenced the life policy does not have in its possession a declaration in relation to the policy of the kind referred to in subsection (2), and
(iii) the permanent address of the policy-holder, as stated in the policy, is not in the State and the assurance company does not have reasonable grounds to believe that the policyholder is resident in the State,
then the assurance company may elect to be treated in relation to that chargeable event for the purposes of subsection (2) as if, immediately before that time, the assurance company was in possession of a declaration in relation to the policy of the kind referred to in that subsection.
(b) Where at any time—
(i) a relevant event occurred in relation to a life policy and a chargeable event, not being a relevant event, subsequently occurs in relation to the policy,
(ii) this subsection applied to the relevant event in accordance with paragraph (a), and
(iii) immediately before that time the assurance company that commenced the life policy does not have in its possession a declaration in relation to the policy of the kind referred to in subsection (2),
then paragraph (a) shall be deemed not to have applied to the relevant event and any appropriate tax payable by virtue of a gain arising under this section shall be due and payable as if paragraph (a) had not been enacted.
<[12]
<[1]
[7]
Deleted by FA05 s42(1)(b)(i)(I). Per FA06 s48(2) applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv)) occurring from the time immediately before 31 March 2006.
[8]
Inserted by FA05 s42(1)(b)(i)(II). Per FA06 s48(2) applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv)) occurring from the time immediately before 31 March 2006.
[9]
Deleted by FA05 s42(1)(b)(ii)(I). Per FA06 s48(2) applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv)) occurring from the time immediately before 31 March 2006.
[10]
Inserted by FA05 s42(1)(b)(ii)(II). Per FA06 s48(2) applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv)) occurring from the time immediately before 31 March 2006.
[11]
Inserted by FA05 s42(1)(b)(iii). This section comes into operation on such day or days as the Minister for Finance may by order appoint either generally or with reference to any particular provision of this section or class of policy and different days may be so appointed for different provisions of this section or for different classes of policies.
[12]
Inserted by FA05 s42(1)(b)(iv). Per FA06 s48(2) applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv)) occurring from the time immediately before 31 March 2006.
[13]
Substituted by FA06 s48(1)(b)(i). Applies and has effect as respects any chargeable event occurring on or after 31 March 2006
[14]
Inserted by FA06 s48(1)(b)(ii). Applies and has effect as respects any chargeable event occurring on or after 31 March 2006
[15]
Deleted by FA06 s48(1)(b)(iii). Applies and has effect as respects any chargeable event occurring on or after 31 March 2006
[16]
Substituted by FA06 s48(1)(b)(iv). Applies and has effect as respects any chargeable event occurring on or after 31 March 2006
[20]
Substituted by FA07 s43(1)(b). Applies and has effect as respects any chargeable event occurring on or after 2 April 2007
[21]
Substituted by FA07 s43(1)(c). Applies and has effect as respects any chargeable event occurring on or after 2 April 2007
[24]
Inserted by the the Financial Measures (Miscellaneous Provisions) Act 2009 Sched2(6)(2)
[25]
Inserted by the the Financial Measures (Miscellaneous Provisions) Act 2009 Sched2(6)(3)
[31]
Substituted by FA12 s29(a). Deemed to have come into force and takes effect on and from 1 January 2012.
[32]
Inserted by FA12 s29(b). Deemed to have come into force and takes effect on and from 1 January 2012.