10 Inheritance deemed to be taken

Summary

This section relates the charge to tax on inheritances to the property involved in the same way as section 5 does for gifts.

Details

(1) Where, under a disposition, a person becomes beneficially entitled in possession on a death to any benefit otherwise than for full consideration in money or money’s worth, he/she is deemed to take an inheritance. This is so irrespective of whether the person becoming so entitled already has an interest in the property in which he/she takes such benefit.

(2) The provisions of subsections (2), (4) and (5) of section 5 apply, subject to any necessary modifications, in relation to an inheritance as they apply in relation to a gift (see notes on section 5 for details regarding those subsections).

(3) Tax is not chargeable on the notional sum deemed to exist for the purposes of section 5(2)(b) where the disponer was not domiciled in the State at the date of the disposition, where that date was before 1 December 1999. This is also the case where the disponer or the successor are not resident or ordinarily resident in the State at the date of the disposition, where that date is on or after 1 December 1999 (see note on section 5(3)).

(4) Where an inheritance arises on the transfer of shares in a family-controlled private company, the value of such shares is ascertained for inheritance tax purposes in accordance with section 27. Genuine arm’s length sales are excluded from this provision, however.

Relevant Date: Finance Act 2015