Revenue Note for Guidance

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Revenue Note for Guidance

16 Application of this Act

Summary

Certain provisions of the Act, which apply to inheritances generally, are restricted or amended to allow for the fact that the successor in question is a notional successor.

Details

Where a charge to discretionary trust tax arises under section 15, all the provisions of the Act apply to such a charge, but with the following exceptions:

  • (a) a reference in section 27 to a company controlled by the successor and the definition of “group of shares” in that section is construed as if the list of persons contained in subsection (3) of that section included the following:
    • the trustees of the discretionary trust,
    • the living objects of the discretionary trust,
    • the relatives of those objects,

    nominees of those trustees or of the relatives (see note on section 2(4)) of those objects, and
    the trustees of a settlement whose objects include the living objects of the discretionary trust or relatives of those living objects;
  • (b) the valuation date of the notional inheritance will be the date of the inheritance or the valuation date ascertained in accordance with section 30, whichever is the later date;
  • (c) since there is no actual successor as such, the trustees (who are deemed to take an inheritance) are the persons primarily accountable for the payment of the tax;
  • (d) any object of the trust who has received a benefit from the trust subsequent to the date of the charge is also accountable for the payment of the tax;
  • (e) sections 45(1), 50, 56 and 81 and Schedule 2 do not apply to discretionary trust tax.

Section 45(1) specifies the persons who are primarily accountable for the payment of capital acquisitions tax. That provision is replaced by paragraph (c). Section 50 and Schedule 2, which deal with the computation of the tax, are replaced by section 18 of this Act.

Section 56 deals with the payment of inheritance tax by transfer of Government securities and section 81 grants exemption in respect of Government securities when in the beneficial ownership of a person neither resident nor ordinarily resident in the State.

Relevant Date: Finance Act 2015