Revenue Note for Guidance

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Revenue Note for Guidance

30 Valuation date for tax purposes

Summary

This section lays down rules for ascertaining the date on which property, taken as a gift or an inheritance, is to be valued. In respect of gifts, the donee is normally entitled from the date of the gift and this date is the usual valuation date. For inheritances, the valuation date is, normally, the date of ascertainment of the residue or other benefit and of its retainer for the benefit of the successor.

Details

(1) The date of the gift is the valuation date for a taxable gift except for the type of gift dealt with in subsection (7) i.e. a disposal of property which is comprised in an inheritance before the valuation date for the inheritance has arrived.

(2) The “date of the gift” is defined in section 2 as the date of the event on which the donee becomes beneficially entitled in possession.

The date of death of the person on whose death an inheritance is taken is prescribed as the valuation date in the following cases:

  • a donatio mortis causa (i.e. a gift made in contemplation of death) which becomes effective only if that death occurs;
  • an inheritance taken by a person when a disponer, who had power to revoke the disposition, dies without revoking it. This is the type of case referred to in section 39 and, if the power ceases on the disponer’s death, the property is deemed to vest beneficially in possession in the beneficiary “on a death” under section 3 and is thus an inheritance.

In these exceptional cases, the “date of the inheritance”, as defined in section 2, is the same as the valuation date.

(3) Where a gift is taken under a disposition made within 2 years of the disponer’s death, it becomes an inheritance. As the donee clearly took the gift at the date of the gift, the valuation date for the inheritance will be the date of the gift (under subsection (1)). This is the date on which the property is valued (as for gift tax), but interest on the inheritance tax, under the provisions of section 51(7), is not charged for the period from the valuation date to the date of death of the disponer.

In the case of any other taxable inheritances (which covers most inheritances), the valuation date is the earliest of the following dates:

  • (4)(a) the earliest date on which the successor’s inheritance may be lawfully retained by him/her (i.e. set aside for him/her or given to him/her);
  • (4)(b) the date of the actual retention (e.g. a son to whom lands are devised might enter the lands and retain them for his own benefit on the date of death of his father). If the estate was solvent, the later assent by the executor would be a mere formality;
  • (4)(c) the date of delivery, payment, satisfaction or discharge of the inheritance (e.g. the actual date of payment or part-payment of a legacy – see subsection(5));
  • (4)(d) payment, delivery, etc. to another person on behalf of the successor or to a person claiming in right of (e.g. his/her executor or assignee) or on behalf of (e.g. his/her guardian) the successor is equivalent to payment, delivery, etc. to the successor.

(5) Where advances are made out of an inheritance, each payment in advance or part payment is treated as being retained on the date of such payment as if it were a separate inheritance. Thus, if a successor is entitled to a residuary bequest and receives shares worth €100,000 on 1 March 2004, cash amounting to €10,000 on 1 June 2004 and the balance on 1 August 2004, the valuation date will, respectively, be 1 March, 1 June and 1 August for the 3 separate parts of the inheritance.

(6) The Revenue Commissioners have power to determine (subject to an appeal under the provisions of subsection (9) below) the valuation date in respect of the whole or part of the inheritance.

(7) Where a person makes a gift of his/her share in the estate of a deceased person before the distribution has actually occurred, the valuation date of the gift will be the same as the valuation date of his/her inheritance.

(8) In doubtful cases, the Revenue Commissioners have the power to determine the valuation date by agreement with the taxpayer.

(9) The normal appeal procedures available under section 67 apply in relation to an appeal against a determination issued by the Revenue Commissioners under subsection (6).

Relevant Date: Finance Act 2015