78 Heritage property of companies

Summary

This section ensures that shares in a family-controlled private company are exempt from tax to the extent that their value is derived from heritage property that would qualify under section 77 if the property was heritage property not owned by a company. The exemption will only apply where the heritage property is owned by the company on or before 12 April 1995.

Details

(1) “relevant heritage property” means heritage property (including a house or garden) which would be exempt from tax if the heritage property itself (rather than shares in a company owning the heritage property) were comprised in the gift or inheritance;

“private company” and “subsidiary” are self-explanatory.

(2) Where a gift or inheritance consists of shares in a company, those shares will be entitled to exemption from tax to the extent that their value is derived from relevant heritage property. Where the heritage property is acquired by the company after 12 April 1995, the exemption will not apply.

(3) Company shares appropriated by an executor in or towards satisfaction of a particular bequest qualify for exemption, notwithstanding that they were not part of the bequest in question.

(4) Where part of a share is exempt under this section and the share itself qualifies for business relief, then the value attributable to the heritage property does not also qualify for business relief.

(5) A clawback will apply where the company share in question is sold within 6 years after the valuation date, and before the death of the donee or successor.

(6) A clawback will also apply where—

• the heritage property is sold within 6 years after the valuation date and before the death of the donee or successor, or
• there has been a breach of the public access conditions prior to the death of the donee or successor, and prior to a sale (or another gift or inheritance to someone other than the spouse/civil partner of the donee or successor) of the company share or item of heritage property.

(7) Notwithstanding subsections (5) and (6), the exemption will continue to apply if the sale of the share or the item of relevant heritage property (as the case may be) is a sale by private treaty to the Chester Beatty Library, the Crawford Art Gallery Cork, the Irish Museum of Modern Art, the National Archives, the National Concert Hall, the National Gallery of Ireland, the National Library of Ireland, the National Museum of Ireland, any university in the State or any constituent college of such university, a local authority or the Friends of the National Collections of Ireland.

Relevant Date: Finance Act 2015