Trusts & Estate
TAXES CONSOLIDATION ACT
Chapter 3
Assets held in a fiduciary or representative capacity, inheritances and settlements (ss. 567-579F)
567.
Nominees, bare trustees and agents.
(1)References in the Capital Gains Tax Acts to any asset held by a person as trustee for another person absolutely entitled as against the trustee are references to a case where that other person has the exclusive right, or would have such a right if that other person were not an infant or other person under disability, subject only to satisfying any outstanding charge, lien or right of the trustees to resort to the asset for payment of duty, taxes, costs or other outgoings, to direct how that asset shall be dealt with.
(2)In relation to assets held by a person (in this subsection referred to as “the first-mentioned person”) as nominee for another person, or as trustee for another person absolutely entitled as against the trustee, or for any person who would be so entitled but for being an infant or other person under disability (or for 2 or more persons who are or would be jointly so entitled), the Capital Gains Tax Acts shall apply as if the property were vested in, and the acts of the first-mentioned person in relation to the assets were the acts of, the person or persons for whom the first-mentioned person is the nominee or trustee (acquisitions from or disposals to the first-mentioned person by that person or those persons being disregarded accordingly).
(3)Where exploration or exploitation activities are carried on by a person on behalf of the holder of a licence or lease granted under the Petroleum and Other Minerals Development Act, 1960, such holder shall for the purpose of an assessment to capital gains tax be deemed to be the agent of that person.
(4)Schedule 1 shall apply for the purpose of supplementing subsection (3).
568.
Liability of trustees, etc.
(1)Capital gains tax chargeable in respect of chargeable gains accruing to the trustees of a settlement or capital gains tax due from the personal representatives of a deceased person may be assessed and charged on and in the name of one or more of those trustees or personal representatives.
(2)Subject to section 567(2), chargeable gains accruing to the trustees of a settlement or to the personal representatives of a deceased person, and capital gains tax chargeable on or in the name of such trustees or personal representatives, shall not be regarded for the purposes of the Capital Gains Tax Acts as accruing to or chargeable on any other person, nor shall any trustee or personal representative be regarded for the purposes of those Acts as an individual.
569.
Assets of insolvent person.
(1)In this section –
‘deed of arrangement’ means a deed of arrangement to which the Deeds of Arrangement Act 1887 applies;
‘insolvent person’ means an individual who is insolvent and who has entered into a Debt Settlement Arrangement or a Personal Insolvency Arrangement (both within the meaning of section 2 of the Personal Insolvency Act 2012) with his or her creditors;
‘relevant person’ means a personal insolvency practitioner (within the meaning of the Personal Insolvency Act 2012) who holds the assets of an insolvent person in trust for the benefit of creditors of that insolvent person under a Debt Settlement Arrangement or a Personal Insolvency Arrangement (both within the meaning aforesaid).
(2)In relation to assets held by a person as trustee or assignee in bankruptcy or under a deed of arrangement or by a relevant person, the Capital Gains Tax Acts shall apply as if the assets were vested in, and the acts of the trustee, assignee or relevant person in relation to the assets were the acts of, the bankrupt, debtor or insolvent person (acquisitions from or disposals to such person by the bankrupt, debtor or insolvent person being disregarded accordingly), and tax in respect of any chargeable gains which accrue to any such trustee, assignee or relevant person shall be assessable on and recoverable from such trustee, assignee or relevant person.
(3)Assets held by a trustee or assignee in bankruptcy or under a deed of arrangement or by a relevant person at the death of the bankrupt, debtor or insolvent person shall for the purposes of the Capital Gains Tax Acts be regarded as held by a personal representative of the deceased, and –
(a)subsection (2) shall not apply after the death, and
(b)section 573(2) shall apply as if any assets held by a trustee or assignee in bankruptcy or under a deed of arrangement or by a relevant person at the death of the bankrupt, debtor or insolvent person were assets of which the deceased was competent to dispose and which then devolved on the trustee or assignee in bankruptcy or the relevant person as if the trustee or assignee in bankruptcy or the relevant person were a personal representative.
(4)Assets vesting in a trustee in bankruptcy or a relevant person after the death of the bankrupt, debtor or insolvent person shall for the purposes of the Capital Gains Tax Acts be regarded as held by a personal representative of the deceased, and subsection (2) shall not apply.
570.
Company in liquidation.
Where assets of a company are vested in a liquidator under section 614 of the Companies Act 2014, or otherwise, the Capital Gains Tax Acts shall apply as if the assets were vested in, and the acts of the liquidator in relation to the assets were acts of, the company (acquisitions from or disposals to the liquidator by the company being disregarded accordingly).
571.
Chargeable gains accruing on disposals by liquidators and certain other persons.
(1)In this section –
“accountable person” means –
(a)a liquidator of a company, or
(b)any person entitled to an asset by means of security or to the benefit of a charge or encumbrance on an asset or, as the case may be, any person appointed to enforce or give effect to the security, charge or encumbrance;
“the company” has the meaning assigned to it by subsection (6);
“the debtor” has the meaning assigned to it by subsection (5);
“referable capital gains tax” has the meaning assigned to it by subsection (2);
“referable corporation tax” has the meaning assigned to it by subsection (3);
“relevant disposal” has the same meaning as in section 648.
(2)In this section –
(a)in a case where no chargeable gains other than the chargeable gains mentioned in subsection (5)(a) (in this subsection referred to as “the referable gains”) accrued to the debtor in the year of assessment, “referable capital gains tax” means the amount of capital gains tax which apart from subsection (5) would be assessable on the debtor in respect of the referable gains;
(b)in a case where, in addition to the referable gains, other chargeable gains accrued to the debtor in the year of assessment and, in charging all of those gains to capital gains tax without regard to subsection (5), the same rate of tax would apply, and either –
(i)none of the disposals on which the chargeable gains accrued is a relevant disposal, or
(ii)each of the disposals is a relevant disposal,
“referable capital gains tax” means an amount of tax determined by the formula –
Ais the amount of capital gains tax which apart from subsection (5) would be assessable on the debtor in respect of the referable gains if no other chargeable gains accrued to the debtor in the year of assessment and if no deductions or reliefs were to be allowed against the referable gains,
Bis the amount of capital gains tax which apart from subsection (5) would be assessable on the debtor in respect of all chargeable gains, including the referable gains, which accrued to the debtor in the year of assessment, if no deductions or reliefs were to be allowed against those chargeable gains, and
Cis the amount of capital gains tax which apart from subsection (5) would be assessable on the debtor in respect of the total amount of chargeable gains, including the referable gains, which accrued to the debtor in the year of assessment;
(c)in any other case, “referable capital gains tax” means the amount of capital gains tax which apart from subsection (5) and taking into account –
(i)all other chargeable gains accruing to the debtor in the year of assessment, and
(ii)where appropriate, sections 546(6), 601(3) and 653,
would be the amount of capital gains tax appropriate to the referable gains.
(3)In this section –
(a)in a case where no chargeable gains other than –
(i)the chargeable gains mentioned in subsection (6)(a) (in this subsection referred to as “the referable gains”), or
(ii)any chargeable gains accruing on a relevant disposal,
accrued to the company in the accounting period, “referable corporation tax” means the amount of capital gains tax which apart from subsection (6) would be assessable on the company in respect of the referable gains on the assumptions that –
(I)notwithstanding any provision to the contrary in the Corporation Tax Acts, capital gains tax was to be charged in respect of the refereable gains in accordance with the Capital Gains Tax Acts, and
(II)accounting periods were years of assessment,
or, if it is less, the amount of corporation tax which apart from subsection (6) would be assessable on the company for the accounting period;
(b)in a case where, in addition to the referable gains, other chargeable gains (not being chargeable gains accruing on a relevant disposal) accrued to the company in the accounting period and, on the assumptions made in paragraph (a), in charging all of those gains to capital gains tax without regard to subsection (6), the same rate of tax would apply, “referable corporation tax” means an amount of tax determined by the formula –
where –
Dis the amount of capital gains tax which, apart from subsection (6) and on the assumptions made in paragraph (a), would be assessable on the company in respect of the referable gains if no other chargeable gains accrued to the company in the accounting period and if no deductions or reliefs were to be allowed against the referable gains,
Eis the amount of capital gains tax which, apart from subsection (6) and on the assumptions made in paragraph (a), would be assessable on the company in respect of all chargeable gains including the referable gains (but not including chargeable gains accruing on a relevant disposal) which accrued to the company in the accounting period, if no deductions or reliefs were to be allowed against those chargeable gains, and
Fis the amount (in this subsection referred to as “the notional amount”) of capital gains tax which apart from subsection (6) would in accordance with section 78(2) be calculated in relation to the company for the accounting period in respect of all chargeable gains including the referable gains or, if it is less, the amount of corporation tax which apart from subsection (6) would be assessable on the company for the accounting period;
(c)
(i)in any other case, “referable corporation tax” means, subject to subparagraph (ii), the amount of capital gains tax which, apart from subsection (6) and on the assumptions made in paragraph (a), and taking into account –
(I)all other chargeable gains (not being chargeable gains accruing on a relevant disposal) accruing to the company in the accounting period, and
(II)where appropriate, sections 546(6) and 653,
would be the amount of capital gains tax appropriate to the referable gains;
(ii)in any case in which subparagraph (i) applies, if the notional amount is greater than the amount of corporation tax which apart from subsection (6) would be assessable on the company for the accounting period, “referable corporation tax” shall mean an amount determined by the formula –
where –
Gis the amount which under subparagraph (i) would be the referable corporation tax,
His the notional amount, and
Kis the amount of corporation tax which apart from subsection (6) would be assessable on the company for the accounting period.
(4)
(a)In any case where, in calculating an amount of referable capital gains tax or referable corporation tax under subsection (2)(c) or (3)(c), deductions or reliefs were to be allowed against chargeable gains accruing in a year of assessment or in an accounting period and apart from this subsection those deductions or reliefs (or part of them) would be set against 2 or more chargeable gains chargeable at the same rate of capital gains tax, then, those deductions or reliefs (or, as the case may be, that part of them) shall, in so far as is necessary to calculate the amount of referable capital gains tax or referable corporation tax, be apportioned between the chargeable gains chargeable at the same rate in proportion to the amounts of those chargeable gains.
(b)In the case of chargeable gains accruing to a company (not being chargeable gains accruing on a relevant disposal), any reference in paragraph (a) to a rate of tax shall be construed as a reference to the rate of capital gains tax which would be applicable to those gains on the assumptions made in subsection (3)(a).
(5)Where section 537(2) or 570 applies in respect of the disposal of an asset in a year of assessment by an accountable person, then, notwithstanding any provision of the Capital Gains Tax Acts –
(a)any referable capital gains tax in respect of any chargeable gains which accrue on the disposal shall be assessable on and recoverable from the accountable person,
(b)the referable capital gains tax shall be treated as a necessary disbursement out of the proceeds of the disposal and shall be paid by the accountable person out of those proceeds, and
(c)referable capital gains tax paid by the accountable person shall discharge a corresponding amount of the liability to capital gains tax, for the year of assessment in which the disposal is made, of the person (in this section referred to as “the debtor”) who apart from this subsection is the chargeable person in relation to the disposal.
(6)Where section 78(8) or 537(2) applies in respect of the disposal (not being a relevant disposal) of an asset in an accounting period of a company by an accountable person, then, notwithstanding any provision of the Corporation Tax Acts –
(a)any referable corporation tax in respect of any chargeable gains which accrue on the disposal shall be assessable on and recoverable from the accountable person,
(b)the referable corporation tax shall be treated as a necessary disbursement out of the proceeds of the disposal and shall be paid by the accountable person out of those proceeds, and
(c)referable corporation tax paid by the accountable person shall discharge a corresponding amount of the liability to corporation tax, for the accounting period in which the disposal is made, of the company (in this section referred to as “the company”) which apart from this subsection is the chargeable person in relation to the disposal.
(7)Notwithstanding any provision of the Capital Gains Tax Acts or of the Corporation Tax Acts, the amount of referable capital gains tax or referable corporation tax, as the case may be, which under this section is assessable on an accountable person in relation to a disposal, shall be recoverable by an assessment on the accountable person to income tax under Case IV of Schedule D for the year of assessment in which the disposal occurred on an amount the income tax on which at the standard rate for that year of assessment is equal to the amount of the referable capital gains tax or referable corporation tax, as the case may be.
(8)Where tax is paid by an accountable person under this section and it is established that the amount of tax paid is excessive, appropriate relief by means of repayment or otherwise shall be given to the accountable person.
(9)Subject to subsections (5)(c) and (6)(c), nothing in this section shall affect the amount of chargeable gains on which –
(a)the debtor is chargeable to capital gains tax, or
(b)the company is chargeable to corporation tax.
572.
Funds in court.
(1)In this section –
“the Accountant” means the Accountant attached to the court or a deputy appointed by the Minister for Justice, Equality and Law Reform;
“court” means the High Court except where the reference is to the Circuit Court;
“funds in court” means any moneys (and investments representing such moneys), annuities, stocks, shares or other securities standing or to be placed to the account of the Accountant in the books of the Bank of Ireland or any company, and includes boxes and other effects.
(2)For the purposes of section 567(2), funds in court shall be regarded as held by the Accountant as nominee for the persons entitled to or interested in the funds or, as the case may be, for their trustees.
(3)Where funds in court standing to an account in the books of the Accountant are invested or after investment are realised, the method by which the Accountant effects the investment or the realisation of investments shall not affect the question as to whether there is for the purposes of the Capital Gains Tax Acts an acquisition or, as the case may be, a disposal of an asset representing funds in court standing to that account, and in particular there shall for those purposes be an acquisition or disposal of assets notwithstanding that the investment of funds in court standing to an account in the books of the Accountant, or the realisation of funds which have been so invested, is effected by setting off in the Accountant’s accounts investment in one account against realisation of investments in another.
(4)This section shall apply with any necessary modifications to funds in the Circuit Court as it applies to funds in court.
573.
Death.
(1)In this section, references to assets of which a deceased person was competent to dispose are references to assets of the deceased which the deceased could if of full age and capacity have disposed of by will, assuming that all the assets were situated in the State and that the deceased was domiciled in the State, and include references to the deceased’s severable share in any assets to which immediately before his or her death he or she was beneficially entitled as a joint tenant.
(2)For the purposes of the Capital Gains Tax Acts, the assets of which a deceased person was competent to dispose –
(a)shall be deemed to be acquired on his or her death by the personal representatives or other person on whom they devolve for a consideration equal to their market value at the date of the death; but
(b)shall not be deemed to be disposed of by him or her on his or her death (whether or not they were the subject of a testamentary disposition).
(3)Allowable losses sustained by an individual in the year of assessment in which he or she dies may, in so far as they cannot be deducted from chargeable gains accruing in that year, be deducted from chargeable gains accruing to the deceased in the 3 years of assessment preceding the year of assessment in which the death occurs, taking chargeable gains accruing in a later year before those accruing in an earlier year, and there shall be made all such amendments of assessments or repayments of tax as may be necessary to give effect to this subsection.
(4)In relation to property forming part of the estate of a deceased person, the personal representatives shall for the purposes of the Capital Gains Tax Acts be treated as being a single and continuing body of persons (distinct from the persons who may from time to time be the personal representatives), and that body shall be treated as having the deceased’s residence, ordinary residence and domicile at the date of death.
(5)Where any asset is acquired by a person as legatee no chargeable gain shall accrue to the personal representatives, but the legatee shall be treated as if the personal representatives’ acquisition of the asset had been the legatee’s acquisition of the asset.
(6)Where not more than 2 years, or such longer period as the Revenue Commissioners may by notice in writing allow, after a death any of the dispositions of the property of which the deceased was competent to dispose, whether effected by will or under the law relating to intestacies or otherwise, are varied by a deed of family arrangement or similar instrument, this section shall apply as if the variations made by the deed or other instrument were effected by the deceased, and no disposition made by the deed or other instrument shall constitute a disposal for the purposes of the Capital Gains Tax Acts.
574.
Trustees of settlement.
(1)
(a)In relation to settled property, the trustees of a settlement shall for the purposes of the Capital Gains Tax Acts be treated as being a single and continuing body of persons (distinct from the persons who may from time to time be the trustees) and, subject to paragraph (b), that body shall be treated as being resident and ordinarily resident in the State unless the general administration of the trusts is ordinarily carried on outside the State and the trustees or a majority of them for the time being are not resident or not ordinarily resident in the State.
(b)A person carrying on a business which consists of or includes the management of trusts, and acting as trustees of a trust in the course of that business, shall be treated in relation to that trust as not resident in the State if the whole of the settled property consists of or derives from property provided by a person not at the time (or, in the case of a trust arising under a testamentary disposition or on an intestacy or partial intestacy, at his or her death) domiciled, resident or ordinarily resident in the State and, if in such a case the trustees or a majority of them are or are treated in relation to that trust as not resident in the State, the general administration of the trust shall be treated as ordinarily carried on outside the State.
(2)Where any amount of capital gains tax assessed on the trustees or any one trustee of a settlement in respect of a chargeable gain accruing to the trustee is not paid within 6 months from the date when it becomes payable by the trustees or trustee and, before or after the expiration of that period of 6 months, the asset in respect of which the chargeable gain accrued, or any part of the proceeds of sale of that asset, is transferred by the trustees to a person who as against the trustees is absolutely entitled to it, then, that person may, at any time within 2 years from the time when that amount of tax became payable, be assessed and charged (in the name of the trustees) to an amount of capital gains tax not exceeding the amount of capital gains tax chargeable on an amount equal to the amount of the chargeable gain and, where part only of the asset or of the proceeds was transferred, not exceeding a proportionate part of that amount.
(3)For the purposes of this section, where part of the property comprised in a settlement is vested in one trustee or set of trustees and part in another trustee or set of trustees, they shall be treated as together constituting and, in so far as they act separately, as acting on behalf of a single body of trustees.
575.
Gifts in settlement.
A gift in settlement, whether revocable or irrevocable, shall be a disposal of the entire property thereby becoming settled property notwithstanding that the donor has some interest as a beneficiary under the settlement and notwithstanding that the donor is a trustee or the sole trustee of the settlement.
576.
Person becoming absolutely entitled to settled property.
(1)On the occasion when a person becomes absolutely entitled to any settled property as against the trustee, all the assets forming part of the settled property to which the person becomes so entitled shall be deemed for the purposes of the Capital Gains Tax Acts to have been disposed of by the trustee, and immediately reacquired by the trustee in the trustee’s capacity as a trustee within section 567(2), for a consideration equal to their market value.
(2)On the occasion when a person becomes absolutely entitled to any settled property as against the trustee, any allowable loss which has accrued to the trustee in respect of property which is, or is represented by, the property to which that person becomes so entitled (including any allowable loss carried forward to the year of assessment in which that occasion falls), being a loss which cannot be deducted from chargeable gains accruing to the trustee in that year, but before that occasion, shall be treated for the purposes of the Capital Gains Tax Acts as if it were an allowable loss accruing at that time to the person becoming so entitled, instead of to the trustee.
577.
Termination of life interest on death of person entitled.
(1)
(a)In this section, “life interest”, in relation to a settlement –
(i)includes a right under the settlement to the income of, or the use or occupation of, settled property for the life of a person (or for the lives of persons) other than the person entitled to the right,
(ii)does not include any right which is contingent on the exercise of the discretion of the trustee or the discretion of some other person, and
(iii)does not include an annuity, notwithstanding that the annuity is payable out of or charged on settled property or the income of settled property except where some or all of the settled property is appropriated by the trustees as a fund out of which the annuity is payable and there is no right of recourse to settled property not so appropriated, or to the income of settled property not so appropriated.
(b)Without prejudice to subsection (4)(b), where under paragraph (a) (iii) an annuity is to be treated as a life interest in relation to a settlement, the settled property or the part of the settled property appropriated by the trustees as a fund out of which the annuity is payable shall, while the annuity is payable and on the occasion of the death of the annuitant, be treated for the purposes of subsection (3) as being settled property under a separate settlement.
(2)Where by virtue of section 576(1) the assets forming part of any settled property are deemed to be disposed of and reacquired by the trustee on the occasion when a person becomes absolutely entitled to the assets as against the trustee, then, if that occasion is the termination of a life interest by the death of the person entitled to that interest –
(a)no chargeable gain shall accrue on the disposal, and
(b)the reacquisition under that section shall be deemed to be for a consideration equal to the market value of the assets at the date of the death.
(3)On the termination of a life interest in possession in all or any part of settled property, the whole or a corresponding part of each of the assets forming part of the settled property and not ceasing at that time to be settled property shall be deemed for the purposes of the Capital Gains Tax Acts at that time to be disposed of by the trustee, and immediately reacquired by the trustee, for a consideration equal to the whole or a corresponding part of the market value of the asset.
(4)For the purposes of subsection (3) –
(a)a life interest which is a right to part of the income of settled property shall be treated as a life interest in a corresponding part of the settled property, and
(b)if there is a life interest in a part of the settled property and, where that interest is a life interest in income, there is no right of recourse to, or to the income of, the remainder of the settled property, the part of the settled property in which the life interest subsists shall while it subsists be treated for the purposes of this subsection as being settled property under a separate settlement.
(5)
(a)Subject to paragraph (b), where –
(i)as a consequence of a termination, on the death of the person entitled to it, of a life interest in settled property, subsection (3) applies, and
(ii)an asset which forms the whole or any part of that settled property –
(I)is comprised in an inheritance (within the meaning of the Capital Acquisitions Tax Act 2003) taken on the death, and
(II)is exempt from tax in relation to the inheritance under section 77 of that Act, or that section as applied by section 77(6) and (7) of the Capital Acquisitions Tax Consolidation Act 2003,
that asset shall for the purposes of subsection (3), be excluded from the assets deemed to be disposed of and immediately reacquired.
(b)Where, in a year of assessment, in respect of an asset an exemption from tax in relation to an inheritance referred to in paragraph (a) ceases to apply, then, the chargeable gain which but for paragraph (a) would have accrued to the trustee on the termination of the life interest in accordance with subsection (3) shall be deemed to accrue to the trustee in that year of assessment and shall accordingly be included in the return required to be made by the trustee concerned under Chapter 3 of Part 41A for that year of assessment.
577A.
Relinquishing of a life interest by the person entitled.
Where by virtue of section 576(1) the assets forming Part of any settled property are deemed to be disposed of and immediately reacquired by the trustee on the occasion when a person becomes absolutely entitled to the assets as against the trustee, then, in case that occasion is the relinquishing of a life interest (within the meaning of section 577) by the person entitled to that interest, the trustee shall be given such relief as would be given under sections 598 and 599 to the person who relinquished the life interest –
(a)if the person had become absolutely entitled to the assets as against the trustee at the commencement of the life interest and had continued to be so entitled throughout the period (in this section referred to as the ‘life interest period’) that the life interest subsisted, and
(b)as if any expenditure of the kind referred to in paragraph (b) of section 552(1) that was incurred on the assets during the life interest period by the trustee had been incurred by the person.
578.
Death of annuitant.
Sections 576(1) and 577(3) shall apply where an annuity which is not a life interest within the meaning of section 577 is terminated by the death of the annuitant as they apply on the termination of a life interest (within the meaning of that section) by the death of the person entitled to that life interest.
579.
Non-resident trusts.
(1)This section shall apply as respects chargeable gains accruing to the trustees of a settlement where the trustees are not resident and not ordinarily resident in the State, and where the settlor or one of the settlors is either resident or ordinarily resident in the State, or was either resident or ordinarily resident in the State when such settlor made the settlement.
(2)
(a)Any beneficiary under the settlement who is domiciled and either resident or ordinarily resident in the State in any year of assessment shall be treated for the purposes of the Capital Gains Tax Acts as if an apportioned part of the amount, if any, on which the trustees would have been chargeable to capital gains tax under section 31, if domiciled and either resident or ordinarily resident in the State in that year of assessment, had been chargeable gains accruing to the beneficiary in that year of assessment.
(b)Notwithstanding paragraph (a), where a beneficiary under the settlement was neither resident nor ordinarily resident in the State in a year of assessment during which a gain accrued to the trustees, but was so resident or ordinarily resident in an earlier and subsequent year of assessment, the gain which would have accrued to that beneficiary if paragraph (a) had applied shall be treated as accruing in the first year of assessment in which he or she subsequently becomes resident or ordinarily resident in the State.
(c)Notwithstanding paragraph (a), where a person was excluded as a beneficiary under the settlement for a period of time but was subsequently included as a beneficiary of that settlement and a gain accrued to the trustees during a year of assessment when that beneficiary was so excluded, a gain which would have accrued to the beneficiary if paragraph (a) had applied shall be treated as accruing in the first year of assessment in which that person was subsequently included as a beneficiary of the settlement concerned.
(d)Notwithstanding paragraph (a), if a beneficiary is not treated under the provisions of paragraph (a), (b) or (c) as if any apportioned part of a gain accrued to him or her in a year of assessment and –
(i)the trustees have earlier realised a chargeable gain, and
(ii)the beneficiary receives a capital payment (within the meaning of section 579A(1)) from the trust during a year of assessment in which he or she is either resident or ordinarily resident in the State,
then, the beneficiary shall be treated as if an amount equal to –
(I)the capital payment, or
(II)the apportioned gain which would have accrued to him or her if paragraphs (a), (b) or (c) had applied,
whichever is less, were a chargeable gain accruing to him or her in the year of assessment in which the capital payment is received.
(e)For the purposes of this section, any amount referred to in paragraph (a), (b) or (c) shall be apportioned in such manner as is just and reasonable between persons having interests in the settled property, whether the interest is a life interest or an interest in reversion, and so that the chargeable gain is apportioned as near as may be according to the respective values of those interests, disregarding in the case of a defeasible interest the possibility of defeasance.
(3)For the purposes of this section –
(a)where in any of the 5 years ending with that in which the chargeable gain accrues a person has received a payment or payments out of the income of the settled property made in exercise of a discretion, such person shall be regarded, in relation to that chargeable gain, as having an interest in the settled property of a value equal to that of an annuity of a yearly amount equal to 20 per cent of the total of the payments so received by such person in those 5 years, and
(b)[deleted]
(4)In the case of a settlement made before the 28th day of February, 1974 –
(a)subsection (2) shall not apply to a beneficiary whose interest is solely in the income of the settled property and who cannot, by means of the exercise of any power of appointment or power of revocation or otherwise, obtain for himself or herself, whether with or without the consent of any other person, any part of the capital represented by the settled property, and
(b)payment of capital gains tax chargeable on a gain apportioned to a beneficiary in respect of an interest in reversion in any part of the capital represented by the settled property may be postponed until that person becomes absolutely entitled to that part of the settled property, or disposes of the whole or any part of his or her interest, unless he or she can, by any means described in paragraph (a), obtain for himself or herself any of it at any earlier time,
and, for the purposes of this subsection, property added to a settlement after the settlement is made shall be regarded as property under a separate settlement made at the time when the property is so added.
(5)In any case in which the amount of any capital gains tax payable by a beneficiary under a settlement in accordance with this section is paid by the trustees of the settlement, such amount shall not for the purposes of income tax or capital gains tax be regarded as a payment to such beneficiary.
(6)This section shall not apply –
(a)in relation to a loss accruing to the trustees of the settlement, or
(b)where it is shown in writing or otherwise to the satisfaction of the Revenue Commissioners that, at the time when the charge to capital gains tax arises, genuine economic activities are carried on by the settlement in a relevant Member State (within the meaning of section 806(11)(a)).
579A.
Attribution of gains to beneficiaries.
(1)
(a)For the purposes of this section and the following sections of this Chapter, ‘capital payments’ means any payment which is not chargeable to income tax on the recipient or, in the case of a recipient who is neither resident nor ordinarily resident in the State, any payment received otherwise than as income, but does not include a payment under a transaction entered into at arm’s length.
(b)In paragraph (a) references to a payment include references to the transfer of an asset and the conferring of any benefit, and to any occasion on which settled property becomes property to which section 567(2) applies.
(c)The amount of a capital payment made by way of loan, and of any other capital payment which is not an outright payment of money, shall be taken to be equal to the value of the benefit conferred by it.
(d)A capital payment shall be treated as received by a beneficiary from the trustees of a settlement if –
(i)the beneficiary receives it from the trustees directly or indirectly,
(ii)it is directly or indirectly applied by the trustees in payment of any debt of the beneficiary or is otherwise paid for the benefit of the beneficiary, or
(iii)it is received by a third party at the beneficiary’s direction.
(2)
(a)This section shall apply to a settlement for any year of assessment (beginning on or after 6 April 1999) during which the trustees are at no time resident or ordinarily resident in the State, and –
(i)the settlor does not have an interest in the settlement at any time in that year of assessment, or
(ii)the settlor does have an interest in the settlement but –
(I)was not domiciled in the State, and
(II)was neither resident nor ordinarily resident in the State,
in that year of assessment, or when the settlor made the settlement.
(b)Section 579 shall not apply as respects chargeable gains accruing after 5 April 1999 to trustees of a settlement to which this section applies; and references in subsections (4) and (5) to capital payments received by beneficiaries do not include references to any payments received before 11 February 1999 or any payments received on or after that date so far as they represent a chargeable gain which accrued to the trustees in respect of a disposal by the trustees before 11 February 1999.
(c)For the purposes of this subsection a settlor has an interest in a settlement if –
(i)any relevant property which is, or may at any time become, comprised in the settlement is, or will or may become, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary,
(ii)any relevant income which arises, or may arise, under the settlement is, or will or may become, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary, or
(iii)a relevant beneficiary enjoys a benefit directly or indirectly from any relevant property which is comprised in the settlement or any relevant income arising under the settlement.
(d)In this subsection –
‘relevant beneficiary’ means –
(i)the settlor,
(ii)the spouse or civil partner of the settlor,
(iii)a company controlled by either or both the settlor and the spouse of the settlor, or
(iv)a company associated with a company referred to in paragraph (iii) of this definition;
‘relevant income’ means income originating from the settlor;
‘relevant property’ means property originating from the settlor.
(e)For the purposes of this subsection –
(i)references to property originating from a person are references to property provided by that person, and property representing that property,
(ii)references to income originating from a person are references to income from property originating from that person and income provided by that person,
(iii)whether a company is controlled by a person or persons shall be construed in accordance with section 432 without regard to subsection (6) of that section,
(iv)whether a company is associated with another company shall be construed in accordance with section 432 without regard to subsection (6) of that section, and
(v)references to relevant property comprised in a settlement being, or becoming, applicable for the benefit of or payable in any circumstances to, a relevant beneficiary, do not include references to the repayment of, or obligation to repay, a loan to a settlor which loan was provided by the settlor to the trustees of the settlement on terms that it would be repaid.
(f)Where, for the year of assessment 2002 or any subsequent year of assessment, chargeable gains are treated as accruing to a beneficiary under a settlement by virtue of section 579, then notwithstanding that section such chargeable gains, in so far as they are in respect of a disposal made on or after 7 March 2002 by the trustees of the settlement, shall be treated as accruing to the settlor in relation to the settlement and not to any other person, if the settlor is resident or ordinarily resident in the State, whether or not the settlor is the beneficiary.
(3)There shall be computed in respect of every year of assessment for which this section applies the amount on which the trustees would have been chargeable to capital gains tax under section 31 if they had been resident and ordinarily resident in the State in the year of assessment and that amount, together with the corresponding amount in respect of any earlier such year of assessment, so far as not already treated under subsection (4) or section 579F(2) as chargeable gains accruing to beneficiaries under the settlement, is in this section referred to as ‘the trust gains for the year of assessment’.
(4)Subject to this section, the trust gains for a year of assessment shall be treated for the purposes of the Capital Gains Tax Acts as chargeable gains accruing in the year of assessment to beneficiaries of the settlement who receive capital payments from the trustees in the year of assessment or have received such payments in any earlier year of assessment.
(5)The attribution of chargeable gains to beneficiaries under subsection (4) shall be made in proportion to, but shall not exceed, the amounts of capital payments received by them.
(6)A capital payment shall be left out of account for the purposes of subsections (4) and (5) to the extent that chargeable gains have, by reason of the payment, been treated as accruing to the recipient in an earlier year of assessment.
(7)A beneficiary shall not be charged to tax on chargeable gains treated by virtue of subsection (4) as accruing to him or her in any year of assessment unless he or she is domiciled in the State at some time in that year of assessment.
(8)For the purposes of this section a settlement arising under a will or intestacy shall be treated as made by the testator or, as the case may be, intestate at the time of death.
(9)In any case in which the amount of any capital gains tax payable by a beneficiary under a settlement in accordance with this section is paid by the trustees of the settlement, such amount shall not for the purposes of income tax or capital gains tax be regarded as a payment to the beneficiary.
(9A)This section shall not apply where it is shown in writing or otherwise to the satisfaction of the Revenue Commissioners that, at the time when the charge to capital gains tax arises, genuine economic activities are carried on by the settlement in a relevant Member State (within the meaning of section 806(11)(a)).
(10)[deleted]
(11)[deleted]
579B.
Trustees ceasing to be resident in the State.
(1)In this section and in the following sections of this Chapter –
‘arrangements’ means arrangements having the force of law by virtue of section 826(1) (as extended to capital gains tax by section 828);
‘the new assets’ and ‘the old assets’ have the meaning assigned, respectively, to them by section 597(4).
(2)This section shall apply where the trustees of a settlement become at any time (hereafter in this section referred to as the ‘relevant time’) neither resident nor ordinarily resident in the State.
(3)The trustees to whom this section applies shall, for the purposes of the Capital Gains Tax Acts, be deemed –
(a)to have disposed of the defined assets immediately before the relevant time, and
(b)immediately to have reacquired them,
at their market value at that time.
(4)Subject to subsections (5) and (6), the defined assets are all assets constituting settled property of the settlement immediately before the relevant time.
(5)If immediately after the relevant time –
(a)the trustees carry on a trade in the State through a branch or agency, and
(b)any assets are situated in the State and either used in or for the purposes of the trade or used or held for the purposes of the branch or agency,
the assets falling within paragraph (b) shall not be defined assets.
(6)Assets shall not be defined assets if –
(a)they are of a description specified in any arrangements, and
(b)the trustees would, were they to dispose of them immediately before the relevant time, fall to be regarded for the purposes of the arrangements as not being liable in the State to tax on gains accruing to them on the disposal.
(7)Notwithstanding anything in that section –
(a)section 597 shall not apply where the trustees –
(i)have disposed of the old assets, or their interest in them, before the relevant time, and
(ii)acquire the new assets, or their interest in them, after the relevant time, and
(b)where under section 597 a chargeable gain accruing on a disposal of old assets is treated as not accruing until a time later (being the time that the new assets cease to be used for the purposes of a trade or other purposes as referred to in subsection (2) of that section) than the time of the disposal, and, but for this subsection, the later time would fall after the relevant time, the chargeable gain shall be treated as accruing immediately before the relevant time,
unless the new assets are excepted from the application of this subsection by subsection (8).
(8)If at the time when the new assets are acquired –
(a)the trustees carry on a trade in the State through a branch or agency, and
(b)any new assets, which immediately after the relevant time, are situated in the State and either used in or for the purposes of the trade or used or held for the purposes of the branch or agency,
the assets falling within paragraph (b) shall be excepted from the application of subsection (7).
(9)The trustees to whom this section applies may elect to pay capital gains tax in 6 equal instalments at yearly intervals, the first instalment of which shall be due and payable on 31 October in the year following the year in which there is deemed to have occurred, by virtue of subsection (3), the disposal and reacquisition by them of the defined assets, and the remaining instalments shall be due and payable respectively on 31 October in each of the years following the year in which the first instalment became due and payable.
579C.
Death of trustee: special rules.
(1)Subsection (2) applies where –
(a)section 579B applies as a result of the death of a trustee of a settlement, and
(b)within the period of 6 months beginning with the death, the trustees of the settlement become resident and ordinarily resident in the State.
(2)Section 579B shall apply as if the defined assets were restricted to such assets (if any) as –
(a)would be defined assets apart from this section, and
(b)fall within subsection (3).
(3)Assets fall within this subsection if they were disposed of by the trustees in the period which –
(a)begins with the death, and
(b)ends when the trustees become resident and ordinarily resident in the State.
(4)Where –
(a)at any time the trustees of a settlement become resident and ordinarily resident in the State as a result of the death of a trustee of the settlement, and
(b)section 579B applies as regards the trustees of the settlement in circumstances where the relevant time (within the meaning of that section) falls within the period of 6 months beginning with the death,
that section shall apply as if the defined assets were restricted to such assets (if any) –
(i)as would be defined assets but for this section, and
(ii)which the trustees acquired in the period beginning with the death and ending with the relevant time.
579D.
Past trustees: liability for tax.
(1)In this section ‘specified period’, in relation to a year of assessment, means the period beginning with the specified return date for the year of assessment (within the meaning of section 959A) and ending 3 years after the time when a return under Chapter 3 of Part 41A for the chargeable period is delivered to the Collector-General.
(2)For the purposes of this section –
(a)where the relevant time (within the meaning of section 579B) falls within the period of 12 months beginning with the 11th day of February, 1999, the relevant period is the period beginning with that day and ending with the relevant time, and
(b)in any other case, the relevant period is the period of 12 months ending with the relevant time.
(3)This section shall apply at any time on or after the 11th day of February, 1999, where –
(a)section 579B applies as regards the trustees (in this section referred to as ‘migrating trustees’) of a settlement, and
(b)any tax, which is payable by the migrating trustees in respect of a chargeable gain accruing to them for a year of assessment (in this section referred to as ‘the year of assessment concerned’) by virtue of section 579B(3), is not paid within 6 months after the date on or before which the tax is due and payable.
(4)The Revenue Commissioners may, at any time before the end of the specified period in relation to the year of assessment concerned, serve on any person to whom subsection (5) applies, a notice –
(a)stating the amount which remains unpaid of the tax payable by the migrating trustees for the year of assessment concerned, and
(b)requiring that person to pay that amount within 30 days of the service of the notice.
(5)This subsection applies to any person who, at any time within the relevant period, was a trustee of the settlement, other than such a person who –
(a)ceased to be a trustee of the settlement before the end of the relevant period, and
(b)shows that, when he or she (or in the case of a company, the company) ceased to be a trustee of the settlement, there was no proposal that the trustees might become neither resident nor ordinarily resident in the State.
(6)Any amount which a person is required to pay by a notice under this section –
(a)may be recovered by that person from the migrating trustees,
(b)shall not be allowed as a deduction in computing income, profits, gains or losses for any tax purposes, and
(c)may be recovered from that person as if it were tax due by such person.
579E.
Trustees ceasing to be liable to Irish tax.
(1)This section shall apply where the trustees of a settlement, while continuing to be resident and ordinarily resident in the State, become at any time (in this section referred to as ‘the time concerned’) on or after the 11th day of February, 1999, trustees who fall to be regarded for the purposes of any arrangements –
(a)as resident in a territory outside the State, and
(b)as not liable in the State to tax on gains accruing on disposals of assets (in this section referred to as ‘relevant assets’) which constitute settled property of the settlement and fall within descriptions specified in the arrangements.
(2)The trustees shall be deemed for all the purposes of the Capital Gains Tax Acts –
(a)to have disposed of their relevant assets immediately before the time concerned, and
(b)immediately to have reacquired them,
at their market value at that time.
(3)Notwithstanding anything in that section –
(a)section 597 shall not apply where –
(i)the new assets are, or an interest in them is, acquired by the trustees of a settlement,
(ii)at the time of the acquisition the trustees are resident and ordinarily resident in the State and fall to be regarded for the purposes of any arrangements as resident in a territory outside the State,
(iii)the assets are of a description specified in those arrangements, and
(iv)the trustees would, were they to dispose of the assets immediately after the acquisition, fall to be regarded for the purposes of the arrangements as not being liable in the State to tax on gains accruing to them on the disposal,
and
(b)where under section 597 a chargeable gain accruing on a disposal of the old assets is treated as not accruing until a time later (being the time that the new assets cease to be used for the purposes of a trade or other purposes as set out in subsection (2) of that section) than the time of the disposal, and but for this paragraph, the latter time would fall after the time concerned, the chargeable gain shall be treated as accruing immediately before the time concerned, if –
(i)the new assets are of a description specified in any arrangements, and
(ii)the trustees would, were they to dispose of the new assets immediately after the time concerned, fall to be regarded for the purposes of those arrangements as not being liable in the State to tax on gains accruing to them on the disposal.
579F.
Migrant settlements.
(1)Where a period (in this section referred to as ‘a non-resident period’) of one or more years of assessment for which section 579A applies to a settlement, succeeds a period (in this section referred to as ‘a resident period’) of one or more years of assessment for each of which section 579A does not apply to the settlement, a capital payment received by a beneficiary in the resident period shall be disregarded for the purposes of section 579A if it was not made in anticipation of a disposal made by the trustees in the non-resident period.
(2)Where –
(a)a non-resident period is succeeded by a resident period, and
(b)the trust gains for the last year of assessment of the non-resident period are not, or not wholly, treated as chargeable gains accruing to beneficiaries, then, subject to subsection (3), those trust gains, or the outstanding part of them, shall be treated as chargeable gains accruing in the first year of assessment of the resident period, to beneficiaries of the settlement who receive capital payments from the trustees in that year of assessment, and so on for the second and subsequent years until the amount treated as accruing to the beneficiaries is equal to the amount of the trust gains for the last year of assessment of the non-resident period.
(3)Subsections (5) and (7) of section 579A shall apply in relation to subsection (2) as they apply in relation to subsection (4) of that section.
613.
Miscellaneous exemptions for certain kinds of property.
(1)The following shall not be chargeable gains –
(a)any bonus payable under an instalment saving scheme within the meaning of section 53 of the Finance Act, 1970;
(b)any prize under section 22 of the Finance (Miscellaneous Provisions) Act, 1956;
(c)any sum obtained by means of compensation or damages for any wrong or injury suffered by an individual in his or her person or in his or her profession;
(ca)any sum obtained by means of compensation under the 2017 Voluntary Homeowners Relocation Scheme administered by the Commissioners of Public Works in Ireland under section 2 of the Commissioners of Public Works (Functions and Powers) Act 1996;
(d)any payment to which section 205A applies.
(2)Winnings from betting (including pool betting), lotteries, sweepstakes or games with prizes shall not be chargeable gains, and rights to winnings obtained by participating in any pool betting, lottery, sweepstake or game with prizes shall not be chargeable assets.
(3)No chargeable gain shall accrue on the disposal of a right to or to any part of –
(a)any allowance, annuity or capital sum payable out of any superannuation fund, or under any superannuation scheme, established solely or mainly for persons employed in a profession, trade, undertaking or employment, and their dependants,
(b)an annuity granted otherwise than under a contract for a deferred annuity by a company as part of its business of granting annuities on human life, whether or not including instalments of capital, or
(c)annual payments due under a covenant made by any person and not secured on any property.
(4)
(a)Subject to subsection (5), no chargeable gain shall accrue on the disposal of an interest created by or arising under a settlement (including in particular an annuity or life interest and the reversion to an annuity or life interest) –
(i)by the person for whose benefit the interest was created by the terms of the settlement, or
(ii)by any other person except one who acquired, or derives that person’s title from one who acquired, the interest for a consideration in money or money’s worth, other than consideration consisting of another interest under the settlement.
(b)Subject to paragraph (a), where a person who has acquired an interest in settled property (including in particular the reversion to an annuity or life interest) becomes as the holder of that interest absolutely entitled as against the trustee to any settled property, the person shall be treated as disposing of the interest in consideration of obtaining that settled property, but without prejudice to any gain accruing to the trustee on the disposal of that property deemed to be effected by the trustee under section 576(1).
(5)Subsection (4)(a) shall not apply –
(a)to the disposal of an interest in settled property, other than such a disposal treated under subsection (4)(b) as made in consideration of obtaining the settled property, if at the time of the disposal the trustees are neither resident nor ordinarily resident in the State,
(b)if the settlement falls within subsection (6), or
(c)the property comprised in the settlement is or includes property that is derived directly or indirectly from a settlement falling within subsection (6).
(6)
(a)In this subsection ‘arrangements’ means arrangements having the force of law by virtue of section 826(1) (as extended to capital gains tax by section 828).
(b)A settlement falls within this subsection if there has been a time when the trustees of the settlement –
(i)were neither resident nor ordinarily resident in the State, or
(ii)fell to be regarded for the purposes of any arrangements as resident in a territory outside the State.
(7)
(a)No chargeable gain shall arise on the receipt of an amount of compensation in money or money’s worth under the Cessation of Turf Cutting Compensation Scheme or the Protected Raised Bog Restoration Incentive Scheme administered by the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs, relating to –
(i)a European Site (within the meaning of Regulation 2 of the European Communities (Birds and Natural Habitats) Regulations 2011 (S.I. No. 477 of 2011)) that contains raised bog,
(ii)a Natural Heritage Area (within the meaning of section 2 of the Wildlife Act 1976 (No. 39 of 1976)) that contains raised bog, or
(iii)any other lands which, in the opinion of the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs, are necessary to achieve the restoration of a European Site or Natural Heritage Area, referred to in subparagraph (i) or (ii).
(aa)No chargeable gain shall arise on a disposal of land (including a right of turbary) to the Minister referred to in paragraph (a) where that land has been acquired by that Minister for the purposes of granting a right of turbary to an individual who –
(i)is entitled to compensation under the scheme referred to in paragraph (a), and
(ii)enters into an agreement with that Minister in respect of that land (or any estate, right or interest in or over that land).
(b)Any amount paid under the Protected Raised Bog Restoration Incentive Scheme for the voluntary purchase of land or under a management agreement within the meaning of Regulation 2 of the European Communities (Birds and Natural Habitats) Regulations 2011 shall be deemed to be an amount of compensation for the purposes of paragraph (a).
613A. Supplementary provisions.
(1)Subject to this section, subsection (2) shall apply where –
(a)section 579B applies as regards the trustees of a settlement,
(b)after the relevant time (within the meaning of that section) a person disposes of an interest created by or arising under the settlement and the circumstances are such that subsection (4)(a) of section 613 does not apply by virtue of subsection (5)(a) of that section, and
(c)the interest was created for the benefit of the person making the disposal or that person otherwise acquired it, before the relevant time.
(2)For the purposes of calculating any chargeable gain accruing on the disposal of the interest, the person disposing of it shall be treated as having –
(a)disposed of it immediately before the relevant time, and
(b)immediately reacquired it,
at its market value at that time.
(3)Subsection (2) shall not apply if section 579E applied as regards the trustees in circumstances where the time concerned (within the meaning of that section) fell before the time when the interest was created for the benefit of the person disposing of it or when the person otherwise acquired it.
(4)Subsection (6) applies where –
(a)section 579B applies as regards the trustees of a settlement,
(b)after the relevant time (within the meaning of that section) a person disposes of an interest created by or arising under the settlement and the circumstances are such that subsection (4)(a) of section 613 does not apply by virtue of subsection (5)(a) of that section,
(c)the interest was created for the person’s benefit, or the person otherwise acquired it, before the relevant time, and
(d)section 579E applied as regards the trustees in circumstances where the time concerned (within the meaning of that section) fell in the relevant period.
(5)The relevant period is the period which –
(a)begins when the interest was created for the benefit of the person disposing of it or when the person otherwise acquired it, and
(b)ends with the relevant time.
(6)For the purposes of calculating any chargeable gain accruing on the disposal of the interest, the person disposing of it shall be treated as having –
(a)disposed of it immediately before the time determined in accordance with subsection (7), and
(b)immediately reacquired it,
at its market value at that time.
(7)The time mentioned in subsection (6) is –
(a)where there is only one such time, the time concerned, or
(b)where there is more than one time concerned, because section 579E applied more than once, the earliest time concerned.
(8)Where subsection (2) applies, subsection (6) shall not apply.