Early Twentieth Century
A range of taxes on land were commenced in the famous 1910 budget. Many of them were repealed in 1920. They included incremental value duty, undeveloped land duty reversion duty and mineral rights duty.
- Incremental value duty was to represent on the increase of the site value after 1909 payable when land was transferred on sale or death.
- Reversion duty was a 10% duty applying to a lessor at the end of the lease by reason of the end of the lease.
- Undeveloped land tax was on annual tax of one-half pence in the pound on the site value of undeveloped land.
- Mineral rights duty was an annual duty of one shilling in the pound on the rental value of the right work minerals.
There are three principal death duties up to 1975. Estate duty applied under the Finance Act 1894 and was the principal tax. It produced 90% of the revenue. It was a duty on property passing on death of the total estate. I
t included all movable property or immovable property situated in the State regardless of domicile. Properties abroad was taxed that the deceased died domiciled in the state.
The rates were prescribed based on the value of the estate. In 1973 there was an exemption of £10,000 with graduated rates up to 55% applicable above £200,000. 50% above £150,000, 45 percent above £100,000,41 percent above £80,000,including 18% above £30,000, 14 percent £20,000, 10 percent above £15,000, and 4% above £10,000
Position in 1941
Succession & Legacy Duty
in addition to estate duty legacy duty and succession duty applied. The applied on the basis of acquisition of asset by beneficiaries. All movable property worldwide passing under the will and testament the person domiciled in the State attracted legacy duty.
Settled movable property not liable to legacy duty was subject to succession duty where the settlement was governed by the laws of the State All the movable property in the State was subject to succession duty regardless of the domicile of the settlor or testator. The rates depended on the relationship.
In 1974 the government produced a White Paper on Capital Taxation. It highlighted some of the obvious difficulties with estate duty. It did not apply to gifts, provided the donor survived by five years.
The White Paper proposed a capital acquisitions tax to apply to gifts and inheritances. The Capital Acquisitions Tax Act 1976 implemented the proposal.
The tax applied to the recipient, being an acquisition tax. The tax-free threshold was based on the relationship with the donor or the persons who had provided the asset originally.
The rate on gifts was at 75% of the rate on inheritances. The threshold for relation for benefits gifts inheritances from
- family members was £150,000
- The rate for lineal ancestors and descendants was £20,000.
- The rate for others was £10,000.
Initially the tax rate increased from 25% for the first £50,000 above the threshold, increasing cumulatively with each £50,000 by 5% so that over £400,000 the rate s tax 50%.
The highest rate increased to 55% in 1984 and it applied until 1994. The allowances were graduated. From 1994 the rates were nil on the threshold amount 20% in the next £10,000.30 percent in the next £30,000 and 40 percent of the balance.
The thresholds were increased gradually from 1989 taking account of inflation. By 1994 irrespective thresholds £174,000 £23,200 and £11,600.
Capital gains tax
The White Paper on capital taxation recommend the introduction of a capital gains tax. Capital gains tax had been introduced in 1965 in the United Kingdom. It addressed the anomaly that income is taxable the capital gains were untaxed.
This was perceived to be doubly inequitable as capital gains were more likely to be made by persons who had considerable wealth. The initial rate of capital gains tax was 26%
Wealth Tax 1975-77
The White Paper proposed an annual Wealth tax on persons domiciled and ordinarily resident in the State on their worldwide property. There was an exemption for the dwelling house and garden up to acre. The property of a spouse and children were included.
The threshold levels applicable to individuals £100,000 married £90,000 widowed £70,000 single person with an allowance of £2,500 per child.
The tax applied at a rate of 1% on the net market value of taxpayer’s chargeable wealth for the years commencing 5 April 1975. The combined income tax and wealth tax of a person domiciled and resident in the state was not to exceed 80% of his total income
The tax was abolished in 1977 on change of government.