First Previous (PART V Residential Property Tax) Next (PART VII Miscellaneous Pre-Consolidation Provisions)

22 1997

FINANCE ACT, 1997

PART VI

Capital Acquisitions Tax

Interpretation (part VI).

133. —In this Part “the Principal Act” means the Capital Acquisitions Tax Act, 1976 .

Amendment of section 19 (value of agricultural property) of Principal Act.

134. —(1) Section 19 of the Principal Act is hereby amended—

(a) by the substitution of the following definition for the definition of “agricultural value” in subsection (1) (inserted by the Finance Act, 1996):

“‘agricultural value’ means the market value of agricultural property reduced by 90 per cent. of that value;”,

(b) in paragraph (II) of the proviso (inserted by the Finance Act, 1996) to paragraph (a) (inserted by the Finance Act, 1994 ) of subsection (5), by the insertion of “or section 134 of the Finance Act, 1997,” after “Finance Act, 1996,”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 23rd day of January, 1997.

Amendment of section 57 (exemption of certain securities) of Principal Act.

135. —(1) Subsection (3) of section 57 of the Principal Act is hereby amended by the substitution of “disposition” for “disposition, or at the date of the gift or the date of the inheritance”.

(2) This section shall have effect in relation to securities or units comprised in a gift or an inheritance where the date of the gift or the date of the inheritance is on or after the 26th day of March, 1997, and the securities or units come into the beneficial ownership of the disponer on or after the 26th day of March, 1997, or become subject to the disposition on or after that date without having been previously in the beneficial ownership of the disponer.

Second Schedule (computation of tax) to Principal Act, declaratory provision.

136. —(1) For the avoidance of doubt it is hereby declared that paragraph 3 (inserted by the Finance Act, 1984 ) of the Second Schedule to the Principal Act shall have effect and be deemed always to have had effect as if the following paragraph were substituted therefor:

“3. Subject to the provisions of paragraph 6, the tax chargeable on the taxable value of a taxable gift or a taxable inheritance taken by a donee or successor shall be of an amount equal to the amount by which the tax computed on aggregate A exceeds the tax computed on aggregate B, where—

(a) aggregate A is the aggregate of the following:

(i) the said taxable value, and

(ii) the taxable value of each and every taxable gift and taxable inheritance taken previously by the said donee or successor on or after the 2nd day of June, 1982,

(b) aggregate B is the aggregate of the taxable values of all taxable gifts and taxable inheritances so previously taken, and

(c) the tax on an aggregate is computed at the rate or rates of tax applicable under the Table to that aggregate:

Provided that—

(i) in a case where no taxable gift or taxable inheritance was so previously taken, the amount of the tax computed on aggregate B shall be deemed to be nil,

(ii) in every other case, the amount of the tax chargeable shall not exceed the amount which would be chargeable if the threshold amount which applies to aggregate A were deemed, irrespective of the definition of ‘threshold amount’, to be also the threshold amount which applies to aggregate B, and

(iii) the amount of an aggregate that comprises only a single taxable value shall be equal to that value.”.

(2) Subsection (1) shall not apply to a gift or inheritance in relation to which paragraph 3 of the Second Schedule to the Principal Act was the subject of a determination of the Appeal Commissioners, being a determination made before the 1st day of May, 1997, under section 52 of the Principal Act.

Amendment of section 39 (extension of section 55 (exemption of certain objects) of Capital Acquisitions Tax Act, 1976 ) of Finance Act, 1978 .

137. —(1) Section 39 of the Finance Act, 1978 , is hereby amended by the insertion of the following subsection after subsection (1):

“(1A) Without prejudice to the generality of subsection (1), the provision of facilities for the viewing by members of the public of a house or garden shall not be regarded as reasonable in relation to any year, which is the year 1997 or any subsequent year and which is taken into account for the purposes of paragraphs (b) and (c) of subsection (1), unless—

(a) Bord Fáilte Éireann (hereinafter in this section referred to as ‘the Board’) has, as regards the year 1997, on or before the 1st day of July, 1997, and, as regards any subsequent year, on or before the 1st day of January in that year, been provided with particulars of—

(i) the name, if any, and address of the house or garden, and

(ii) the days and times during the year when access to the house or garden is afforded to the public and the price, if any, payable for such access, and

(b) in the opinion of the Commissioners—

(i) subject to such temporary closure necessary for the purpose of the repair, maintenance or restoration of the house or garden as is reasonable, access to the house or garden is afforded for not less than 60 days (including not less than 40 days during the period commencing on the 1st day of May and ending on the 30th day of September) in that year;

(ii) on each day on which access to the house or garden is afforded, the access is afforded in a reasonable manner and at reasonable times for a period, or periods in the aggregate, of not less than four hours;

(iii) access to the whole or to a substantial part of the house or garden is afforded at the same time; and

(iv) the price, if any, paid by members of the public in return for that access is reasonable in amount and does not operate to preclude members of the public from seeking access to the house or garden.”.

(2) The Capital Acquisitions Tax (Heritage Houses and Gardens) Regulations, 1987 (S.I. No. 28 of 1987), shall be deemed to have been revoked with effect from the 1st day of January, 1997.

(3) This section shall have effect in relation to gifts and inheritances taken on or after the 1st day of February, 1987.

Amendment of section 117 (reduction of market value of certain dwellings) of Finance Act, 1991 .

138. —(1) Section 117 of the Finance Act, 1991 (as amended by section 144 of the Finance Act, 1994 ), is hereby amended by the substitution in subsection (1) of “£80,000” for “£60,000”.

(2) This section shall have effect in relation to inheritances taken on or after the date of the passing of this Act.

Amendment of section 126 (business relief) of Finance, 1994 .

139. —(1) Section 126 (inserted by the Finance Act, 1995) of the Finance Act, 1994 , is hereby amended by the substitution of “90 per cent.” for “75 per cent.” (inserted by the Finance Act, 1996).

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 23rd day of January, 1997.

Amendment of section 127 (relevant business property) of Finance Act, 1994 .

140. —(1) Section 127 of the Finance Act, 1994 , is hereby amended by the substitution of the following subsections for subsection (6):

“(6) Any land, building, machinery or plant used wholly or mainly for the purposes of a business carried on as mentioned in subsection (1) (e) shall not be relevant business property in relation to a gift or inheritance, unless the disponer's interest in the business is, or shares in or securities of the company carrying on the business immediately before the gift or inheritance are, relevant business property in relation to the gift or inheritance or in relation to a simultaneous gift or inheritance taken by the same donee or successor.

(7) The references to a disponer in subsections (1) (e) and (6) shall include a reference to a person in whom the land, building, machinery or plant concerned is vested for a beneficial interest in possession immediately before the gift or inheritance.

(8) Where shares or securities are vested in the trustees of a settlement, any powers of voting which they give to the trustees of the settlement shall, for the purposes of subsection (1) (e), be deemed to be given to the person beneficially entitled in possession to the shares or securities except in a case where no individual is so entitled.”.

(2) This section shall have effect in relation to gifts and inheritances taken on or after the 26th day of March, 1997.

Amendment of section 135 (withdrawal of relief) of Finance Act, 1994 .

141. —(1) Section 135 of the Finance Act, 1994 , is hereby amended, in subparagraph (iii) of the proviso (inserted by the Finance Act, 1996) to subsection (2), by the substitution of “four-ninths” for “one-third”.

(2) This section shall have effect in relation to gifts or inheritances taken on or after the 23rd day of January, 1997.

Exemption of certain transfers from capital acquisitions tax following the dissolution of a marriage.

142. —(1) Notwithstanding the provisions of the Principal Act, a gift or inheritance (within the meaning, in each case, of that Act) taken by virtue or in consequence of an order to which this subsection applies by a spouse who was a party to the marriage concerned shall be exempt from any capital acquisitions tax under that Act and shall not be taken into account in computing such a tax.

(2) Subsection (1) applies—

(a) to a relief order or an order under section 25 of the Family Law Act, 1995, made following the dissolution of a marriage, or

(b) to a maintenance pending relief order made following the granting of leave under section 23 (3) of the Family Law Act, 1995, to a spouse whose marriage has been dissolved,

(c) to an order referred to in section 41 (a) of the Family Law Act, 1995, or an order under section 42 (1) of that Act made in addition to or instead of an order under section 41 (a) of that Act, in favour of a spouse whose marriage has been dissolved, and

(d) to an order under Part III of the Family Law (Divorce) Act, 1996.

(3) Section 51 of the Family Law Act, 1995, and section 34 of the Family Law (Divorce) Act, 1996, are hereby repealed.

Abatement and postponement of probate tax on certain property.

143.— (1) Subsection (1) of section 115A of the Finance Act, 1993 (which was inserted by the Finance Act, 1994 , and provides for the abatement or postponement of probate tax payable by a surviving spouse)—

(a) shall apply to a spouse in whose favour an order has been made—

(i) under section 25 of the Family Law Act, 1995, or

(ii) under section 18 of the Family Law (Divorce) Act, 1996,

as it applies to a spouse referred to in the said section 115A, and

(b) shall apply to property or an interest in property the subject of such an order as it applies to the share of a spouse referred to in the said section 115A in the estate of a deceased referred to in that section or the interest of such a spouse in property referred to in that section,

with any necessary modifications.

(2) Section 53 of the Family Law Act, 1995, and section 36 of the Family Law (Divorce) Act, 1996, are hereby repealed.