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14 1940

FINANCE ACT, 1940

PART III.

Death Duties.

Amendment of section 2 (1) of the Finance Act, 1894.

23. —(1) In this section—

the word “disposition” includes any trust, covenant, agreement, or arrangement;

the expression “subject matter” includes any annual or periodical payment made or payable under or by virtue of the disposition in relation to which the said expression is used;

the expression “property derived from the deceased” means any property which—

(a) was the subject matter of a disposition made by the deceased, either by himself alone or in concert or by arrangement with any other person, otherwise than for full consideration in money or money's worth paid to him for his own use or benefit, or

(b) represented any of the subject matter of such a disposition, whether directly or indirectly and whether by virtue of one or more intermediate dispositions, and whether any such intermediate disposition was or was not for full or partial consideration.

(2) Paragraph (d) of sub-section (1) of section 2 of the Finance Act, 1894, shall have effect in relation to an annuity or other interest which was purchased or provided wholly or in part by any person who was at any time entitled to, or amongst whose resources, there was at any time included, any property derived from the deceased either—

(a) as if the said annuity or other interest, as of its actual amount, had been provided by the deceased, or

(b) in a case in which it is proved, to the satisfaction of the Revenue Commissioners, that the application of all the property derived from the deceased would have been insufficient to provide the whole of the said annuity or other interest, as if—

(i) the said annuity or other interest had been provided by the deceased, and

(ii) the amount of the said annuity or other interest were the actual amount thereof reduced to an extent proportionate to the insufficiency proved as aforesaid.

(3) In the application of the foregoing sub-section of this section, there shall be excluded from the property derived from the deceased any part thereof as to which it is proved to the satisfaction of the Revenue Commissioners that the disposition of which it, or the property which it represented, was the subject matter was not made with reference to, or with a view to enabling or facilitating, the purchase or provision of the annuity or other interest or the recoupment in any manner of the cost thereof.

(4) For the purpose of section 4 of the Finance Act, 1894, the deceased shall be deemed to have had an interest in any property included, by virtue of this section in the property passing on the death of the deceased.

(5) The provisions contained in this section shall have effect in respect of every case in which the death of the deceased occurred on or after the 8th day of May, 1940.

Amendment of section 2 (2) of the Finance Act, 1894.

24. —(1) In this section the expression “the principal sub-section” means sub-section (2) of section 2 of the Finance Act, 1894, as amended by section 32 of the Finance Act, 1924 (No. 27 of 1924).

(2) In the case of any person dying on or after the 8th day of May, 1940, the exemption from estate duty applicable by virtue of the principal sub-section in respect of settled movable property situate outside the State shall not apply in respect of any such property passing on such death where, at the date (whether before or after the passing of this Act) when the disposition under which the property passes took effect, the disponer was domiciled in the State or in the area now comprised in the State or where the said disposition was made, directly or indirectly, on behalf of or at the expense of or out of funds provided by a person who at the said date was domiciled as aforesaid.

(3) Notwithstanding the provisions contained in the next preceding sub-section of this section, the exemption from estate duty applicable by virtue of the principal sub-section in respect of settled movable property situate outside the State shall be deemed to apply in relation to the death of the disponer (but not in relation to any other death) where—

(a) the disponer dies domiciled outside the State, and

(b) the disposition constitutes an immediate gift inter vivos made by the disponer within three years of his death or constitutes a gift (whenever made) of property of which bona fide possession and enjoyment was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the disponer or of any benefit to him by contract or otherwise, and

(c) estate duty would, having regard to the provisions contained in the said next preceding sub-section, be chargeable on the death of the disponer.

Amendment of section 7 of the Finance Act, 1894.

25. —(1) In this section—

the word “disposition” includes any trust, covenant, agreement, or arrangement;

the expression “subject matter” includes any annual or periodical payment made or payable under or by virtue of the disposition in relation to which the said expression is used;

the expression “property derived from the deceased” means any property which—

(a) was the subject matter of a disposition made by the deceased, either by himself alone or in concert or by arrangement with any other person, otherwise than for full consideration in money or money's worth paid to him for his own use or benefit, or

(b) represented any of the subject matter of such a disposition, whether directly or indirectly and whether by virtue of one or more intermediate dispositions, and whether any such intermediate disposition was or was not for full or partial consideration.

(2) Any allowance which, but for this sub-section, would be made under sub-section (1) of section 7 of the Finance Act, 1894, for a debt incurred by the deceased as mentioned in paragraph (a) of the said sub-section (1) or for an incumbrance created by a disposition made by the deceased as therein mentioned shall be subject to abatement to an extent proportionate to the value of any of the consideration given therefor which consisted of—

(a) property derived from the deceased, or

(b) consideration (not being property derived from the deceased) given by any person who was at any time entitled to, or amongst whose resources there was at any time included, any property derived from the deceased.

(3) In the application of sub-section (2) of this section to a case in which the whole or a part of the consideration given consisted of such consideration as is mentioned in paragraph (b) of the said sub-section (2) and as to which it is proved to the satisfaction of the Revenue Commissioners that the value of the consideration given or the said part thereof (as the case may be) exceeded that which could have been rendered available by application of all the property derived from the deceased (other than such, if any, of that property as is included in the consideration given or as to which it is proved to the satisfaction of the Revenue Commissioners that the disposition of which it, or the property which it represented, was the subject matter was not made with reference to, or with a view to enabling or facilitating, the provision of the consideration or the recoupment in any manner of the cost thereof), no abatement shall be made in respect of the excess.

(4) The following property, that is to say—money or money's worth which is paid or applied by the deceased less than three years before the death either—

(a) in or towards satisfaction or discharge of a debt or incumbrance in respect of which sub-section (2) of this section would have had effect on the death if the debt or incumbrance had not been satisfied or discharged, or

(b) in reduction of a debt or incumbrance in respect of which the said sub-section (2) has effect on the death, shall be treated as property deemed to be included in the property passing on the death by virtue of paragraph (c) of sub-section (1) of section 2 of the Finance Act, 1894, and estate duty shall, notwithstanding anything contained in section 3 of that Act, be payable in respect thereof accordingly.

(5) The provisions contained in this section shall have effect in respect of every case in which the death of the deceased occurred on or after the 8th day of May, 1940.

Deduction from estate duty in certain cases.

26. —(1) Where, in the case of a person dying on or after the 1st day of April, 1939, the Revenue Commissioners are satisfied that, under the provisions of section 38 of the enactment now in force in Great Britain and there known as the Finance Act, 1924 , any relief from estate duty payable in Great Britain by reason of the death of such person is given in respect of property situate in Great Britain and passing on such death, the Revenue Commissioners shall, in lieu of and not in addition to any allowance to be made by virtue of paragraph (b) of Part II of the Schedule to the Double Taxation (Relief) Order (No. 1), 1923, allow to be deducted from the estate duty under their care and management which is payable by reason of the said death and in respect of the said property the like amount as would, if the said relief had not been given and this section had not been enacted, be deductible from that estate duty by virtue of the said paragraph (b).

(2) Where, in the case of a person dying on or after the 1st day of April, 1939, the Revenue Commissioners are satisfied that, under the provisions of section 9 of the enactment now in force in Northern Ireland and there known as the Finance Act (Northern Ireland), 1924, any relief from estate duty payable in Northern Ireland by reason of the death of such person is given in respect of property situate in Northern Ireland and passing on such death, the Revenue Commissioners shall, in lieu of and not in addition to any allowance to be made by virtue of paragraph (b) of Part II of the Schedule to the Double Taxation (Relief) Order (No. 1), 1923, allow to be deducted from the estate duty under their care and management which is payable by reason of the said death and in respect of the said property the like amount as would, if the said relief had not been given and this section had not been enacted, be deductible from that estate duty by virtue of the said paragraph (b).