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13 1949

FINANCE ACT, 1949

PART III.

Death Duties.

Amendment of section 2 of the Finance Act, 1894.

18. —Paragraph (e) of subsection (1) of section 2 of the Finance Act, 1894 (being the paragraph inserted in that subsection by subsection (1) of section 32 of the Finance Act, 1924 (No. 27 of 1924)) is hereby amended by the insertion after the words “at least three years before the death of the deceased,” of the words “or, in the case of a gift for public or charitable purposes, at least one year before the death of the deceased,”.

Relaxation of provisions of Finance Act, 1941, as to purchases of annuities, etc., from relatives.

19. —(1) Subject to the provisions of this section, the relief specified therein shall be granted where, on the death of a person who has made a disposition of property in favour of a relative of his or a company (hereinafter in this section referred to as the disposition), any estate duty becomes, or would but for this section become, payable by virtue of section 31 of the Finance Act, 1941 (No. 14 of 1941) (which relates to purchases of annuities or other interests from relatives).

(2) The sum on which estate duty would be payable apart from this section on the death in respect of the property which was the subject matter of the disposition or in respect of the property liable to a debt or incumbrance created by the deceased which was the subject matter of the disposition, as the case may be, shall first be computed and, subject to the limitations provided for by subsection (3) of this section, there shall then be allowed as a deduction from that sum—

(a) the amount, if any, by which the aggregate of the payments which have been made on account of the annuity or other interest for the period from the date when the annuity or other interest began to accrue in favour of the deceased until his death, exceeds the aggregate of the income derived from the deceased by virtue of the disposition for the period from the date of the disposition until his death; and

(b) simple interest on so much, if any, of the amount aforesaid, and for such period, as, in the opinion of the Revenue Commissioners, is in all the circumstances just, at the rates from time to time payable during that period on death duties in arrear.

In this subsection, the expression “the aggregate of the income derived from the deceased by virtue of the disposition” means—

(i) in relation to so much of the property which was the subject matter of the disposition as did not consist of a debt or incumbrance created by the deceased, such amount as, in the opinion of the Revenue Commissioners, is in all the circumstances equal to a reasonable return from the property; and

(ii) in relation to so much of the property which was the subject matter of the disposition as did consist of a debt or incumbrance created by the deceased, the aggregate amount of the interest paid or payable by the deceased in respect of that debt or incumbrance.

(3) The amount to be allowed as a deduction under subsection (2) of this section shall, in the circumstances specified in the provisions of the Fourth Schedule to this Act, be limited to the extent specified in those provisions respectively.

In the said Schedule, the expression “the disposition” has the same meaning as in this section, the expression “the annuity payments” means the payments specified in paragraph (a) of subsection (2) of this section, and the expression “the amount allowed” means the amount to be allowed as a deduction under this section.

(4) In this section, the word “relative” has the meaning assigned to it by subsection (4) of section 31 of the Finance Act, 1941 , and section 27 of that Act shall apply for the interpretation of this section and the said Fourth Schedule as it applies for the interpretation of Part IV of that Act.

(5) This section shall be deemed to have had effect as respects persons dying after the 7th day of May, 1941.

Estate duty where policies are kept up or effected under settlements.

20. —(1) For the purposes of the last paragraph of subsection (1) of section 11 of the Customs and Inland Revenue Act, 1889 (which, as applied for the purposes of estate duty, provides that money received under a policy of assurance effected by the deceased person on his life and kept up by him shall be treated as passing on his death), so much of the premiums paid on any policy of assurance as was, by virtue or in consequence of a settlement made by the deceased, paid out of property, whether or not provided by the deceased, comprised in the settlement, or out of income, whether or not provided by the deceased, arising under the settlement, shall, subject to subsection (2) of this section, be treated as having been paid by the deceased.

(2) Any payments referred to in subsection (1) of this section which were not made either out of property provided directly or indirectly by the deceased for the purposes of the settlement, or out of property representing that property, or out of income provided directly or indirectly by the deceased whether arising from such property or otherwise, shall not be treated as having been made by the deceased if the Revenue Commissioners are satisfied that those payments were not made as part of any reciprocal arrangements between the deceased and any other person.

(3) For the purposes of the said enactment in the Customs and Inland Revenue Act, 1889, a policy of assurance on the life of a deceased person effected by virtue or in consequence of a settlement made by the deceased shall be treated as having been effected by the deceased.

(4) This section shall be deemed to have had effect as respects persons dying on or after the 4th day of May, 1949.

(5) For the purposes of this section—

(a) the expression “settlement” includes any disposition, trust, covenant, agreement or arrangement; and

(b) a person shall be deemed to have made a settlement if he has made or entered into the settlement directly or indirectly, and in particular (but without prejudice to the generality of the foregoing words of this paragraph) if he has provided or undertaken to provide funds directly or indirectly for the purposes of the settlement, or has made with any other person a reciprocal arrangement for that person to make or enter into the settlement.