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8 1976

CAPITAL ACQUISITIONS TAX ACT, 1976

PART II

Gift Tax

Charge of gift tax.

4. —A capital acquisitions tax, to be called gift tax and to be computed as hereinafter provided, shall, subject to this Act and the regulations thereunder, be charged, levied and paid upon the taxable value of every taxable gift taken by a donee, where the date of the gift is on or after the 28th day of February, 1974.

Gift deemed to be taken.

5. —(1) For the purposes of this Act, where, under or in consequence of any disposition, a person becomes beneficially entitled in possession, otherwise than on a death, to any benefit (whether or not the person becoming so entitled already has any interest in the property in which he takes such benefit), otherwise than for full consideration in money or money's worth paid by him, he shall be deemed to take a gift.

(2) A gift shall be deemed—

(a) to consist of the whole or the appropriate part, as the case may be, of the property in which the donee takes a benefit, or on which the benefit is charged or secured or on which the donee is entitled to have it charged or secured; and

(b) if the benefit is an annuity or other periodic payment which is not charged on or secured by any property and which the donee is not entitled to have so charged or secured, to consist of such sum as would, if invested on the date of the gift in the security of the Government which was issued last before that date for subscription in the State and is redeemable not less than 10 years after the date of issue, yield, on the basis of the current yield on the security, an annual income equivalent to the annual value of the annuity or of the other periodic payment receivable by the donee.

(3) For the purposes of section 6 (1) (c), the sum referred to in subsection (2) (b) shall be deemed not to be situate in the State at the date of the gift.

(4) Where a person makes a disposition under which a relative of the person becomes beneficially entitled in possession to any benefit, the creation or disposition in favour of the person of an annuity or other interest limited to cease on the death, or at a time ascertainable only by reference to the death, of the person, shall not be treated for the purposes of this section as consideration for the grant of such benefit or of any part thereof.

(5) For the purposes of this Act, “appropriate part”, in relation to property referred to in subsection (2), means that part of the entire property in which the benefit subsists, or on which the benefit is charged or secured, or on which the donee is entitled to have it so charged or secured, which bears the same proportion to the entire property as the gross annual value of the benefit bears to the gross annual value of the entire property, and the gift shall be deemed to consist of the appropriate part of each and every item of property comprised in the entire property.

(6) (a) Where, before the 28th day of February, 1974, a contract or agreement was entered into, under or as a consequence of which a person acquired the right, otherwise than for full consideration in money or money's worth, to have a benefit transferred to him, or to another in his right or on his behalf, and an act or acts is or are done, on or after that date, in pursuance of, or in performance or satisfaction, whether in whole or in part, of such contract or agreement, then the gift or inheritance, as the case may be, taken by or in right or on behalf of that person, shall be deemed to have been taken, not when the right was acquired as aforesaid, but either—

(i) when the benefit was transferred to him or to another in his right or on his behalf; or

(ii) when he or another in his right or on his behalf became beneficially entitled in possession to the benefit,

whichever is the later.

(b) In this subsection, a reference to a contract or agreement does not include a reference to a contract or agreement—

(i) which is a complete grant, transfer, assignment or conveyance; or

(ii) which was enforceable by action prior to the 28th day of February, 1974.

Taxable gift.

6. —(1) In this Act, “taxable gift” means—

(a) in the case of a gift, other than a gift taken under a discretionary trust, where—

(i) the disponer is domiciled in the State at the date of the disposition under which the donee takes the gift;

or

(ii) the proper law of the disposition under which the donee takes the gift is, at the date of the disposition, the law of the State,

the whole of the gift;

(b) in the case of a gift taken under a discretionary trust where—

(i) the disponer is domiciled in the State at the date of the gift or was (in the case of a gift taken after his death) so domiciled at the time of his death; or

(ii) the proper law of the discretionary trust at the date of the gift is the law of the State,

the whole of the gift; and

(c) in any other case, so much of the property of which the gift consists as is situate in the State at the date of the gift.

(2) For the purposes of subsection (1) (c), a right to the proceeds of sale of property shall be deemed to be situate in the State to the extent that such property is unsold and situate in the State.

(3) Notwithstanding anything contained in subsection (1), no part of the property of which a gift consists shall be a taxable gift where—

(a) the gift is taken prior to the 1st day of April, 1975; and

(b) the disponer in relation to the gift dies prior to that date.

Liability to gift tax in respect of gift taken by joint tenants.

7. —The liability to gift tax in respect of a gift taken by persons as joint tenants shall be the same in all respects as if they took the gift as tenants in common in equal shares.

Disponer in certain connected dispositions.

8. —(1) Where a donee takes a gift under a disposition made by a disponer (in this section referred to as the original disponer) and, within the period commencing three years before and ending three years after the date of that gift, the donee makes a disposition under which a second donee takes a gift and whether or not the second donee makes a disposition within the same period under which a third donee takes a gift, and so on, each donee shall be deemed to take a gift from the original disponer (and not from the immediate disponer under whose disposition the gift was taken); and a gift so deemed to be taken shall be deemed to be an inheritance (and not a gift) taken by the donee, as successor, from the original disponer if—

(a) the original disponer dies within two years after the date of the disposition made by him; and

(b) the date of the disposition was on or after the 1st day of April, 1975.

(2) This section shall not apply in the case of any disposition (in this subsection referred to as the first-mentioned disposition) in so far as no other disposition, which was connected in the manner described in subsection (1) with such first-mentioned disposition, was made with a view to enabling or facilitating the making of the first-mentioned disposition or the recoupment in any manner of the cost thereof.

Aggregable gifts.

9. —Any gift taken by a donee on or after the 28th day of February, 1969, and before the 28th day of February, 1974, so far as it is a taxable gift, shall, for the purpose of computing tax—

(a) on any taxable gift taken by that donee from the same disponer on or after the 28th day of February, 1974; and

(b) on any taxable inheritance taken by that donee, as successor, from the same disponer on or after the 1st day of April, 1975,

be aggregated with the latter taxable gift or taxable inheritance in accordance with the provisions of the Second Schedule.