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1 2003

Capital Acquisitions Tax Consolidation Act 2003

PART 9

Exemptions

Exemption of small gifts.

[CATA 1976 s53(1), (2) and (4)]

69. —(1) In this section, “relevant period” means the period of 12 months ending on 31 December in each year.

(2) The first €1,270 of the total taxable value of all taxable gifts taken by a donee from any one disponer in any relevant period is exempt from tax and is not taken into account in computing tax.

(3) In the case of a gift which becomes an inheritance by reason of its being taken under a disposition where the date of the disposition is within 2 years prior to the death of the disponer, the same relief is granted in respect of that inheritance under subsection (2) as if it were a gift.

Exemption for spouses (gifts).

[FA 1990 s127(1)]

70. —Notwithstanding any other provisions of this Act, a gift taken by a donee, who is at the date of the gift the spouse of the disponer, is exempt from tax and is not taken into account in computing tax.

Exemption for spouses (inheritances).

[FA 1985 s59(1)]

71. —Notwithstanding any other provisions of this Act, an inheritance taken by a successor, who is at the date of the inheritance the spouse of the disponer, is exempt from tax and is not taken into account in computing tax.

Relief in respect of certain policies of insurance.

[FA 1985 s60(1), (1A) and (2); FA 1990 s130; FA 1991 s118; FA 1996 s124]

72. —(1) In this section—

“insured” means an individual or, in relation to a qualifying insurance policy where—

(a) the insured is an individual and the spouse of that individual at the date the policy is effected,

(b) annual premiums are paid by either or both of them during their joint lives, and by the survivor of them during the life of such survivor, and

(c) the proceeds of the policy are payable on the death of such survivor, or on the simultaneous deaths of both such spouses,

means—

(i) where the proceeds of the policy are so payable on the death of such survivor, that survivor, and the proceeds of the policy is deemed to have been provided by such survivor, as disponer, or

(ii) where the proceeds of the policy are so payable on the simultaneous deaths of both such spouses, each of the spouses, and each such spouse is deemed to have provided the proceeds of the policy—

(I) to the extent that such proceeds are applied in paying the relevant tax of the insured who is that spouse, and

(II) where the proceeds of the policy are not applied in paying relevant tax, to the extent that the proceeds not so applied are comprised in an inheritance taken under a disposition made by that spouse;

“qualifying insurance policy” means a policy of insurance—

(a) which is in a form approved by the Commissioners for the purposes of this section,

(b) in respect of which annual premiums are paid by the insured during the insured's life, and

(c) which is expressly effected under this section for the purpose of paying relevant tax;

“relevant tax” means inheritance tax payable in respect of an inheritance (excluding, in the computation of such tax, an interest in a qualifying insurance policy) taken—

(a) on the death of the insured,

(b) under a disposition made by the insured, where the inheritance is taken on or after the date of death of the insured and not later than one year after that death, and

(c) under a disposition made by the spouse of the insured where the inheritance is taken only in the event of the insured not surviving the spouse by a period of up to 31 days,

and the relevant qualifying insurance policy is—

(i) a policy of insurance within the meaning of paragraphs (a), (b) and (c) of the definition of “insured” in this subsection, or

(ii) a policy of insurance where the insured is an individual and the proceeds of the policy are payable only on the contingency of the insured surviving that spouse.

(2) (a) An interest in a qualifying insurance policy which is comprised in an inheritance taken under a disposition made by the insured is, to the extent that the proceeds of the policy are applied in paying relevant tax, exempt from tax in relation to that inheritance and is not taken into account in computing tax.

(b) An interest in a qualifying insurance policy which is comprised in an inheritance taken under a disposition made by the insured is, to the extent that the proceeds of the policy are not applied in paying relevant tax, and notwithstanding the provisions of this Act, deemed to be taken on a day immediately after—

(i) the date of the death of the insured, or

(ii) the latest date (if any) on which an inheritance is taken in respect of which that relevant tax is payable,

whichever is the later.

Relief in respect of certain policies of insurance relating to tax payable on gifts.

[FA 1991 s119(1) to (5)]

73. —(1) In this section—

“appointed date” means—

(a) a date occurring not earlier than 8 years after the date on which a relevant insurance policy is effected, or

(b) a date on which the proceeds of a relevant insurance policy become payable either on the critical illness or the death of the insured, or one of the insured in a case to which paragraph (b) of the definition of “insured” relates, being a date prior to the date to which paragraph (a) of this definition relates;

“insured” means—

(a) where the insured is an individual, that individual, or

(b) where the insured is an individual and the spouse of that individual at the date the policy is effected, that individual and the spouse of that individual, jointly or separately, or the survivor of them, as the case may be;

“relevant insurance policy” means a policy of insurance—

(a) which is in a form approved by the Commissioners for the purposes of this section,

(b) in respect of which annual premiums are paid by the insured,

(c) the proceeds of which are payable on the appointed date, and

(d) which is expressly effected under this section for the purpose of paying relevant tax;

“relevant tax” means gift tax or inheritance tax, payable in connection with an inter vivos disposition made by the insured within one year after the appointed date, excluding gift tax or inheritance tax payable on an appointment out of an inter vivos discretionary trust set up by the insured.

(2) The proceeds of a relevant insurance policy are, to the extent that such proceeds are used to pay relevant tax, exempt from tax and are not taken into account in computing such tax.

(3) Subject to sections 70 and 76, where the insured makes an inter vivos disposition of the proceeds, or any part of the proceeds, of a relevant insurance policy other than in paying relevant tax, such proceeds are not exempt from tax.

(4) A relevant insurance policy is a qualifying insurance policy for the purposes of section 72 where the proceeds of such relevant insurance policy become payable on the death of the insured or one of the insured in a case to which paragraph (b) of the definition of “insured” relates, if such relevant insurance policy would have been a qualifying insurance policy if it had been expressly effected under that section.

(5) A qualifying insurance policy for the purposes of section 72 is a relevant insurance policy where the proceeds of such qualifying insurance policy are used to pay relevant tax arising under an inter vivos disposition made by the insured within one year after the appointed date.

Exemption of certain policies of assurance.

[FA 1993 s133]

74. —(1) In this section—

“assurance company” has the meaning assigned to it by section 706 of the Taxes Consolidation Act 1997 ;

“new policy” means a contract entered into by an assurance company which is a policy of assurance on the life of any person issued on or after 1 January 2001;

“old policy” means a contract entered into by an assurance company in the course of carrying on a foreign life assurance business within the meaning of section 451 of the Taxes Consolidation Act 1997 and issued on or after 1 December 1992 and before 1 January 2001.

(2) Where any interest in a new policy or in an old policy is comprised in a gift or an inheritance, then any such interest—

(a) is exempt from tax, and

(b) is not taken into account in computing tax on any gift or inheritance taken by a donee or successor,

if it is shown to the satisfaction of the Commissioners that—

(i) such interest is comprised in the gift or inheritance at the date of the gift or at the date of the inheritance,

(ii) at the date of the disposition, the disponer is neither domiciled nor ordinarily resident in the State, and

(iii) at the date of the gift or at the date of the inheritance, the donee or successor is neither domiciled nor ordinarily resident in the State.

(3) Where—

(a) an interest in a new policy or in an old policy, as the case may be, which is comprised in a gift or inheritance came into the beneficial ownership of the disponer or became subject to the disposition prior to 15 February 2001, and

(b) the conditions at subparagraphs (i) and (iii) of subsection (2) are complied with,

then that subsection shall apply to that interest in a new policy or in an old policy, as the case may be, if, at the date of the disposition, the proper law of the disposition was not the law of the State.

Exemption of specified collective investment undertakings.

[FA 1989 s85(1) and (2); FA 2001 s224(2) and (4) (part)]

75. —In this section—

“investment undertaking” has the meaning assigned to it by section 739B of the Taxes Consolidation Act 1997 ;

“specified collective investment undertaking” has the meaning assigned to it by section 734 of the Taxes Consolidation Act 1997 ;

“unit”, in relation to an investment undertaking, has the meaning assigned to it by section 739B of the Taxes Consolidation Act 1997 ;

“unit”, in relation to a specified collective investment undertaking, has the meaning assigned to it by section 734 of the Taxes Consolidation Act 1997 .

(2) Where any unit of an investment undertaking or of a specified collective investment undertaking is comprised in a gift or an inheritance, then such unit—

(a) is exempt from tax, and

(b) is not taken into account in computing tax on any gift or inheritance taken by the donee or successor,

if it is shown to the satisfaction of the Commissioners that—

(i) the unit is comprised in the gift or inheritance—

(I) at the date of the gift or at the date of the inheritance, and

(II) at the valuation date,

(ii) at the date of the disposition, the disponer is neither domiciled nor ordinarily resident in the State, and

(iii) at the date of the gift or at the date of the inheritance, the donee or successor is neither domiciled nor ordinarily resident in the State.

(3) Where—

(a) any unit of an investment undertaking or of a specified collective investment undertaking which is comprised in a gift or inheritance came into the beneficial ownership of the disponer or became subject to the disposition prior to 15 February 2001, and

(b) the conditions at subparagraphs (i) and (iii) of subsection (2) are complied with,

then that subsection shall apply to that unit of an investment undertaking or to that unit of a specified collective investment undertaking, as the case may be, comprised in a gift or inheritance, if at the date of the disposition, the proper law of the disposition was not the law of the State.

Provisions relating to charities, etc.

[CATA 1976 s54(1), (2) and (4)]

76. —(1) Where any person takes a benefit for public or charitable purposes that person is deemed—

(a) for the purposes of sections 5(1) and 10(1), to have taken that benefit beneficially, and

(b) for the purposes of Schedule 2, to have taken a gift or an inheritance accordingly to which the group threshold of €19,050 applies.

(2) A gift or an inheritance which is taken for public or charitable purposes is exempt from tax and is not taken into account in computing tax, to the extent that the Commissioners are satisfied that it has been, or will be, applied to purposes which, in accordance with the law of the State, are public or charitable.

(3) Except where provided in section 80 (5), a gift or inheritance which a person takes on becoming entitled to any benefit on the application to public or charitable purposes of property (including moneys provided by the Oireachtas or a local authority) held for such purposes is exempt from tax and is not taken into account in computing tax.

Exemption of heritage property.

[CATA 1976 s55; FA 1978 s39(1) and (1A)]

77. —(1) This section applies to the following objects, that is, any pictures, prints, books, manuscripts, works of art, jewellery, scientific collections or other things not held for the purposes of trading—

(a) which, on a claim being made to the Commissioners, appear to them to be of national, scientific, historic or artistic interest,

(b) which are kept permanently in the State except for such temporary absences outside the State as are approved by the Commissioners, and

(c) in respect of which reasonable facilities for viewing are allowed to members of the public or to recognised bodies or to associations of persons.

(2) (a) Any object to which this section applies and which, at the date of the gift or at the date of inheritance, and at the valuation date, is comprised in a gift or an inheritance taken by a person is exempt from tax in relation to that gift or inheritance, and the value of that gift or inheritance is not taken into account in computing tax on any gift or inheritance taken by that person unless the exemption ceases to apply under subsection (3) or (4).

(b) Section 89 (5) shall apply, for the purposes of this subsection, as it applies in relation to agricultural property.

(3) If an object exempted from tax by virtue of subsection (2) is sold within 6 years after the valuation date, and before the death of the donee or successor, the exemption referred to in subsection (2) shall cease to apply to such object, but if the sale of such object is a sale by private treaty to the National Gallery of Ireland, the National Museum of Science and Art or any other similar national institution, any university in the State or any constituent college of such university, a local authority or the Friends of the National Collections of Ireland, the exemption referred to in subsection (2) shall continue to apply.

(4) The exemption referred to in subsection (2) shall cease to apply to an object, if at any time after the valuation date and—

(a) before the sale of the object,

(b) before the death of the donee or successor, and

(c) before such object again forms part of the property comprised in a gift or an inheritance (other than an inheritance arising by virtue of section 20 ) in respect of which gift or inheritance an absolute interest is taken by a person other than the spouse of that donee or successor.

there has been a breach of any condition specified in paragraph (b) or (c) of subsection (1).

(5) Any work of art normally kept outside the State which is comprised in an inheritance which is charged to tax by virtue of section 11 (1)(b) or 11(2)(c) is exempt from tax and is not taken into account in computing tax, to the extent that the Commissioners are satisfied that it was brought into the State soley for public exhibition, cleaning or restoration.

(6) Subsections (2) to (4) shall apply to the objects specified in subsection (1), to a house or garden that is situated in the State and is not held for the purpose of trading and—

(a) which, on a claim being made to the Commissioners, appears to them to be of national, scientific, historic or artistic interest,

(b) in respect of which reasonable facilities for viewing were allowed to members of the public during the 3 years immediately before the date of the gift or the date of the inheritance, and

(c) in respect of which reasonable facilities for viewing are allowed to members of the public,

with the modification that the reference in subsection (4) to subsection (1)(b) or (c) shall be construed as a reference to paragraph (c) of this subsection and with any other necessary modifications.

(7) Without prejudice to the generality of subsection (6), the provision of facilities for the viewing by members of the public of a house or garden is not regarded as reasonable in relation to any year which is taken into account for the purposes of paragraphs (b) and (c) of subsection (1), unless—

(a) Bord Fáilte Éireann (in this section referred to as “the Board”) has, on or before 1 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 1 May and ending on 30 September of which not less than 10 of the days during that period shall fall on a Saturday or a Sunday or both) 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 4 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.

Heritage property of companies.

[FA 1995 s166(1) to (7)]

78. —(1) In this section—

“relevant heritage property” means any one or more of the following—

(a) objects to which section 77 (1) applies,

(b) a house or garden referred to in section 77 (6);

“private company” has the meaning assigned to it by section 27 ;

“subsidiary” has the meaning assigned to it by section 155 of the Companies Act 1963 .

(2) Where a gift or inheritance consists in whole or in part—

(a) at the date of the gift or at the date of the inheritance, and

(b) at the valuation date,

of one or more shares in a private company which (after the taking of the gift or inheritance) is, on the date of the gift or on the date of the inheritance, a company controlled by the donee or successor within the meaning of section 27 , then each such share is, to the extent that its market value for tax purposes is, at the valuation date, attributable to relevant heritage property, exempt from tax and the value of such relevant heritage property is, to that extent, not to be taken into account in computing tax on any gift or inheritance taken by that person unless the exemption ceases to apply under subsection (5) or (6), subject to the condition that the relevant heritage property was in the beneficial ownership of the company on 12 April 1995, or in the beneficial ownership on that date of another company which was on that date a subsidiary of the first-mentioned company.

(3) Section 89 (5) shall apply, for the purposes of subsection (2), as it applies in relation to agricultural property.

(4) Where in relation to a gift or inheritance—

(a) a part of a share in a private company is exempt from tax by virtue of subsection (2), and

(b) such share is relevant business property within the meaning of Chapter 2 of Part 10,

then the relevant heritage property to which the market value of such share is partly attributable is disregarded in determining for the purposes of that Chapter what part of the taxable value of that gift or inheritance is attributable to such share; but the amount of the reduction (if any) which would but for subsection (2) fall to be made under that Chapter in respect of such share shall not otherwise be restricted notwithstanding subsection (2).

(5) If a share in a private company which is exempted in whole or in part from tax by virtue of subsection (2) is sold within 6 years after the valuation date, and before the death of the donee or successor, the exemption referred to in subsection (2) shall, subject to subsection (7), cease to apply to such share.

(6) Where the whole or part of the market value of a share in a private company which is comprised in a gift or inheritance is on the valuation date attributable to an item of relevant heritage property and—

(a) that item of relevant heritage property is sold within 6 years after the valuation date, and before the death of the donee or successor, or

(b) at any time after the valuation date and—

(i) before the sale of such share or such item of relevant heritage property,

(ii) before the death of the donee or successor, and

(iii) before such share or such item of relevant heritage property forms part of the property comprised in a subsequent gift or inheritance in respect of which gift or inheritance an absolute interest is taken by a person other than the spouse of that donee or successor,

there has been a breach of any condition specified in section 77 (1)(b) or (c) or section 77 (6)(c),

then the exemption referred to in subsection (2) shall, subject to subsection (7), cease to apply to such share to the extent that that market value is attributable to such item of relevant heritage property.

(7) Notwithstanding subsections (5) and (6), the exemption referred to in subsection (2) shall continue to apply if the sale of the share referred to in subsection (5), or the sale of the item of relevant heritage property referred to in subsection (6), is a sale by private treaty to the National Gallery of Ireland, the National Museum of Science and Art or any other similar national institution, any university in the State or any constituent college of such university, a local authority or the Friends of the National Collections of Ireland.

Exemption of certain inheritances taken by parents.

[FA 1995 s165]

79. —Notwithstanding any other provision of this Act, an inheritance taken by a person from a disponer is, where—

(a) that person is a parent of that disponer, and

(b) the date of the inheritance is the date of death of that disponer,

exempt from tax and is not taken into account in computing tax if that disponer took a non-exempt gift or inheritance from either or both of that disponer's parents within the period of 5 years immediately prior to the date of death of that disponer.

Payments relating to retirement, etc.

[CATA 1976 s56]

80. —(1) In this section—

“superannuation scheme” includes any arrangement in connection with employment for the provision of a benefit on or in connection with the retirement or death of an employee;

“employment” includes employment as a director of a body corporate and cognate words shall be construed accordingly.

(2) Subject to subsection (3), any payment to an employee or former employee by, or out of funds provided by, that employee's or former employee's employer or any other person, bona fide by means of retirement benefit, redundancy payment or pension is not a gift or an inheritance.

(3) Subsection (2) shall not apply in relation to a payment referred to in that subsection, and any such payment is deemed to be a gift or an inheritance where—

(a)  (i) the employee is a relative of the employer or other disponer, or

(ii) the employer is a private company within the meaning of section 27 , and of which private company the employee is deemed to have control within the meaning of that section;

(b) the payment is not made under a scheme (relating to superannuation, retirement or redundancy) approved by the Commissioners under the Income Tax Acts; and

(c) the Commissioners decide that in the circumstances of the case the payment is excessive.

(4) The Commissioners shall serve on an accountable person a notice in writing of their decision referred to in subsection (3) and the accountable person concerned may appeal against such decision and section 67 shall apply with any necessary modifications in relation to such appeal as it applies in relation to an appeal against an assessment of tax.

(5) Any benefit taken by a person other than the person in respect of whose service the benefit arises, under the provisions of any superannuation fund, or under any superannuation scheme, established solely or mainly for persons employed in a profession, trade, undertaking or employment, and their dependants, is (whether or not any person had a right enforceable at law to the benefit) deemed to be a gift or an inheritance, as the case may be, derived under a disposition made by the person in respect of whose service the benefit arises and not by any other person.

Exemption of certain securities.

[CATA 1976 s57(1) and (2); FA 1997 s135(2) (part); FA 2001 s219 (part)]

81. —(1) In this section—

“security” means any security, stock, share, debenture, debenture stock, certificate of charge or other form of security issued, whether before, on or after the passing of this Act, and which by virtue of any enactment or by virtue of the exercise of any power conferred by any enactment is exempt from taxation when in the beneficial ownership of a person neither domiciled nor ordinarily resident in the State;

“unit trust scheme” means an authorised unit trust scheme within the meaning of the Unit Trusts Act 1990 , whose deed expressing the trusts of the scheme restricts the property subject to those trusts to securities.

(2) Securities, or units (within the meaning of the Unit Trusts Act 1990 ) of a unit trust scheme, comprised in a gift or an inheritance are exempt from tax (and are not taken into account in computing tax on any gift or inheritance taken by the donee or successor) if it is shown to the satisfaction of the Commissioners that—

(a) the securities or units were comprised in the disposition continuously for a period of 6 years immediately before the date of the gift or the date of the inheritance, and any period immediately before the date of the disposition during which the securities or units were continuously in the beneficial ownership of the disponer is deemed, for the purpose of this paragraph, to be a period or part of a period immediately before the date of the gift or the date of the inheritance during which they were continuously comprised in the disposition;

(b) the securities or units were comprised in the gift or inheritance—

(i) at the date of the gift or the date of the inheritance, and

(ii) at the valuation date;

and

(c) the donee or successor is at the date of the gift or the date of the inheritance neither domiciled nor ordinarily resident in the State,

and section 89 (5) shall apply, for the purposes of this subsection, as it applies in relation to agricultural property.

(3) Subsection (2)(a) shall not apply where—

(a) the disponer was neither domiciled nor ordinarily resident in the State at the date of the disposition, or

(b) the securities or units concerned came into the beneficial ownership of the disponer before 26 March 1997, or became subject to the disposition before that date, and the disponer was neither domiciled nor ordinarily resident in the State at the date of the gift or the date of the inheritance.

(4) Where the securities or units concerned came into the beneficial ownership of the disponer, or became subject to the disposition prior to 15 February 2001, then subsection (2) shall apply as if the reference to the period of 6 years in that subsection were construed as a reference to a period of 3 years.

Exemption of certain receipts.

[CATA 1976 s58]

82. —(1) The following are not gifts or inheritances:

(a) the receipt by a person of any sum bona fide by means of compensation or damages for any wrong or injury suffered by that person in that person's person, property, reputation or means of livelihood;

(b) the receipt by a person of any sum bona fide by means of compensation or damages for any wrong or injury resulting in the death of any other person;

(c) the receipt by a person of any sum bona fide by means of winnings from betting (including pool betting) or from any lottery, sweepstake or game with prizes;

(d) any benefit arising out of—

(i) the payment to the Official Assignee in Bankruptcy of money which has been provided by, or which represents property provided by, friends of a bankrupt, or

(ii) a remission or abatement of debts by the creditors of a bankrupt,

to enable the bankrupt to fulfil an offer of composition after bankruptcy in accordance with section 39 of the Bankruptcy Act 1988 ; and

(e) any benefit arising out of—

(i) the payment to the Official Assignee in Bankruptcy of money which has been provided by, or which represents property provided by, friends of an arranging debtor, or

(ii) a remission or abatement of debts by the creditors of an arranging debtor,

to enable the debtor to carry out the terms of a proposal made by that debtor under section 87 of the Bankruptcy Act 1988 , which has been accepted by that debtor's creditors and approved and confirmed by the High Court.

(2) Notwithstanding anything contained in this Act, the receipt in the lifetime of the disponer of money or money's worth—

(a) by—

(i) the spouse or child of the disponer, or

(ii) a person in relation to whom the disponer stands in loco parentis,

for support, maintenance or education, or

(b) by a person who is in relation to the disponer a dependent relative under section 466 of the Taxes Consolidation Act 1997 , for support or maintenance,

is not a gift or an inheritance, where the provision of such support, maintenance or education, or such support or maintenance—

(i) is such as would be part of the normal expenditure of a person in the circumstances of the disponer, and

(ii) is reasonable having regard to the financial circumstances of the disponer.

(3) (a) In this subsection “incapacitated individual”, “trust funds” and “qualifying trust” have the meanings assigned to them, respectively, by section 189A (inserted by the Finance Act 1999 ) of the Taxes Consolidation Act 1997 .

(b) The receipt by an incapacitated individual of the whole or any part of trust funds which are held on a qualifying trust, or of the income from such a qualifying trust, is not a gift or an inheritance.

(4) The receipt by a minor child of the disponer of money or money's worth for support, maintenance or education, at a time when the disponer and the other parent of that minor child are dead, is not a gift or an inheritance where the provision of such support, maintenance or education—

(a) is such as would be part of the normal expenditure of a person in the circumstances of the disponer immediately prior to the death of the disponer, and

(b) is reasonable having regard to the financial circumstances of the disponer immediately prior to the death of the disponer.

Exemption where disposition was made by the donee or successor.

[CATA 1976 s59]

83. —(1) In this section, “company” means a body corporate (wherever incorporated), other than a private company within the meaning of section 27 .

(2) Tax is not chargeable on a gift or an inheritance taken by the donee or successor under a disposition made by that donee or successor.

(3) Where, at the date of the gift, 2 companies are associated in the manner described in subsection (4), a gift taken by one of them under a disposition made by the other is deemed to be a gift to which subsection (2) applies.

(4) For the purposes of subsection (3), 2 companies shall be regarded as associated if—

(a) one company would be beneficially entitled to not less than 90 per cent of any assets of the other company available for distribution to the owners of its shares and entitlements of the kind referred to in section 43 (1) on a winding up, or

(b) a third company would be beneficially entitled to not less than 90 per cent of any assets of each of them available as in paragraph (a).

Exemption relating to qualifying expenses of incapacitated persons.

[CATA 1976 s59A]

84. —(1) In this section, “qualifying expenses” means expenses relating to medical care including the cost of maintenance in connection with such medical care.

(2) A gift or inheritance which is taken exclusively for the purpose of discharging qualifying expenses of an individual who is permanently incapacitated by reason of physical or mental infirmity is, to the extent that the Commissioners are satisfied that it has been or will be applied to such purpose, exempt from tax and is not taken into account in computing tax.

Exemption relating to retirement benefits.

[CATA 1976 s59B]

85. —(1) In this section, “retirement fund”, in relation to an inheritance taken on the death of a disponer, means an approved retirement fund or an approved minimum retirement fund, within the meaning of section 784A or 784C of the Taxes Consolidation Act 1997 , being a fund which is wholly comprised of all or any of the following, that is—

(a) property which represents in whole or in part the accrued rights of the disponer, or of a predeceased spouse of the disponer, under an annuity contract or retirement benefits scheme approved by the Commissioners for the purposes of Chapter 1 or Chapter 2 of Part 30 of that Act,

(b) any accumulations of income of such property, or

(c) property which represents in whole or in part those accumulations.

(2) The whole or any part of a retirement fund which is comprised in an inheritance which is taken on the death of a disponer is exempt from tax in relation to that inheritance and the value of that inheritance is not taken into account in computing tax, where—

(a) the disposition under which the inheritance is taken is the will or intestacy of the disponer, and

(b) the successor is a child of the disponer and had attained 21 years of age at the date of that disposition.

Exemption relating to certain dwellings.

[CATA 1976 s59C]

86. —(1) In this section—

“dwelling-house” means—

(a) a building or part (including an appropriate part within the meaning of section 5 (5)) of a building which was used or was suitable for use as a dwelling, and

(b) the curtilage of the dwelling-house up to an area (exclusive of the site of the dwelling-house) of one acre but if the area of the curtilage (exclusive of the site of the dwelling-house) exceeds one acre then the part which comes within this definition is the part which, if the remainder were separately occupied, would be the most suitable for occupation and enjoyment with the dwelling-house;

“relevant period”, in relation to a dwelling-house comprised in a gift or inheritance, means the period of 6 years commencing on the date of the gift or the date of the inheritance.

(2) In this section any reference to a donee or successor is construed as including a reference to the transferee referred to in section 32 (2).

(3) Subject to subsections (4), (5), (6) and (7), a dwelling-house comprised in a gift or inheritance which is taken by a donee or successor who—

(a) has continuously occupied as that donee or successor's only or main residence—

(i) that dwelling-house throughout the period of 3 years immediately preceding the date of the gift or the date of the inheritance, or

(ii) where that dwelling-house has directly or indirectly replaced other property, that dwelling-house and that other property for periods which together comprised at least 3 years falling within the period of 4 years immediately preceding the date of the gift or the date of the inheritance,

(b) is not, at the date of the gift or at the date of the inheritance, beneficially entitled to any other dwelling-house or to any interest in any other dwelling-house, and

(c) continues to occupy that dwelling-house as that donee or successor's only or main residence throughout the relevant period,

is exempt from tax in relation to that gift or inheritance, and the value of that dwelling-house is not to be taken into account in computing tax on any gift or inheritance taken by that person unless the exemption ceases to apply under subsection (6) or (7).

(4) The condition in paragraph (c) of subsection (3) shall not apply where the donee or successor has attained the age of 55 years at the date of the gift or at the date of the inheritance.

(5) For the purpose of paragraph (c) of subsection (3), the donee or successor is deemed to occupy the dwelling-house concerned as that donee or successor's only or main residence throughout any period of absence during which that donee or successor worked in an employment or office all the duties of which were performed outside the State.

(6) If a dwelling-house exempted from tax by virtue of subsection (3) is sold or disposed of, either in whole or in part, within the relevant period, and before the death of the donee or successor (not being a donee or successor who had attained the age of 55 years at the date of the gift or inheritance), the exemption referred to in that subsection shall cease to apply to such dwelling-house unless the sale or disposal occurs in consequence of the donee or successor requiring long-term medical care in a hospital, nursing home or convalescent home.

(7) The exemption referred to in subsection (3) shall cease to apply to a dwelling-house, if at any time during the relevant period and—

(a) before the dwelling-house is sold or disposed of, and

(b) before the death of the donee or successor,

the condition specified in paragraph (c) of subsection (3) has not been complied with unless that non-compliance occurs in consequence of the donee or successor requiring long-term medical care in a hospital, nursing home or convalescent home, or in consequence of any condition imposed by the employer of the donee or successor requiring the donee or successor to reside elsewhere.

(8) Where a dwelling-house exempted from tax by virtue of subsection (3) (in this section referred to as the “first-mentioned dwelling-house”) is replaced within the relevant period by another dwelling-house, the condition specified in paragraph (c) of subsection (3) is treated as satisfied if the donee or successor has occupied as that donee or successor's only or main residence the first-mentioned dwelling-house, that other dwelling-house and any dwelling-house which has within the relevant period directly or indirectly replaced that other dwelling-house for periods which together comprised at least 6 years falling within the period of 7 years commencing on the date of the gift or the date of the inheritance.

(9) Any period of absence which would satisfy the condition specified in paragraph (c) of subsection (3) in relation to the first-mentioned dwelling-house shall, if it occurs in relation to any dwelling-house which has directly or indirectly replaced that dwelling-house, likewise satisfy that condition as it has effect by virtue of subsection (8).

(10) Subsection (6) shall not apply to a case falling within subsection (8), but the extent of the exemption under this section in such a case shall, where the donee or successor had not attained the age of 55 years at the date of the gift or at the date of the inheritance, not exceed what it would have been had the replacement of one dwelling-house by another referred to in subsection (8), or any one or more of such replacements, taken place immediately prior to that date.

Exemption of certain benefits.

[FA 1982 s98]

87. —Where a gift or an inheritance is taken, by direction of the disponer, free of tax, the benefit taken is deemed to include the amount of tax chargeable on such gift or inheritance but not the amount of tax chargeable on such tax.

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

[FA 1997 s142(1) and (2)]

88. —(1) Notwithstanding any other provision of this Act, a gift or inheritance 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 is exempt from tax and is not taken into account in computing 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,

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

(e) to an order or other determination to like effect, made on or after 10 February 2000, which is analogous to an order referred to in paragraph (a), (b), (c) or (d), of a court under the law of another territory made under or in consequence of the dissolution of a marriage, being a dissolution that is entitled to be recognised as valid in the State.