The Gazette 1984

INCORPORATED LAW SOCIETY OF IRELAND GAZETTE

Vol. 78 No. 4

May 1984

Comment

In this issue

A New Iniquity

T HE new aggregation rules for Capital Acquisitions Tax proposed in the 1984 Finance Bill suggests that the Revenue is less concerned with pursuing those who evade tax and more with imposiong even greater burdens and obligations on those already within the tax net. The records which individuals would have to keep in order that appropriate returns of gifts and inheritances be made are not in practice kept by individuals. It is only when the financial affairs of a person's estate or trust are managed by professional administrators, be they solicitors, accountants or trustee departments, that adequate records might be available. The proposed legislation is bound to lead to further evasion, both accidental and deliberate. The black economy will gain further devotees as the suit-case rather than the settlement becomes the vehicle for gifts. As Capital Acquisitions Tax moves rapidly away from its initial simplicity many lay people have, not unreason- ably, abandoned all attempts to keep abreast of its radical changes. The "£150,000 threshold" has become as fixed in the general subconscious as the need for "furnished lettings" used to be. If the ordinary house-owning tax payer realised how seriously the present proposals erode this threshold they would be deluging their TDs with objections to the proposals. Two examples of the changes should suffice to high- light the problem: 1. If a brother dies leaving his sister a half interest in a commercial property which is let to a tenant with a capital value of £20,000 no tax will be payable on the gift because the first £20,000 of such gift is exempt as a gift between Table 2 Categories of persons. If later the sister's husband dies leaving her a house valued at £40,000 and a pension with a capitalized value of £20,000 (a total of £60,000 but with no liquid assets) tax will be payable at the level of £5,000 because the normal spouses £150,000 threshold will have been largely nullified by the previous use of the Table 2 threshold on the earlier gift from the brother. 2. If a widow has inherited a house and pension from her husband valued at £60,000, she not having received any previous gifts or inheritance, no tax will be payable. If she subsequently receives a legacy of £500 from a neighbour tax will immediately be payable amounting to £100.

Comment

95

Judicial Application of Salomon's Case in Ireland

97

Education Note

103

Solicitors' Benevolent Association

105

Practice Notes

107

For Your Diary

107

The Uncertain and Crooked Cord of

Discretion — Some reflections on Furniss v. Dawson

109

Finance Bill, 1984. Submissions of Law Society's Taxation Committee

115

Correspondence

117

Professional Information

118

Executive Editor: Mary Buckley Editorial Board:

William Earley, Chairman John F. Buckley Gary Byrne Charles R. M. Meredith Michael V. O'Mahony Maxwell Sweeney

Advertising:

Liam O hOisin, Telephone 305236

Printing: Turner's Printing Co. Ltd., Longford The views expressed in this publication, save where other-wise indicated, are the views of the contributors and not necessarily the views of the Council of the Society. The appearance of an advertisement in this publication does not necessarily indicate approval by the Society for the product or service advertised.

Published at Blackhal! Place. Dublin 7.

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