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GAZETTE
SEPTEMBER 1992
the inheritance and the insured.
Section 130, therefore, provides relief
to such cases by extending the relief
to dispositions made by the spouse
of the insured where both die within
31 days.
At this stage, the legislation
governing section 60 policies was
sufficiently extended to cover most
situations where an inheritance tax
liability would arise. However, no
provision was made for those
disponers who wished to transfer
assets during their lifetime.
Finance Act, 1991 - Section 119
Section 119 of the 1991 Finance Act,
introduced relief for certain life
assurance policies, to enable the
proceeds to be exempt from gift or
inheritance tax, to the extent that the
proceeds are used to pay gift tax or
inheritance tax, in connection with a
lifetime gift made by the insured
within one year of the proceeds of
the policy becoming payable. The
legislation requires a minimum
funding period for gift tax of 8
years. This means that the proceeds
of the policy cannot be used for any
assets transferred within this period.
In addition to this the Revenue have
issued strict guidelines, in terms of
encashments taken from policies, and
if not adhered to correctly, the policy
could become non-qualifying. This
section has also extended the use of
existing section 60 policies to be
used for the purposes of providing
for gift tax.
At this stage, there is reasonably well
developed legislation to cater for
most inheritance tax and gift tax
scenarios, which allows for a certain
amount of flexibility in the provision
and use of section 60 and section
119 policies. However, it should be
stressed that timing is of the essence
in the use of such products for CAT
planning. Time and time again,
situations arise where a policy
cannot be effected due to age or ill
health. The best advice is to
act now
and identify those clients who may
have a CAT problem and to plan
accordingly.
q
Computerised Directory Service - Caution
The Chairman of the Society's
Registrar's Committee,
Gerard
Griffin,
is advising members of the
profession to exercise caution if they
are approached to subscribe to a
computerised directory service. This
follows reports that a number of
solicitors in the Dublin area have
been approached by an enterprise
variously called Channel 7/
Eurovision/European Business
Bureau.
According to a recent article in the
England and Wales Law Society
Gazette, Channel 7 has been the
subject of dissatisfaction amongst a
number of solicitors in England and
Wales. Representatives from ten
English firms told of their
experiences of having been canvassed
to subscribe to an electronic
advertising facility at a cost of up
to £1,000 in the expectation of
obtaining referrals. None of the
firms, according to the author of the
article,
Evlynne Gilvarry,
reported
receiving any referrals on foot of
their subscriptions.
Recently a Dublin solicitor,
Paul
O'Shea,
contacted the Law Society at
Blackhall Place to say that he had
been approached by a sales
representative from Channel 7 (UK)
Limited. "The gentleman's sales pitch
was that his company required a firm
of solicitors in Dublin for listing on
his company's view data and
information network. He explained
that Channel 7 was very choosy as to
what firms they would list because
they wished to protect their own
reputation. Our meeting started by
way of an interview whereby the
representative asked me many
questions about our firm".
Mr. O'Shea said that he then
became suspicious and when the
representative gave him a copy of a
letter written by the English Law
Society he decided to phone the
English Society's headquarters in
London to check up on the
situation. The Law Society of
England and Wales has stated that it
does not recommend
services or products unless it has
been directly involved in their design.
Mr. O'Shea was informed that this
was not the case with Channel 7.
The letter issued by the Law Society
was one from the Society's Ethics
Committee pointing out that
subscribing to Channel 7's electronic
advertising facility would not breach
the solicitors introduction and
referral code, which, in any event,
would have no application to foreign
lawyers and that it was not a letter
of endorsement.
Paul O'Shea is not the first Irish
solicitor to be approached. Another
Dublin firm of solicitors has notified
the Society that it too was
approached (last Autumn) by a firm
called Eurovision styling itself as
"information providers on Channel
7". A principal in the firm said,
"We were told by Eurovision that we
had been selected on the basis of
our reputation. We paid over a total
of £602.58, including the VAT, for a
six months subscription. We heard
nothing from them since although
we had written to them three times
seeking a hard copy confirmation of
the text that it was agreed would
appear on screen about us. Finally I
did receive a letter stating that
Eurovision had gone into
liquidation."
Paul O'Shea reports a similar
method of approach by the
representative of Channel 7. "He
informed me that our firm was
shortlisted from a list of ten firms
and that he had no interest in having
any other firm than ours on the
listing". Paul O'Shea said that
notwithstanding this sales pitch, he
has little doubt that other Irish
solicitors will be targetted.
Gerard Griffin, Chairman of the
Registrar's Committee, says
"Obviously, it makes sense for
solicitors to check out as fully as
possible the credentials of any
person or company who approaches
them offering services of this kind".
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