The Gazette 1979

GAZETTE

APRIL 1979

liability at the date of distribution and further incurring a

potential Capital Gains Tax liability in th*$e circum-

stances. Nevertheless, if Executors have discretion, par-

ticularly where for example the deceased's Will leaves the

residue on Discretionary Trust for the benefit of a class of

beneficiaries, the Trustees could in that situation

subsequent to the date of death acquire Irish Govern-

ment Stocks which could be appointed out to non resident

beneficiaries, free of Tax after a three year period. This

type of saving may, of course, have a limited effect only

and care must be taken in such instances to exercise the

discretion in an overall sense equitably since to do so

otherwise would probably not be in accord with the

Testator's wishes and Could cause family friction. Never-

theless, where the Trustees have discretion, it can be a

means of at least providing time to think and to consider

what savings might be achieved or indeed in the context

of further reliefs being provided by amendments to the

legislation at a later date, it is possible that these could be

availed of.

CONCLUSION

Having gone through the process of administering the

Estate and discharging a minimum Tax liability i.e. all

aspects of the administration fully completed, it is

appropriate to comment on some aspects of Capital

Acquisition Tax law as will arise in matters other than

Estate administration — quite specifically in relation to

conveyancing and the transfer of property.

Section 47 of the Act gives the Revenue the right to

charge the Tax against the relevant property to

supplement the right against the accountable persons. The

charge affects all property other than money or negotiable

instruments and attaches to the property at the valuation

date i.e. the date of transfer. Thus, sales in the course of

administration are not inhibited by the charge which

would attach to the proceeds of sale which form part of

the inheritance at the date of rétainer (valuation date).

It will be noted, therefore, that where death appears on

a title, this is no longer indicative that a charge to Tax has

arisen. However, if there is an Assent or assignment of

the property to a person who is clearly a beneficiary

under the Will, then a Clearance Certificate should be

obtained.

On the other hand, if the property was sold by the

Executor in the course of administration, then the

property did not form part of the inheritance since the

proceeds effectively comprised the inheritance and not the

property itself. This is perhaps somewhat of a technicality

on which one should not rely, the practitioner would be

well advised to seek a Certificate.

Finally, insofar as the overall subject matter is con-

cerned, it must be remembered that in a paper of this

nature, one cannot spell out effusively all the detailed pro-

visions for practical application, and further, that at this

early date practice is only beginning to evolve and that it

will take many years before a volume of experience or

case law emerges in the light of which there will be much

greater wisdom than this.

In the meantime, this commentary on certain aspects

of C.A.T. will, it is hoped, act as a reminder in avoiding

pitfalls on the one hand and provide Tax saving

opportunities on the other to those concerned with all

aspects of asset preservation and succession, whether that

be in a pre death situation when discussing Wills or post

death in the course of administering Estates.