The Gazette 1994

GAZETTE

NOVEMBER 1994

discussions will ensue with the

Revenue Commissioners.

However, the fact that it is a

purchaser

who is protected under section 53(3)

means that this would not protect an

individual who accepts a gift of property

from a person in whom the property has

been vested by way of assent as the

nominated beneficiary of a family in the

sort of scenario outlined above.

You can see from the above that the

situation

disclaimers on intestacy is

indeed complex and controversial.

The Law Society Taxation and

Conveyancing Committees have

considered the question in depth as

both Committees are aware of the

problems posed for practitioners.

These Committees endeavoured to

obtain Revenue approval for a deed

which perhaps could best be termed a

"quasi estoppel" deed under which the

persons entitled would acquiesce in

the personal representatives

transferring the property to one of the

beneficiaries and would agree not to

make any future claim against the

estate. The deed would operate as an

estoppel enabling the legal personal

representative to execute an assent.

It was hoped that such a deed would

have no tax consequences (neither

stamp duty nor CAT).

Initially, it appeared that this move was

going to be successful. It has however

transpired that the Revenue are not now

amenable to the type of deed which

would be necessary in order to satisfy

the Conveyancing Committee; such a

deed would probably have to release an

interest which would be conveyed to

someone to hold.

Let us assume that you are faced with

the following typical situation: all of

the children of a deceased person are

equally entitled on intestacy to the only

or main asset which is the family home.

Assuming that the spouse predeceased

it may be that all of the children will

want the child who looked after the

parent and resided with him/her to get

the house absolutely.

The only

absolutely

safe way to

proceed (i.e. to protect your client the

personal representative and to satisfy

the requirements of all future

conveyancing colleagues in a

subsequent sale/voluntary disposition

by the nominated beneficiary) is to

execute a deed of assent/family

arrangement with the consequent

stamp duty and gift tax implications.

If you decide to proceed with a

disclaimer you run the risk of not

satisfying certain future conveyancing

colleagues (i.e. those subscribing to

the second school of thought referred

to previously) and clearly if you

yourself subscribe to this second

school of thought, you will not rest

easy in the knowledge that the State

might possibly succeed to the interest

being disclaimed.

We are now back to the drawing board,

so to speak, and unfortunately both the

Conveyancing Committee and the

Taxation Committee find themselves

to-date unable to issue a definitive

statement of practice on the validity of

the use of disclaimers in such

situations. However, both Committees

are liaising with each other and hope to

soon be in a position to issue a practice

note to the profession.

In the meantime, practitioners who

consult the Taxation Committee on this

point are being advised that the

negotiations with the Revenue

Commissioners are as yet inconclusive

and that they should therefore obtain

counsel's opinion if proceeding on the

basis of a disclaimer.

The Law Society has recently made

recommendations to the Minister for

Finance that a provision be inserted

into the Finance Bill which would

have an effect similar to that already

in existence for Capital Gains Tax

purposes and contained in section 14

(6) of the Capital Gains Tax Act,

1975. Such provision would provide

that where within a two year period

after death, any of the dispositions of

the property of which the deceased

was competent to dispose, whether

effected by will, or under the law

relating to intestacies, or otherwise,

are varied by a deed of family

arrangement of similar instrument,

then such variations made by the deed

or other instrument shall be treated for

the purposes of capital acquisitions

tax and stamp duty as if they were

effected by the deceased and as if no

disposition had been made by the deed

or other instrument for the purposes of

the Capital Acquisitions Tax Act,

1976 and the Stamp Act, 1891. The

Society further recommended that

where the children are minor children,

the two year period should begin on a

child's eighteenth birthday.

It is to be hoped that the Minister will

respond favourably.

* Raphael King, Solicitor, is a

consultant on the administration

estates for the Law Society's

Continuing Legal

Education

Programme.

R e s u l t s o f L a d y

S o l i c i t o r s G o l f

O u t i n g 1 9 9 4

Captain's Prize and Quinlan

Trophy:

1 st:

Gillian Gleeson

39 points

2nd:

Marian Petty

38 points

3rd:

Muriel Walls

36 points

Gross:

Barbara

Ceillier

34 points

Visitors:

1st:

Catherine

Black

45 points

2nd:

Fiona Bennett

37 points

The Sheila O'Gorman Trophy:

1st:

Jeanne Cullen

2nd:

Clodagh Liddy

First Nine:

Elaine Anthony

19 points

Second Nine:

Betty Connolly

21 points

Putting Competition:

1 st:

Catherine

Bradley

2nd:

Virginia

Rochford

Anne Crawford,

Hon Secretary.

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