347 / 482
GAZETTE.
SEPTEMBER 1989
latter assets would not qualify for
the relief. The non-qualifying assets
would be treated as being taken
from an uncle, rather than from a
father, wi th the normal exemption
of £20,000. These assets would
then be aggregated wi th the other
assets deemed to be taken from a
father, in the normal way, for the
purposes of calculating tax.
Shares are defined in Section 2
of the Act as "any interest what-
soever in the company which is
analogous to a share in the
company". This would include
preference shares. It would also
appear that, provided the company
is a private trading company within
the meaning of Section 16, CATA
1976, the company may own
assets wh i ch wo u ld not be
regarded as assets of the trade, for
example, the proceeds of insurance
on executives or shares in other
companies.
3. Anti-avoidance
Under Paragraph 9, as newly
enacted, the relief is not available
to benefits taken under a dis-
cretionary trust. Where there is a
discretionary trust, a person does
not receive a taxable inheritance
until property is appointed to him
by the trustees. The date of the
disposition is the date of the trust.
Accordingly it would be open to a
nephew to work for five years up
to the creation of a discretionary
trust and then to put the property
in "cold storage" for some time, to
be appointed out to him subse-
quently wi th the benefit of the
relief. The anti-avoidance provision
prevents this.
4. Capital Gains Tax
Section 26, Capital Gains Tax Act
1975, contains a relief similar to
Paragraph 9 as originally enacted.
This relief has not been changed by
Section 83 FA 1989.
Generally speaking, there is no
charge to Capital Gains Tax on
property passing on death. A gift is
deemed to be a disposal of assets
which is liable to tax in the normal
way. However, if a disponer gifts
property to a child during his life-
time, the charge to tax which
would otherwise arise may be
avoided in certain circumstances.
Relief is granted if the gift is of
business assets and the individual
is aged 55 years or more, provided
that certain conditions are fulfilled.
This is known as "Retirement
Relief". If the disposal is to a child
as defined, there is no charge to
Capital Gains Tax.
For the purpose of "Retirement
Relief", Child is defined as includ-
ing: " . . . a nephew or a niece who
has worked sustantially on a full-
time basis for the period of five
years ending wi th the disposal in
carrying on or assisting in the
carrying on of the trade, business
or profession concerned or the
work of or connected wi th the
office or employment concerned".
Business assets are defined as
assets used in the course of a trade,
farming, a profession, an office or
an employment which the person
making the disposal has owned for
a period of not less that ten years
ending on the date of the disposal.
The conditions of "Retirement
Relief" are the same as those
under the old Paragraph 9, except
that the period of five years must,
in the case of "Retirement Relief",
end on the date of disposal. The
assets must also have been owned
by the uncle for a period of
ten
years.
Accordingly, a nephew may in
certain circumstances, qualify for
both reliefs. The interaction of the
new Paragraph 9 and Section 26
CGTA 1975 remains to be seen and
it may be that a person might
Contd. on page 330.
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Bord Fáilte
Irish lourist Board
Baggot Street Bridge, Dublin 2. Tel: (01) 765871.
325