352 / 482
GAZETTE.
SEPTEMBER 1989
CASTLETOWN
PRESS P.L.C.
Law Printing Specialists & Stationers
CELBRIDGE, CO. KILDARE
A N D
24, UPPER ORMOND QUAY
DUBLIN
T e l : ( 0 1 ) 2 7 1 1 7 0
Fax : ( 0 1 ) 2 7 2 3 4 5
Contd. from page 325.
qualify under the more favourable terms of
Section 26 and might not qualify under the new
Paragraph 9.
5. Conclusion
The "Favourite Nephew Relief" is a Very
significant one and can result in an elimination
of, or significant reduction in, a liability to Gift
or Inheritance Tax. A similar relief is available
from Capital Gains Tax. The broad interpretation
of the old Paragraph 9 in the case of
A.E. -v- The
Revenue Commissioners
has been curtailed by
Section 83 FA 1989 and a nephew must now
spend a minimum amount of hours per week in
the business before he will qualify as a favourite
nephew. At the same time as limiting the relief,
Section 83 has extended it to include certain life
settlements and rights of residence. These
changes take effect from 1st May 1989.
Practitioners should now review cases in which
clients may qualify for the relief, as the new
paragraph 9 offers considerable opportunities for
tax planning in respect of both Gift and
Inheritance Tax.
Notes:-
1 . The terms "uncle" and "nephew" are used throughout
this Article for convenience and include "aunt" and
"niece".
2. The new Paragraph 9 (2) states: "For the purpose of
computing the tax payable on a gift or inheritance the
donee or successor shall be deemed to bear to the
disponer the relationship of a child in any case where the
donee or successor is a child of a brother or a child of
a sister of the disponer and either
(a) The donee or successor has worked substantially on
a full-time basis for the disponer for the relevant
period in carrying on, or in assisting in carrying on,
the trade, business or profession of the disponer and
the gift of inheritance consists of property which was
used in connection with that business, trade or
profession; or
(b) The donee or successor has worked substantially on
a full-time basis for a company for the relevant period
in carrying on or in assisting in carrying on the trade,
business or profession of the company and the gift
or inheritance consists of shares in that company".
3. Paragraph 9, as originally drafted, stated: "In any case
where:
(a) The donee or successor is a nephew or niece of the
disponer who has worked substantially on a full-time
basis for the period of five years ending on the date
of the gift or the date of the inheritance in carrying
on or assisting in the carrying on of the trade,
business, or profession or the work of or connected
with the office or employment of the disponer; and
(b) The gift or inheritance consists of property "which
was used in connection with such trade, business,
profession or employment or of shares in a company
owning such property, then for the purpose of
computing the tax payable on the gift or inheritance
the donee or successor shall be deemed to bear to
the disponer the relationship of a child".
For a discussion see 'CAT-On Favourite Nephew Relief'
Gazette 79 IL Si 91, April 1985.
4 .
A.E. -v- The Revenue Commissioners
[1984] I.L.R.M.
301.
5. Ibid at p. 305.
6 . Ibid at p. 304.
7 . (1884) 27 Ch.D.
8 . [19841 I.L.R.M. 301 at p. 304.
9 . Ibid at p. 304.
1 0 . [1984] I.L.R.M. 303.
1 1 . Circuit Court - Unreported - June 1988 - Sheridan J.
1 2 . Appeal Commissioners - Unreported - January 1989.
A COMPREHENSIVE SERVICE
TO THE LEGAL PROFESSION
CASTLETOWN PRESS
CAN NOW OFFER AN EVEN BETTER SERVICE WITH
THE OPENING OF THEIR NEW STATIONERY, PRINT
SHOP AND COMPUTER SHOW ROOMS AT -
24, UPPER ORMOND QUAY, DUBLIN 7
% Law Stationery:
Letterheads (Raised or Flat), Business
Cards, VAT Invoices and all forms for
the Modern Solicitor's Office.
iir Office Equipment:
Computers, Wordprocessors,
Fax Machines, Dictating Machines,
Furniture, Typewriters, Photocopiers,
Calculators, Desks, Chairs, Spiral
Binding Machines and Supplies.
All Computer Sof tware and
Supplies for the Modern
Solicitor's Office:
Solicitor's Office Software includes:
• Cobra Legal Accounts
• Legal Precedents ®Debt Collection
• Conveyancing
• Litigation
• Wills and Probate.
All court forms and contracts, Requisitions
etc...to suit all IBM compatible machines.
Listing Paper
(Stock or to your own
requirements),
Ribbons, Binders Cabinets,
Trollies.
# Special Package Deal
for Solicitors Commencing Practice.
S e e us a t S T A N D 5 4
Lawtech Exhibition
Point Depot, 25 & 26 October, 1989
3 30