The Gazette 1984

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INCORPORATED LAW SOCIETY OF IRELAND
GAZETTE
Vol. 78 No. 4 May 1984
In this issue Comment
A New Iniquity
Comment 95
Judicial Application of Salomon's Case
in Ireland 97
The Uncertain and Crooked Cord of
Discretion — Some reflections on Furniss v.
Dawson 109
Finance Bill, 1984. Submissions of Law
Society's Taxation Committee 115
Correspondence 117
Executive Editor: Mary Buckley
Editorial Board: William Earley, Chairman
John F. Buckley
Gary Byrne
Charles R. M. Meredith
Michael V. O'Mahony
Maxwell Sweeney
Advertising: Liam O hOisin, Telephone 305236
Printing: Turner's Printing Co. Ltd., Longford
The views expressed in this publication, save where
other-wise indicated, are the views of the contributors
and not necessarily the views of the Council of the
Society.
The appearance of an advertisement in this publication
does not necessarily indicate approval by the Society for
the product or service advertised.
THE new aggregation rules for Capital Acquisitions
Tax proposed in the 1984 Finance Bill suggests that
the Revenue is less concerned with pursuing those who
evade tax and more with imposiong even greater burdens
and obligations on those already within the tax net. The
records which individuals would have to keep in order
that appropriate returns of gifts and inheritances be made
are not in practice kept by individuals. It is only when the
financial affairs of a person's estate or trust are managed
by professional administrators, be they solicitors,
accountants or trustee departments, that adequate
records might be available.
The proposed legislation is bound to lead to further
evasion, both accidental and deliberate. The black
economy will gain further devotees as the suit-case rather
than the settlement becomes the vehicle for gifts.
As Capital Acquisitions Tax moves rapidly away from
its initial simplicity many lay people have, not unreason-
ably, abandoned all attempts to keep abreast of its radical
changes. The "£150,000 threshold" has become as fixed in
the general subconscious as the need for "furnished
lettings" used to be. If the ordinary house-owning tax
payer realised how seriously the present proposals erode
this threshold they would be deluging their TDs with
objections to the proposals.
Two examples of the changes should suffice to high-
light the problem:
1. If a brother dies leaving his sister a half interest in a
commercial property which is let to a tenant with a
capital value of £20,000 no tax will be payable on
the gift because the first £20,000 of such gift is
exempt as a gift between Table 2 Categories of
persons. If later the sister's husband dies leaving her
a house valued at £40,000 and a pension with a
capitalized value of £20,000 (a total of £60,000 but
with no liquid assets) tax will be payable at the level
of £5,000 because the normal spouses £150,000
threshold will have been largely nullified by the
previous use of the Table 2 threshold on the earlier
gift from the brother.
2. If a widow has inherited a house and pension from
her husband valued at £60,000, she not having
received any previous gifts or inheritance, no tax
will be payable. If she subsequently receives a legacy
of £500 from a neighbour tax will immediately be
payable amounting to £100.
Published at Blackhal! Place. Dublin 7. (continued on p.101)
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