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GAZETTE
JANUARY/FEBRUARY 1988
of his three children B, C and D. B
attains the age of 25 years in
1974, C in 1976 and D in 1979. In
1987 A dies. The date of his death
is " t he date of the inheritance" and
the appropriate valuation date:
s.106(1) (b) and s.107(b)(i) FA
1984.
Example (9)
In 1970 H effects a policy on the
joint lives of himself and his wife W
which he settles on discretionary
terms for the benefit of his three
children X, Y and Z, all of whom are
then over the age of 25 years. H
dies in 1980 and W in 1987. The
policy does not "ma t u r e" as men-
tioned in s.32(1) CATA 1976 until
the death in 1987 of the survivor
of H and W, whereupon the pro-
ceeds of the policy become "pro-
pe r t y" for the purposes of the
one-off inheritance tax of 3%
payable by reason of s. 106(1) FA
1984. The " d a t e " of the in-
heritance" in relation to the pro-
ceeds is the date of W's (not H's)
death, and this is the appropriate
valuation date: s.106(1)(a) and
s.107(b)(i) FA 1984.
Example (10)
T dies in 1980 leaving his prop-
erty by will upon discretionary
trusts for the benefit of his three
children, A, B and C, of whom C is
the only one then under the age of
25 years. The administration of T's
estate is concluded on 31st March
1982 and on 1st May 1985 C
attains the age of 25 years. The ad-
ministration of T's estate is con-
cluded on 31 st March 1982 and on
1 st May 1985 C attains the age of
25 years. The date upon which he
does so is " t he date of the in-
heritance" and the appropriate
valuation date: s. 106(1 )(c) and
s.107(b)(i) FA 1986.
Example (11)
Facts as in Example (10) above,
except that the administration of
T's estate is not concluded until
31st March 1987, by which time
C has attained the age of 25 years,
upon which date the trust is deem-
ed under s. 106( 1) to have becom-
ed
bene f i c i a l ly
en t i t l ed
in
possession to the trust property
and to have to have taken an in-
heritance. However, the "delivery
payment or other satisfaction or
discharge'.'to the successor (i.e. to
the trust: s. 106(1) FA 1984) "of the
subject matter of the inheritance"
does not take place until 31st
March 1987: s.21(4)(c) CATA
1976. This date, and not 1st May
1985, is the appropriate valuation
date: s.107(b)(ii) FA 1984.
The appropriate valuation date in
relation to the inheritance tax of
1 % levied annually on each 5th
April by reason of s. 103(1) FA
1986 is normally that 5th April:
s;104(b)(i) FA 1986."»
There is provision, based on s. 12
Wealth Tax Act 1975, for the
valuation of property on a particular
5th April to be agreed with the
Revenue, and for the value so
agreed to hold good for the 5th
April in the next t wo years follow-
ing: s.107(1) 1986.
Accountability
In the normal course of events,
the party primarily accountable for
inheritance tax is the " successo r"
himself: s.35(1)(a) CATA 1976. In
the context of the once-off in-
heritance tax of 3% imposed by
s. 106(1) FA 1984 and the annual
inheritance tax of 1 % imposed by
s. 103(1) FA 1986 a kind of fiscal
Frankenstein monster is deemed to
be the successor, made up out of
the trust itself together wi th its
trustees."" The Irish Parliamentary
Draftsman, rightly suspecting that
his statutory creation would be as
allergic to the payment of in-
he r i t ance t ax as its literary
predecessor, wisely provided in
s. 107(c) FA 1984 and s. 104(c) FA
1986 that the trustees at the date
of the inheritance"" were to be
primarily accountable for any in-
heritance tax payable under the
abovementioned provisions.
As a precautionary measure, he
went on to provide that appointees
of the trust property were also to
be accountable, if the appointment
took place subsequently to the
date upon which the tax became
payable: s. 107(c) FA 1984.
Returns
The trustees are required by
s. 107(e) FA 1984 and s. 104(e) FA
1986 to file a return of the trust
property within three months of
the appropriate valuation date. In
the case of the annual inheritance
tax of 1% imposed by s. 103(1) FA
1984 they are also required to
es t ima te t he i nhe r i t ance t ax
payable and to pay the tax so
estimated over to the Accountant-
General when filing the return:
s.104(e)(ii) and (iii) FA 1986.
Payment
The once-off inheritance tax of
3% imposed by s. 106(1) FA 1984
normally becomes payable on the
valuation date, as defined in
s. 107(b) FA 1984: s.41(1) CATA
1976, as modified for the purpose
of the tax by s. 107(f).
The annual inheritance tax of 1 %
imposed by s. 103(1) FA 1986
likewise becomes payable on the
valuation date, defined in this con-
text as 5th April in each year in
which the tax becomes payable:
s.41 (1) CATA 1976, as modified
for the purposes of the tax by
s. 104(f) FA 1986 and s.102 FA
1986. As mentioned above, a pay-
ment on account of the tax payable
is required to be made by the
trustees when filing the requisite
annual return: s.104(e)(ii) and (iii)
FA 1986.
Charge for inheritance tax
The provisions of s. 107 FA 1984
and s. 104 FA 1986 modify or sup-
plant altogether the normal provi-
sions in s.35(1), s.36(2) (3) (4) and
(5) and s.45 CATA 1976 regarding
accountability for, returns relating
to, and payment of inheritance tax.
They do not affect the provisions
of s.47 and s.48 CATA 1976,
which provide that inheritance tax
is to be a charge on property com-
prised in an inheritance and
authorise the Revenue Commis-
sioners to issue a certificate of
discharge in relation to such pro-
perty. The provisions accordingly
apply to trust property subject to
the once-off inheritance tax of 3%
imposed by s. 106( 1) FA 1984 and
to the annual inheritance tax of 1 %
imposed by s. 104(1) FA 1986 in
the same way as they apply to in-
heritance tax payable otherwise
than under these sections.
Exemptions
S.108 FA 1984 and s.105 FA
1986 exempt a number of trusts
which would otherwise be "discre-
tionary t r us t s" as defined in s.105
FA 1984 and accordingly subject
to the once-off inheritance tax of
3% imposed by s. 106(1) FA 1984
and the annual inheritance tax of
1 % imposed by s. 103( 1) FA 1986.
The trusts so exempted include
charitable trusts, trusts for the
upkeep of houses and gardens of
national scientific historic or artistic
interest and last, but by no means
least, trusts for the benefit of in-
dividuals incapable of managing
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