376 / 406
GAZETTE
JANUARY/FEBRUARY 1985
provisions of the Local Government
(Planning and Development) Acts,
1963 to 1983, while at the same time
barring any claim to compensation by
the Claimant by reason of the
exclusion referred to in Section 56
(l)(b)(i) of the Local Government
(Planning and Development) Act,
1963".
The Court directed that the award be
remitted to the Arbitrator for the sole
purpose of considering the replies which
were given to the questions of law raised
in the case stated and confirming his
award in the light of such replies, if he
should think fit to do so. It appeared to
the Court that the replies which had been
formulated to these questions entitled the
claimant to receive the higher figure
referred to by the Arbitrator, but this
matter should, at least, be determined
initially by the Arbitrator.
John Meenaghan -v- Dublin County
Council [1984] ILRM 616 - High Court
(per O'Han!on J.). 14 Setpember, 1983 -
unreported.
Daniel Brilley
GIFT TAX
The exercise of a power of appointment
under a settlement which has the effect of
conveying the contingent interest of a third
party to the donee of the power constitutes
a benefit within the meaning of the
C
.A.T.
Act, 1976 and is thus chargeable with gift
tax.
By a Settlement dated 22 November
1955, the Appellant's father settled
certain funds on trust for the Appellant so
that the income should be accumulated
and added to the capital of the fund until
the Appellant attained the age of 30 and
thereafter the income to be paid to the
Appellant until 31 December 1985 or her
earlier death and, should she survive until
31 December 1985, the capital to be paid
to her absolutely.
Provision was also made for payment
of all or any part of the trust to the
Appellant once she reached the age of 30.
If the Appellant should die at any time
while all or any part of the trust fund
remained in the hands of the Trustee, the
Settlement provided that such funds
should be held in trust for her children or
if none, for the other children of the
Settlor, as therein provided.
The Appellant attained the age of 30 on
17 November 1962. By Deed dated 4
April 1978, the Trustees irrevocably
declared that they held the trust fund for
the benefit of the Appellant absolutely,
freed and discharged from the trusts of
the Settlement.
The Appellant submitted that she took
an absolute vested interest in the fund on
17 November 1962, subject only to
divesting in the event of her death before
31 December 1985. As all possibility of
divesting was removed by the Appoint-
ment, it was argued that the gift from the
Settlor was essentially taken on 17
November 1962 and that accordingly,
there was no liability to gift tax under the
C . A . T. Act, 1976. It was f u r t h er
submitted that this was the real nature of
the transaction and as such was what
mu st
be c o n s i d e r ed
— not
t he
conveyancing form, referring to the cases
of
theAttorney-General
-v-
Power
[1906]
2 I.R. 272 and
Ramsey
-v-
Inland Revenue
Commissioners
[1981] 2W.L.R. 449. In
further support of this argument, it was
pointed out that Section 20 of the C.A.T.
Act, 1976 provides for taxation on the
basis that the contingency will not
happen but makes provision for a
subsequent
a d j u s t me nt should
the
contingency in fact take place.
T h e R e v e n u e
C o m m i s s i o n e r s,
although not contesting that the interest,
taken by the Appellant on 17 November
1962 was a vested interest, argued that it
was a limited interest, and that the
Appointment on 4 April 1978 of the trust
fund constituted a gift chargeable to gift
tax of the said fund taken absolutely by
the Appellant on that date from the
Settlor.
H E L D :
H a v i ng r e g a rd
to
t he
definitions of 'benefit', 'property', and
'interest in expectancy' set out in the
C.A.T. Act, 1976, the Appellant took a
benefit within the meaning of Section 5 of
that Act by virtue of the Appointment of
4 April 1978. This benefit consisted of the
value of the interest of the children and
remoter issue of the Appellant contingent
on her death before 31 December 1985,
and constituted a gift liable to Gift Tax.
Brigid Kathleen Jacob
-v-
The Revenue
Commissioners
- High Court
(per
McWilliam J.). 6 July, 1983 -unreported.
Sarah Cox
Copies of judgments in the above
cases are available on request f r om
the Society's Library. The photo-
copying rate is lOp per page.
iv