Finance Act, 1994

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Relevant business property.

127.—(1) In this Chapter and subject to the following provisions of this section and to sections 128 , 130 and 134 (3) “relevant business property” means, in relation to a gift or inheritance, any one or more of the following, that is to say:

(a) property consisting of a business or interest in a business;

(b) unquoted shares in or securities of a company incorporated in the State to which paragraph (c) does not relate, and which on the valuation date (either by themselves alone or together with other shares or securities in that company in the absolute beneficial ownership of the donee or successor on that date) give control of powers of voting on all questions affecting the company as a whole which if exercised would yield more than 25 per cent. of the votes capable of being exercised thereon;

(c) unquoted shares in or securities of a company incorporated in the State which on the valuation date (either by themselves alone or together with other shares or securities in that company in the absolute beneficial ownership of the donee or successor on that date) have an aggregate nominal value which represents 10 per cent. or more of the aggregate nominal value of the entire share capital and securities of the company, if but only if the company (after the taking of the gift or inheritance) is on that date a company controlled by the donee or successor within the meaning of section 16 of the Principal Act;

(d) unquoted shares in or securities of a company incorporated in the State which do not fall within paragraph (b) or (c) and which on the valuation date (either by themselves alone or together with other shares or securities in that company in the absolute beneficial ownership of the donee or successor on that date) have an aggregate nominal value which represents 10 per cent. or more of the aggregate nominal value of the entire share capital and securities of the company:

Provided that the donee or successor has been a full-time working officer or employee of the company, or if that company is a member of a group, of one or more companies which are members of the group, throughout the period of 5 years ending on the date of the gift or inheritance;

(e) in so far as is situated in the State, any land or building, machinery or plant which, immediately before the gift or inheritance was used wholly or mainly for the purposes of a business carried on by a company of which the disponer then had control or by a partnership of which the disponer then was a partner and for the purposes of this paragraph a person shall be deemed to have control of a company at any time if he then had control of powers of voting on all questions affecting the company as a whole which if exercised would have yielded a majority of the votes capable of being exercised thereon;

(f) quoted shares in or securities of a company which, but for the fact that they are quoted, would be shares or securities to which paragraph (b), (c) or (d) would relate:

Provided that such shares or securities, or other shares in or securities of the same company which are represented by those shares or securities, were in the beneficial ownership of the disponer immediately prior to the disposition and were unquoted at the date of the commencement of that beneficial ownership or at the date of the passing of this Act, whichever is the later date.

(2) Where a company has shares or securities of any class giving powers of voting limited to either or both—

(a) the question of winding-up the company, and

(b) any question primarily affecting shares or securities of that class,

the reference in subsection (1) to all questions affecting the company as a whole shall have effect as a reference to all such questions except any in relation to which those powers are capable of being exercised.

(3) A business or interest in a business, or shares in or securities of a company, shall not be relevant business property in relation to a gift or inheritance if, on the date of the gift or inheritance, the business or, as the case may be, the business carried on by the company was wholly or mainly carried on outside the State, and where the business concerned was carried on by a holding company, the business of that holding company shall be treated as having been carried on wholly or mainly outside the State on that date if that business and the business carried on by any subsidiary of that holding company were, taken as a whole, carried on wholly or mainly outside the State.

(4) A business or interest in a business, or shares in or securities of a company, shall not be relevant business property if the business or, as the case may be, the business carried on by the company consists wholly or mainly of one or more of the following, that is to say, dealing in currencies, securities, stocks or shares, land or buildings, or making or holding investments.

(5) Subsection (4) shall not apply to shares in or securities of a company if the business of the company consists wholly or mainly in being a holding company of one or more companies whose business does not fall within that subsection.

(6) Any land, building, machinery or plant in the beneficial ownership of the disponer and used wholly or mainly for the purposes of a business carried on as mentioned in subsection (1) (e) shall not be relevant business property in relation to a gift or inheritance taken by a donee or successor, unless the disponer's interest in the business is, or shares in or securities of the company carrying on the business immediately before the gift or inheritance are, relevant business property in relation to that gift or inheritance or in relation to a simultaneous gift or inheritance taken by that donee or successor from the same disponer.