Finance Act 2013

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Personal Insolvency Act 2012: consequential amendments relating to tax.

100.— (1) The Taxes Consolidation Act 1997 is amended—

(a) in section 71 by inserting the following after subsection (4A):

“(4B) Income arising to a person from property situated outside the State which, if it had arisen from property in the State, would be chargeable under Case V of Schedule D shall include income from any such property outside the State transferred by that person to another person to hold in trust pursuant to the terms of a Debt Settlement Arrangement or a Personal Insolvency Arrangement entered into under the Personal Insolvency Act 2012 .”,

(b) in section 96(1) by substituting the following for the definition of “the person chargeable”:

“ ‘the person chargeable’ means the person entitled to the profits or gains arising from—

(a) any rent in respect of any premises, and

(b) any receipts in respect of any easement,

and for the purposes of this definition a debtor, within the meaning of section 2 of the Personal Insolvency Act 2012 , who transfers property to a person to hold in trust pursuant to the terms of a Debt Settlement Arrangement or a Personal Insolvency Arrangement entered into under that Act, shall be treated as remaining entitled to such profits or gains arising during the period in which the property is held in trust by that person;”,

(c) in section 311 by inserting the following after subsection (3):

“(3A) For the purposes of subsection (3), any transfer of property by a person to another person, pursuant to a Debt Settlement Arrangement or a Personal Insolvency Arrangement entered into under the Personal Insolvency Act 2012 , whereby such property is held in trust for the creditors of the person making the transfer shall not, where that property is an industrial building or structure (within the meaning of section 268), be treated as an exchange of property.”,

(d) in section 372AP by inserting the following after subsection (7):

“(7A) For the purposes of subsection (7), any transfer of property by a person to another person, pursuant to a Debt Settlement Arrangement or a Personal Insolvency Arrangement entered into under the Personal Insolvency Act 2012 , whereby such property is held in trust for the creditors of the person making the transfer shall not, where that property is a house which is a qualifying premises or a special qualifying premises, be treated as the passing of the ownership of the lessor’s interest in that property to another person.”,

and

(e) by substituting the following for section 569:

“569.— (1) In this section—

‘deed of arrangement’ means a deed of arrangement to which the Deeds of Arrangement Act 1887 applies;

‘insolvent person’ means an individual who is insolvent and who has entered into a Debt Settlement Arrangement or a Personal Insolvency Arrangement (both within the meaning of section 2 of the Personal Insolvency Act 2012 ) with his or her creditors;

‘relevant person’ means a personal insolvency practitioner (within the meaning of the Personal Insolvency Act 2012 ) who holds the assets of an insolvent person in trust for the benefit of creditors of that insolvent person under a Debt Settlement Arrangement or a Personal Insolvency Arrangement (both within the meaning aforesaid).

(2) In relation to assets held by a person as trustee or assignee in bankruptcy or under a deed of arrangement or by a relevant person, the Capital Gains Tax Acts shall apply as if the assets were vested in, and the acts of the trustee, assignee or relevant person in relation to the assets were the acts of, the bankrupt, debtor or insolvent person (acquisitions from or disposals to such person by the bankrupt, debtor or insolvent person being disregarded accordingly), and tax in respect of any chargeable gains which accrue to any such trustee, assignee or relevant person shall be assessable on and recoverable from such trustee, assignee or relevant person.

(3) Assets held by a trustee or assignee in bankruptcy or under a deed of arrangement or by a relevant person at the death of the bankrupt, debtor or insolvent person shall for the purposes of the Capital Gains Tax Acts be regarded as held by a personal representative of the deceased, and—

(a) subsection (2) shall not apply after the death, and

(b) section 573(2) shall apply as if any assets held by a trustee or assignee in bankruptcy or under a deed of arrangement or by a relevant person at the death of the bankrupt, debtor or insolvent person were assets of which the deceased was competent to dispose and which then devolved on the trustee or assignee in bankruptcy or the relevant person as if the trustee or assignee in bankruptcy or the relevant person were a personal representative.

(4) Assets vesting in a trustee in bankruptcy or a relevant person after the death of the bankrupt, debtor or insolvent person shall for the purposes of the Capital Gains Tax Acts be regarded as held by a personal representative of the deceased, and subsection (2) shall not apply.”.

(2) The Capital Acquisitions Tax Consolidation Act 2003 is amended in section 82(1) by inserting the following after paragraph (ca):

“(cb) any benefit arising out of the discharge of a debt under a Debt Relief Notice (within the meaning of section 25 of the Personal Insolvency Act 2012 ) or arising out of the discharge or reduction in the amount of a debt under a Debt Settlement Arrangement or a Personal Insolvency Arrangement (both within the meaning of section 2 of that Act) other than by reason of payment of that debt;”.

(3) The Personal Insolvency Act 2012 is amended—

(a) in section 65(2)(e) by inserting the following after subparagraph (i):

“(ia) make provision for the payment of all tax liabilities incurred by the debtor, or by the personal insolvency practitioner, under the Taxes Consolidation Act 1997 during the administration of the Arrangement and—

(I) such tax liabilities of the personal insolvency practitioner shall be payable in priority to any payments to creditors, and

(II) any failure by the debtor to comply with the terms of the provision shall be a breach of the Arrangement such that the Collector-General (within the meaning of the Taxes Consolidation Act 1997 ) may withdraw his or her agreement under section 58 to accept the compromise contained in the Arrangement,”,

and

(b) in section 99(2)(f) by inserting the following after subparagraph (i):

“(ia) make provision for the payment of all tax liabilities incurred by the debtor, or by the personal insolvency practitioner, under the Taxes Consolidation Act 1997 during the administration of the Arrangement and—

(I) such tax liabilities of the personal insolvency practitioner shall be payable in priority to any payments to creditors, and

(II) any failure by the debtor to comply with the terms of the provision shall be a breach of the Arrangement such that the Collector-General (within the meaning of the Taxes Consolidation Act 1997 ) may withdraw his or her agreement under section 92 to accept the compromise contained in the Arrangement,”.

(4) (a) Paragraphs (a), (b), (c) and (d) of subsection (1) and subsection (3) apply on and from the date of the passing of this Act.

(b) Paragraph (e) of subsection (1) applies to disposals made on or after the date of the passing of this Act.

(c) Subsection (2) applies to gifts and inheritances (both within the meaning of the Capital Acquisitions Tax Consolidation Act 2003 ) taken on or after the date of the passing of this Act.