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“Attribution of gains to beneficiaries.
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579A.—(1) (a) For the purposes of this section and the following sections of this Chapter, ‘capital payments’ means any payment which is not chargeable to income tax on the recipient or, in the case of a recipient who is neither resident nor ordinarily resident in the State, any payment received otherwise than as income, but does not include a payment under a transaction entered into at arm's length.
(b) In paragraph (a) references to a payment include references to the transfer of an asset and the conferring of any benefit, and to any occasion on which settled property becomes property to which section 567(2) applies.
(c) The amount of a capital payment made by way of loan, and of any other capital payment which is not an outright payment of money, shall be taken to be equal to the value of the benefit conferred by it.
(d) A capital payment shall be treated as received by a beneficiary from the trustees of a settlement if—
(i) the beneficiary receives it from the trustees directly or indirectly,
(ii) it is directly or indirectly applied by the trustees in payment of any debt of the beneficiary or is otherwise paid for the benefit of the beneficiary, or
(iii) it is received by a third party at the beneficiary's direction.
(2) Subject to subsection (10), this section shall apply to a settlement for any year of assessment during which the trustees are, at no time, neither resident nor ordinarily resident in the State.
(3) There shall be computed in respect of every year of assessment for which this section applies the amount on which the trustees would have been chargeable to capital gains tax under section 31 if they had been resident and ordinarily resident in the State in the year of assessment and that amount, together with the corresponding amount in respect of any earlier such year of assessment, so far as not already treated under subsection (4) or section 579F(2) as chargeable gains accruing to beneficiaries under the settlement, is in this section referred to as ‘the trust gains for the year of assessment’.
(4) Subject to this section, the trust gains for a year of assessment shall be treated for the purposes of the Capital Gains Tax Acts as chargeable gains accruing in the year of assessment to beneficiaries of the settlement who receive capital payments from the trustees in the year of assessment or have received such payments in any earlier year of assessment.
(5) The attribution of chargeable gains to beneficiaries under subsection (4) shall be made in proportion to, but shall not exceed, the amounts of capital payments received by them.
(6) A capital payment shall be left out of account for the purposes of subsections (4) and (5) to the extent that chargeable gains have, by reason of the payment, been treated as accruing to the recipient in an earlier year of assessment.
(7) A beneficiary shall not be charged to tax on chargeable gains treated by virtue of subsection (4) as accruing to him or her in any year of assessment unless he or she is domiciled in the State at some time in that year of assessment.
(8) For the purposes of this section a settlement arising under a will or intestacy shall be treated as made by the testator or, as the case may be, intestate at the time of death.
(9) In any case in which the amount of any capital gains tax payable by a beneficiary under a settlement in accordance with this section is paid by the trustees of the settlement, such amount shall not for the purposes of income tax or capital gains tax be regarded as a payment to the beneficiary.
(10) Subsection (2) shall not apply in relation to any year of assessment beginning before the 6th day of April, 1999, and the references in subsections (4) and (5) to capital payments received by beneficiaries do not include references to any payments received before the 11th day of February, 1999, or any payments received on or after that date so far as they represent a chargeable gain which accrued to the trustees in respect of a disposal by the trustees before the 11th day of February, 1999.
(11) Where this section applies so as to charge a person to tax on chargeable gains, section 579 shall not apply in respect of those chargeable gains.
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Trustees ceasing to be resident in the State.
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579B.—(1) In this section and in the following sections of this Chapter—
‘arrangements’ means arrangements having the force of law by virtue of section 826 (as extended to capital gains tax by section 828);
‘the new assets’ and ‘the old assets’ have the meaning assigned, respectively, to them by section 597(4).
(2) This section shall apply where the trustees of a settlement become at any time (hereafter in this section referred to as the ‘relevant time’) neither resident nor ordinarily resident in the State.
(3) The trustees to whom this section applies shall, for the purposes of the Capital Gains Tax Acts, be deemed—
(a) to have disposed of the defined assets immediately before the relevant time, and
(b) immediately to have reacquired them,
at their market value at that time.
(4) Subject to subsections (5) and (6), the defined assets are all assets constituting settled property of the settlement immediately before the relevant time.
(5) If immediately after the relevant time—
(a) the trustees carry on a trade in the State through a branch or agency, and
(b) any assets are situated in the State and either used in or for the purposes of the trade or used or held for the purposes of the branch or agency,
the assets falling within paragraph (b) shall not be defined assets.
(6) Assets shall not be defined assets if—
(a) they are of a description specified in any arrangements, and
(b) the trustees would, were they to dispose of them immediately before the relevant time, fall to be regarded for the purposes of the arrangements as not being liable in the State to tax on gains accruing to them on the disposal.
(7) Notwithstanding anything in that section—
(a) section 597 shall not apply where the trustees—
(i) have disposed of the old assets, or their interest in them, before the relevant time, and
(ii) acquire the new assets, or their interest in them, after the relevant time, and
(b) where under section 597 a chargeable gain accruing on a disposal of old assets is treated as not accruing until a time later (being the time that the new assets cease to be used for the purposes of a trade or other purposes as referred to in subsection (2) of that section) than the time of the disposal, and, but for this subsection, the later time would fall after the relevant time, the chargeable gain shall be treated as accruing immediately before the relevant time,
unless the new assets are excepted from the application of this subsection by subsection (8).
(8) If at the time when the new assets are acquired—
(a) the trustees carry on a trade in the State through a branch or agency, and
(b) any new assets, which immediately after the relevant time, are situated in the State and either used in or for the purposes of the trade or used or held for the purposes of the branch or agency,
the assets falling within paragraph (b) shall be excepted from the application of subsection (7).
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Death of trustee: special rules.
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579C.—(1) Subsection (2) applies where—
(a) section 579B applies as a result of the death of a trustee of a settlement, and
(b) within the period of 6 months beginning with the death, the trustees of the settlement become resident and ordinarily resident in the State.
(2) Section 579B shall apply as if the defined assets were restricted to such assets (if any) as—
(a) would be defined assets apart from this section, and
(b) fall within subsection (3).
(3) Assets fall within this subsection if they were disposed of by the trustees in the period which—
(a) begins with the death, and
(b) ends when the trustees become resident and ordinarily resident in the State.
(4) Where—
(a) at any time the trustees of a settlement become resident and ordinarily resident in the State as a result of the death of a trustee of the settlement, and
(b) section 579B applies as regards the trustees of the settlement in circumstances where the relevant time (within the meaning of that section) falls within the period of 6 months beginning with the death,
that section shall apply as if the defined assets were restricted to such assets (if any)—
(i) as would be defined assets but for this section, and
(ii) which the trustees acquired in the period beginning with the death and ending with the relevant time.
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Past trustees: liability for tax.
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579D.—(1) In this section ‘specified period’, in relation to a year of assessment, means the period beginning with the specified return date for the year of assessment (within the meaning of section 950) and ending 3 years after the time when a return under section 951 for the year of assessment is delivered to the appropriate inspector (within the meaning of section 950).
(2) For the purposes of this section—
(a) where the relevant time (within the meaning of section 579B) falls within the period of 12 months beginning with the 11th day of February, 1999, the relevant period is the period beginning with that day and ending with the relevant time, and
(b) in any other case, the relevant period is the period of 12 months ending with the relevant time.
(3) This section shall apply at any time on or after the 11th day of February, 1999, where—
(a) section 579B applies as regards the trustees (in this section referred to as ‘migrating trustees’) of a settlement, and
(b) any tax, which is payable by the migrating trustees in respect of a chargeable gain accruing to them for a year of assessment (in this section referred to as ‘the year of assessment concerned’) by virtue of section 579B(3), is not paid within 6 months after the date on or before which the tax is due and payable.
(4) The Revenue Commissioners may, at any time before the end of the specified period in relation to the year of assessment concerned, serve on any person to whom subsection (5) applies, a notice—
(a) stating the amount which remains unpaid of the tax payable by the migrating trustees for the year of assessment concerned, and
(b) requiring that person to pay that amount within 30 days of the service of the notice.
(5) This subsection applies to any person who, at any time within the relevant period, was a trustee of the settlement, other than such a person who—
(a) ceased to be a trustee of the settlement before the end of the relevant period, and
(b) shows that, when he or she (or in the case of a company, the company) ceased to be a trustee of the settlement, there was no proposal that the trustees might become neither resident nor ordinarily resident in the State.
(6) Any amount which a person is required to pay by a notice under this section—
(a) may be recovered by that person from the migrating trustees,
(b) shall not be allowed as a deduction in computing income, profits, gains or losses for any tax purposes, and
(c) may be recovered from that person as if it were tax due by such person.
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Trustees ceasing to be liable to Irish tax.
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579E.—(1) This section shall apply where the trustees of a settlement, while continuing to be resident and ordinarily resident in the State, become at any time (in this section referred to as ‘the time concerned’) on or after the 11th day of February, 1999, trustees who fall to be regarded for the purposes of any arrangements—
(a) as resident in a territory outside the State, and
(b) as not liable in the State to tax on gains accruing on disposals of assets (in this section referred to as ‘relevant assets’) which constitute settled property of the settlement and fall within descriptions specified in the arrangements.
(2) The trustees shall be deemed for all the purposes of the Capital Gains Tax Acts—
(a) to have disposed of their relevant assets immediately before the time concerned, and
(b) immediately to have reacquired them,
at their market value at that time.
(3) Notwithstanding anything in that section—
(a) section 597 shall not apply where—
(i) the new assets are, or an interest in them is, acquired by the trustees of a settlement,
(ii) at the time of the acquisition the trustees are resident and ordinarily resident in the State and fall to be regarded for the purposes of any arrangements as resident in a territory outside the State,
(iii) the assets are of a description specified in those arrangements, and
(iv) the trustees would, were they to dispose of the assets immediately after the acquisition, fall to be regarded for the purposes of the arrangements as not being liable in the State to tax on gains accruing to them on the disposal,
and
(b) where under section 597 a chargeable gain accruing on a disposal of the old assets is treated as not accruing until a time later (being the time that the new assets cease to be used for the purposes of a trade or other purposes as set out in subsection (2) of that section) than the time of the disposal, and but for this paragraph, the latter time would fall after the time concerned, the chargeable gain shall be treated as accruing immediately before the time concerned, if—
(i) the new assets are of a description specified in any arrangements, and
(ii) the trustees would, were they to dispose of the new assets immediately after the time concerned, fall to be regarded for the purposes of those arrangements as not being liable in the State to tax on gains accruing to them on the disposal.
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Migrant settlements.
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579F.—(1) Where a period (in this section referred to as ‘a non-resident period’) of one or more years of assessment for which section 579A applies to a settlement, succeeds a period (in this section referred to as ‘a resident period’) of one or more years of assessment for each of which section 579A does not apply to the settlement, a capital payment received by a beneficiary in the resident period shall be disregarded for the purposes of section 579A if it was not made in anticipation of a disposal made by the trustees in the non-resident period.
(2) Where—
(a) a non-resident period is succeeded by a resident period, and
(b) the trust gains for the last year of assessment of the non-resident period are not, or not wholly, treated as chargeable gains accruing to beneficiaries, then, subject to subsection (3), those trust gains, or the outstanding part of them, shall be treated as chargeable gains accruing in the first year of assessment of the resident period, to beneficiaries of the settlement who receive capital payments from the trustees in that year of assessment, and so on for the second and subsequent years until the amount treated as accruing to the beneficiaries is equal to the amount of the trust gains for the last year of assessment of the non-resident period.
(3) Subsections (5) and (7) of section 579A shall apply in relation to subsection (2) as they apply in relation to subsection (4) of that section.”.
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