Finance Act, 2000

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Amendment of section 12 (taxable inheritance) of Principal Act.

139.—(1) Section 12 of the Principal Act is amended by—

(a) the substitution of the following subsection for subsection (1):

“(1) In this Act, ‘taxable inheritance’ means—

(a) in the case where the disponer is resident or ordinarily resident in the State at the date of the disposition under which the successor takes the inheritance, the whole of the inheritance;

(b) in the case where the successor (not being a successor in relation to a charge for tax arising by virtue of section 106 of the Finance Act, 1984 , section 103 of the Finance Act, 1986 , or section 110 of the Finance Act, 1993 ) is resident or ordinarily resident in the State at the date of the inheritance, the whole of the inheritance; and

(c) in any case, other than a case referred to in paragraph (a) or (b), where at the date of the inheritance—

(i) the whole of the property—

(I) which was to be appropriated to the inheritance; or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, the whole of the inheritance;

(ii) a part or proportion of the property—

(I) which was to be appropriated to the inheritance; or

(II) out of which property was to be appropriated to the inheritance,

was situate in the State, that part or proportion of the inheritance.”,

(b) in subsection (2), by the substitution of “subsection (1)(c)” for “subsection (1)(b)”,

(c) the insertion of the following subsections after subsection (2):

“(3) For the purposes of subsection (1), a person who is not domiciled in the State on a particular date shall be treated as not resident and not ordinarily resident in the State on that date unless—

(a) that date occurs on or after 1 December 2004,

(b) that person has been resident in the State for the 5 consecutive years of assessment immediately preceding the year of assessment in which that date falls, and

(c) that person is either resident or ordinarily resident in the State on that date.

(4) (a) In this subsection—

‘company’ means a private company within the meaning of section 16(2);

‘company’ controlled by the successor’ has the same meaning as is assigned to ‘company controlled by the donee or successor’ by section 16(3);

‘share’ has the meaning assigned to it by section 16(2).

(b) For the purposes of subsection (1)(b), a proportion of the market value of any share in a private company incorporated outside the State which (after the taking of the inheritance) is a company controlled by the successor shall be deemed to be a sum situate in the State and shall be the amount determined by the following formula—

where—

A is the market value of that share at the date of the inheritance ascertained under section 16,

B is the market value of all property in the beneficial ownership of that company which is situate in the State at the date of the inheritance, and

C is the total market value of all property in the beneficial ownership of that company at the date of the inheritance.

(c) Paragraph (b) shall not apply in a case where the disponer was not domiciled in the State at the date of the disposition under which the successor takes the inheritance or where the share in question is actually situate in the State at the date of the inheritance.”.

(2) Subject to subsection (3), this section shall have effect in relation to inheritances taken on or after 1 December 1999.

(3) Notwithstanding subsection (2), this section shall not have effect in relation to an inheritance taken under a disposition where the date of the disposition is before 1 December 1999.