Finance Act, 1997

Amendment of section 15 (settled property) of Capital Gains Tax Act, 1975 .

73.—(1) Section 15 of the Capital Gains Tax Act, 1975 is hereby amended by the insertion after subsection (5) of the following subsection:

“(5A)(a) Subject to paragraph (b), where—

(i) as a consequence of a termination, on the death of the person entitled to it, of a life interest in settled property, subsection (5) applies, and

(ii) an asset, which forms the whole or any part of that settled property—

(I) is comprised in an inheritance (within the meaning of the Capital Acquisitions Tax Act, 1976 ) taken on the death, and

(II) is exempt from tax in relation to the inheritance under section 55 of the said Act of 1976, or that section as applied by section 39 of the Finance Act, 1978 ,

that asset shall, for the purposes of subsection (5), be excluded from the assets deemed to be disposed of and immediately reacquired.

(b) Where in a year of assessment, in respect of an asset an exemption from tax in relation to an inheritance referred to in paragraph (a) ceases to apply, then the chargeable gain which, but for the provisions of paragraph (a), would have accrued to the trustee on the termination of the life interest in accordance with subsection (5) shall be deemed to accrue to the trustee in that year of assessment and shall accordingly be included in the return required to be made by the trustee concerned under section 10 of the Finance Act, 1988 , for that year of assessment.”.

(2) This section shall apply and have effect as respects the year of assessment 1997-98 and subsequent years of assessment.