Finance Act, 1941

Purchases of annuities, etc., from relatives.

31.—(1) Where a person (in this sub-section referred to as the deceased) who dies after the 7th day of May, 1941, has made (whether before or after the passing of this Act) a disposition of property in favour of a relative, the creation or disposition in favour of the deceased of an annuity or other interest limited to cease on the death of the deceased or of any other person shall not be treated for the purposes of either section 3 of the Finance Act, 1894 , or of sub-section (1) of section 7 of that Act as consideration for the said disposition so made by the deceased.

(2) Where a person (in this sub-section referred to as the deceased) who dies after the 7th day of May, 1941, has made (whether before or after the passing of this Act) a disposition of property in favour of a company to which this section applies, the creation or disposition in favour of the deceased of an annuity or other interest limited to cease on the death of the deceased or of any other person shall not be treated for the purposes of either section 3 of the Finance Act, 1894 , or of sub-section (1) of section 7 of that Act as consideration for the said disposition so made by the deceased, unless it is shown to the satisfaction of the Revenue Commissioners that no relative of the deceased was, when the said disposition was so made or at any subsequent time during the life of the deceased, a member of either the said company or another company to which this section applies which is itself a member of the said company.

(3) Where, in a case to which one of the foregoing sub-sections of this section applies, there have been associated operations effected either with reference to the receiving by the person referred to in that sub-section as the deceased of any payment in respect of such annuity or other interest as is mentioned in the said sub-section or effected with a view to enabling the said person to receive or to facilitating the receipt by him of any such payment, the said sub-section shall have the same effect in relation to each of those associated operations as it is expressed to have in relation to the creation or disposition in favour of the said person of the said annuity or other interest.

(4) For the purposes of this section the following persons and no other person shall be relatives of another person, that is to say:—

(a) the wife or husband of that other person, and

(b) the father, mother, children (whether legitimate or illegitimate), uncles, and aunts of the said other person, and

(c) the issue (including illegitimate children) of any person who is, by virtue of either of the foregoing paragraphs of this sub-section, a relative of the said other person, and

(d) the wife or husband of a person who is, by virtue of either the foregoing paragraph (b) or the foregoing paragraph (c), a relative of the said other person.

(5) In this section the expression “company to which this section applies” means a body corporate (wherever incorporated) which, by its articles or otherwise, restricts the right to transfer its stock or shares, and limits the number of its members (exclusive of persons in its employment) to fifty, and prohibits any invitation to the public to subscribe for any of its stocks, shares, debentures, or debenture stock

(6) Where two or more persons hold stock or shares in a company jointly, they shall, for the purposes of the definition contained in the next preceding sub-section of this section, be deemed to be a single member of such company.