Wealth Tax Act, 1975

Taxable wealth of individual.

3.—(1) Subject to the provisions of this Act, the taxable wealth of an individual who is domiciled and ordinarily resident in the State on the valuation date shall comprise all the property, wheresoever situate, to which he is beneficially entitled in possession on that date.

(2) Subject to the provisions of this Act, the taxable wealth of an individual other than an individual who is domiciled and ordinarily resident in the State on the valuation date shall comprise only the property situate in the State to which he is beneficially entitled in possession on that date.

(3) Where the property to which an individual is beneficially entitled in possession includes an interest which is a limited interest, the whole or the appropriate part of the property in which the limited interest subsists or on which it is charged or secured or on which the individual is entitled to have it so charged or secured shall be property to which the individual is beneficially entitled in possession; and, if the limited interest of an individual who is domiciled and ordinarily resident in the State is an annuity or other periodic payment which is not charged or secured on any property, such sum, as would, if invested on the valuation date in the security of the Government which was issued last before that date for subscription in the State and is redeemable not less than 10 years after the date of issue, yield, on the basis of the current yield on the security, an annual income equivalent to the amount of the annuity or of the other periodic payment received in the twelve months prior to the valuation date shall be taxable wealth of the individual:

Provided that in the case of a purchased annuity, the annuitant shall have the option—

(a) of having treated for the purposes of this subsection as an annuity which is not charged or secured on any property so much of the purchased annuity as is regarded as income for the purposes of the Income Tax Acts, and

(b) in addition, of having treated as part of his taxable wealth the proportion of the consideration for the purchase of the annuity which is equal to the proportion which the balance of the purchased annuity (after deducting so much thereof as is referred to in paragraph (a)) bears to the entire annuity.

(4) For the purposes of this Act, where the property to which an individual is beneficially entitled in possession includes a reversion expectant on the determination of a limited interest, the individual shall himself be deemed to be entitled in possession to that limited interest and the provisions of this section shall apply accordingly.

(5) For the purposes of this Act—

(a) (i) an individual who is not domiciled in the State on a valuation date and who has resided in the State fornot less than—

(I) 183 days in the year ending on that date, and

(II) 183 days in each of six or more of the nine years immediately prior to that year,

shall be deemed to be domiciled and ordinarily resident in the State on that valuation date;

(ii) an individual who was domiciled and ordinarily resident in the State on a valuation date shall, notwithstanding that he ceased to be domiciled in the State after that date, be deemed to be domiciled in the State on the three valuation dates next following that valuation date:

Provided that this subparagraph shall not apply to an individual to whom subparagraph (i) applies.

(b) an individual shall be deemed to be entitled to an interest which is a limited interest in any case where—

(i) the income, or part of the income, if any, or an annuity or other periodic payment out of the income of property to which he is not absolutely entitled, or

(ii) an annuity or other periodic payment which is not charged or secured on any property,

must, during any period of time (including a period determinable by reference to a death) which commences before or on and ends on or after the relevant valuation date (whether or not that date is included in the period), be paid to him or applied for his benefit and, for the purposes of subparagraph (i) of this paragraph, property to which a person is beneficially entitled in possession but to which he is not absolutely entitled shall be deemed to produce income and the income shall be deemed to be payable to him or applicable for his benefit and “limited interest” shall be construed accordingly.

(c) “the appropriate part”, in relation to property referred to in subsection (3), means that part of the property which bears the same proportion to the entire property as the gross income of the limited interest firstly referred to in subsection (3) bears to the gross income of the entire property, and the property to which the individual is beneficially entitled in possession shall be deemed to include the appropriate part of each and every item of property comprised in the entire property.