The Gazette 1985

JANUARY/FEBRUARY 1985

GAZETTE

ment, it was argued that the gift from the Settlor was essentially taken on 17 November 1962 and that accordingly, there was no liability to gift tax under the C . A . T. Act, 1976. It was f u r t h er submitted that this was the real nature of the transaction and as such was what mu st be c o n s i d e r ed — not t he conveyancing form, referring to the cases of theAttorney-General -v- Power [1906] 2 I.R. 272 and Ramsey -v- Inland Revenue Commissioners [1981] 2W.L.R. 449. In further support of this argument, it was pointed out that Section 20 of the C.A.T. Act, 1976 provides for taxation on the basis that the contingency will not happen but makes provision for a subsequent a d j u s t me nt should the contingency in fact take place. T h e R e v e n u e C o m m i s s i o n e r s, although not contesting that the interest, taken by the Appellant on 17 November 1962 was a vested interest, argued that it was a limited interest, and that the Appointment on 4 April 1978 of the trust fund constituted a gift chargeable to gift tax of the said fund taken absolutely by the Appellant on that date from the Settlor. H E L D : H a v i ng r e g a rd to t he definitions of 'benefit', 'property', and 'interest in expectancy' set out in the C.A.T. Act, 1976, the Appellant took a benefit within the meaning of Section 5 of that Act by virtue of the Appointment of 4 April 1978. This benefit consisted of the value of the interest of the children and remoter issue of the Appellant contingent on her death before 31 December 1985, and constituted a gift liable to Gift Tax. Brigid Kathleen Jacob -v- The Revenue Commissioners - High Court (per McWilliam J.). 6 July, 1983 -unreported. Sarah Cox

provisions of the Local Government (Planning and Development) Acts, 1963 to 1983, while at the same time barring any claim to compensation by the Claimant by reason of the exclusion referred to in Section 56 (l)(b)(i) of the Local Government (Planning and Development) Act, 1963". The Court directed that the award be remitted to the Arbitrator for the sole purpose of considering the replies which were given to the questions of law raised in the case stated and confirming his award in the light of such replies, if he should think fit to do so. It appeared to the Court that the replies which had been formulated to these questions entitled the claimant to receive the higher figure referred to by the Arbitrator, but this matter should, at least, be determined initially by the Arbitrator. John Meenaghan -v- Dublin County Council [1984] ILRM 616 - High Court (per O'Han!on J.). 14 Setpember, 1983 - unreported. Daniel Brilley GIFT TAX The exercise of a power of appointment under a settlement which has the effect of conveying the contingent interest of a third party to the donee of the power constitutes a benefit within the meaning of the C .A.T. Act, 1976 and is thus chargeable with gift tax. By a Settlement dated 22 November 1955, the Appellant's father settled certain funds on trust for the Appellant so that the income should be accumulated and added to the capital of the fund until the Appellant attained the age of 30 and thereafter the income to be paid to the Appellant until 31 December 1985 or her earlier death and, should she survive until 31 December 1985, the capital to be paid to her absolutely. Provision was also made for payment of all or any part of the trust to the Appellant once she reached the age of 30. If the Appellant should die at any time while all or any part of the trust fund remained in the hands of the Trustee, the Settlement provided that such funds should be held in trust for her children or if none, for the other children of the Settlor, as therein provided. The Appellant attained the age of 30 on 17 November 1962. By Deed dated 4 April 1978, the Trustees irrevocably declared that they held the trust fund for the benefit of the Appellant absolutely, freed and discharged from the trusts of the Settlement. The Appellant submitted that she took an absolute vested interest in the fund on 17 November 1962, subject only to divesting in the event of her death before 31 December 1985. As all possibility of divesting was removed by the Appoint-

Copies of judgments in the above cases are available on request f r om the Society's Library. The photo- copying rate is lOp per page.

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