Capital Acquisitions Tax Consolidation Act 2003 section 2

Interpretation

Section 2 defines the key terms and expressions used throughout the Capital Acquisitions Tax Consolidation Act 2003, covering concepts such as benefits, dispositions, interests in property, discretionary trusts, family relationships, and residence rules.

• Capital acquisitions tax is charged on gifts and inheritances; the person providing the property is the disponer, while the person receiving it is the donee (gifts) or successor (inheritances), and a disposition is the method by which property passes from one to the other.
• Property includes rights and interests of any description; a beneficiary may acquire an absolute interest (full ownership, including where the person holds a general power of appointment) or a limited interest (an interest for a lifetime, a fixed period, or any interest that falls short of absolute ownership).
• A discretionary trust arises where trustees hold property either to accumulate income or to apply income or capital at their discretion for the benefit of named beneficiaries; any foreign entity similar in effect to a discretionary trust (such as a Liechtenstein Foundation) is treated as a discretionary trust for the purposes of the Act.
• For capital acquisitions tax purposes, residence and ordinary residence in the State are determined by applying the income tax rules, so that a person present in the State for 183 days or more in a tax year, or for an aggregate of 280 days over two consecutive tax years, is regarded as resident; it is not necessary to wait until the end of the year to make this determination.