Capital Acquisitions Tax Consolidation Act 2003 section 21

Application of this Act

Section 21 modifies certain general CAT provisions to accommodate the fact that the 'successor' under the annual 1% discretionary trust charge is a notional successor rather than an actual person receiving a benefit.

• When determining whether a company is controlled by the successor for the purposes of the 1% charge, the shares of a wider group of persons must be taken into account, including the trustees, living objects, their relatives, nominees, and trustees of related settlements.
• The valuation date of the deemed inheritance is the relevant chargeable date (i.e. 31 December each year); however, where earlier 1% charges arise before the valuation date for the initial 6% charge, those earlier charges take the same valuation date as the 6% charge.
• The trustees of the discretionary trust are primarily accountable for payment of the tax, and any object of the trust who has received a benefit from the trust after the date of the charge is also accountable for payment.
• Several general CAT provisions are disapplied for the purposes of the annual 1% charge, including the normal valuation date rules (section 30), the standard accountable persons rules (section 45(1)), the date tax is due and payable (section 50), the exemption for certain Government securities (section 81), and the standard computation rules in Schedule 2.