Capital Acquisitions Tax Consolidation Act 2003 section 23

Computation of tax

Section 23 sets out the rate of tax chargeable as the annual discretionary trust levy, being 1% of the taxable value of assets in the trust, together with a transitional adjustment for the 2006 changeover year.

• The annual discretionary trust charge is 1% of the taxable value of a taxable inheritance charged under the discretionary trust provisions.
• The taxable value on which the charge is based is determined in accordance with the valuation rules, and the taxable inheritance is as defined under the legislation.
• A special reduced charge applied for 2006 to reflect the changeover from the tax year ending 5 April to the calendar year basis.
• For 2006, the charge on 31 December 2006 was 73.97% of the normal 1% figure, reflecting the shorter period from 5 April to 31 December.