Capital Acquisitions Tax Consolidation Act 2003 section 29

Contingencies affecting gifts or inheritances

Section 29 deals with the tax treatment of a gift or inheritance where the recipient's entitlement may cease on the happening of a contingency, such as a specified future event.

• When a person receives a benefit that may end on a contingency, the contingency is initially ignored and tax is charged as if the person had received the full benefit outright.
• If the contingency actually occurs and the benefit ceases, the tax is recalculated on the basis that the person held an interest for a fixed period equal to the actual duration of their enjoyment of the benefit, and the lower amount of tax applies.
• A claim for this relief must be made within four years after the contingency materialises; if the person receives a substituted gift or inheritance when the contingency occurs, that substituted benefit is separately liable to tax.
• This section does not apply where the benefit ceases because the disponer exercises a power of revocation covered by section 39 of the Act.