Capital Acquisitions Tax Consolidation Act 2003 section 3

Meaning of "on a death"

Section 3 defines the expression "on a death", which is the basis of the distinction between a gift and an inheritance: if a benefit is taken "on a death", it is an inheritance; if it is taken "otherwise than on a death", it is a gift.

• A benefit taken on the death of a person, or at a time fixed by reference to a death (e.g. under a will, intestacy, or donatio mortis causa), is taken "on a death" and is therefore an inheritance.
• Where a gift is made within two years before the disponer's death, it is treated as being taken "on a death" and is subject to inheritance tax rather than gift tax.
• A benefit taken on the happening of certain events after the end of an intervening life interest — such as the determination of a trust, the exercise of a power of appointment, or a discretionary payment — is also regarded as taken "on a death".
• The disponer in these cases is the person who created the original disposition, not the life tenant whose death triggered the benefit.