Capital Acquisitions Tax Consolidation Act 2003 Section 5

Gift deemed to be taken

Section 5 defines when a person is deemed to take a gift for capital acquisitions tax purposes, identifies what property constitutes the gift, and sets out how the taxable value of certain benefits is determined.

• A gift arises when a person becomes beneficially entitled in possession to a benefit, otherwise than on a death, without paying full consideration in money or money's worth.
• The gift consists of the whole or the "appropriate part" of the property in which the benefit is taken, charged, or secured — and where an annuity is not charged on property, its value is capitalised using government securities yields.
• Where property is transferred to a relative and the disponer retains an annuity or life interest ceasing on death, that retained interest is not treated as consideration — preventing the donee from using it to reduce the taxable value of the gift.
• Special rules apply to private company shares: a gift may be deemed to arise even if consideration was paid, where the consideration cannot reasonably be regarded as full value given the disponer's position before the disposition.