Capital Acquisitions Tax Consolidation Act 2003 section 74

Exemption of certain policies of assurance

Section 74 exempts interests in certain life assurance policies from capital acquisitions tax (CAT) where both the disponer and the beneficiary are foreign-domiciled and not ordinarily resident in the State.

• An interest in a qualifying life policy comprised in a gift or inheritance is exempt from CAT — and is excluded when computing tax on other benefits — provided the disponer was foreign-domiciled and not ordinarily resident in the State at the date of the disposition, and the beneficiary was likewise foreign-domiciled and not ordinarily resident at the date of the gift or inheritance.
• A "new policy" is a life assurance policy issued on or after 1 January 2001, or a contract under Article 2(2)(b) of EU Directive 2002/83/EC entered into on or after that date. An "old policy" is a life policy issued between 1 December 1992 and 31 December 2000 by a company carrying on a foreign life assurance business (within the meaning of section 451 of the Taxes Consolidation Act 1997).
• Where the disponer acquired beneficial ownership of the policy before 15 February 2001, the exemption can still apply even if the disponer is Irish-domiciled or resident, provided the proper law of the disposition was not the law of the State and the beneficiary was foreign-domiciled and not ordinarily resident at the date of the gift or inheritance.
• The exemption must be established to Revenue's satisfaction, and the interest must actually be comprised in the gift or inheritance at the relevant date.