Taxes Consolidation Act 1997 Schedule 32, paragraph 27

Settlements: Application of Section 792 for the Year of Assessment 1997–98 in Relation to Certain Dispositions to Certain Individuals Residing With, and Sharing Normal Household Expenses With, the Disponer

Paragraph 27 of Schedule 32 provided transitional hardship relief from the abolition of covenant tax relief, allowing certain pre-existing covenant arrangements to continue receiving relief up to 5 April 2000 where the covenantee resided with the covenantor and they jointly maintained a dependent child.

• From 6 April 1996, tax relief for individual covenants was generally abolished, but paragraph 27 provided transitional relief up to 5 April 2000 where the Revenue Commissioners were satisfied that applying the new rules would cause hardship.
• The relief applied only to dispositions made before 6 April 1993, or to replacement dispositions made on or after that date, provided the amount payable under the replacement did not exceed the amount payable under the original.
• The covenantee had to be a non-child of the covenantor, resident with the covenantor and sharing normal household expenses, with a qualifying dependent child of either or both also living with them and jointly maintained by them.
• The Revenue Commissioners had to be satisfied that hardship would arise, and could disapply the 1996 amendments to the extent they considered just.