Taxes Consolidation Act 1997 section 730GB

Capital acquisitions tax: set-off

Section 730GB provides for the offset of exit tax arising on the death of a life policy holder against capital acquisitions tax on the same event.

• Where a chargeable event occurs on the death of a person in relation to a life policy, the assurance company may be liable to account for appropriate tax (exit tax) on any gain arising.
• The amount of that exit tax, up to the amount that would be calculated at the rate under section 730F(1)(a) (currently 30 per cent), is treated as if it were capital gains tax paid for the purposes of section 104 of the Capital Acquisitions Tax Consolidation Act 2003.
• This treatment allows the exit tax to be credited against any capital acquisitions tax (inheritance tax) arising on the same death, in the same way that capital gains tax can be credited under section 104.
• Whether the life policy is a standard policy taxed at 38 per cent or a personal portfolio life policy taxed at 60 per cent, only the portion of exit tax equivalent to the 30 per cent rate qualifies for offset — the excess does not.