Taxes Consolidation Act 1997 section 731

Chargeable gains accruing to unit trusts

Section 731 sets out the rules for taxing unit trusts for capital gains tax purposes, including the charge on trustees, residence rules, exempt unit trusts, life assurance linked trusts, and transitional provisions for trusts invested in formerly exempt assets.

• Chargeable gains accruing to a unit trust are assessed and charged on the trustees, who are treated as a single continuing body of persons resident in the State unless general administration is carried on abroad and a majority of trustees are non-resident.
• Where all unitholders in a non-authorised unit trust are exempt from CGT (otherwise than by reason of residence, section 739(3) or section 739C(1)), the trust qualifies as an exempt unit trust (EUT), exempt from CGT, income tax and DIRT; the trustees must file an annual electronic statement (Form EUT1) by 28 February following the year of assessment, with a €3,000 penalty for non-compliance.
• Gains on the disposal of units in a life assurance linked unit trust administered by a licensed life assurance company are not chargeable gains, provided the trustees have always been resident in the State and the units never become the property of the policyholder.
• From 6 April 1994, gains arising on units in trusts that previously invested only in exempt assets (such as government securities) became chargeable, with transitional rules preserving the exemption for growth accrued up to 5 April 1994.