The relief for dental expenses is very restricted and excludes the cost of extraction, scaling and filling of teeth and the provision and repairing of artificial teeth or dentures. Such expenses are regarded as routine dental expenses. Non-routine dental treatments include:

• Crowns - These are restorations fabricated outside the mouth and are permanently cemented to existing tooth tissue.
• Veneers / Rembrant Type Etched Fillings - These are a form of crown.
• Tip Replacing - This is regarded as a crown where a large part of the tooth needs to be replaced and the replacement is made outside the mouth.
• Gold Posts - These are inserts in the nerve canal of a tooth, to hold a crown.
• Gold Inlays - These are a smaller version of a gold crown. (Only allowable if fabricated outside of the mouth).
• Endodontics - Root Canal Treatment - This involves the filling of the nerve canal and not the filling of teeth.
• Periodontal Treatment including:-
  Root Planing is a treatment of periodontal (gum) disease
  Currettage and Debridement is part of root planing.
  Gum Flaps is a gum treatment.
  Chrome Cobalt Splint if used in connection with periodontal treatment. (If it contains teeth, relief is not allowable).
• Orthodontic Treatment - this involves the provision of braces and similar treatments.
• Surgical Extraction of Impacted Wisdom Teeth - when undertaken in a hospital relief is allowable. Certification from the hospital will be required to obtain tax relief.
• Bridgework - dental Treatment consisting of an enamel-retained bridge or a tooth-supported bridge is allowable.
  
  
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• BIK is equal to the "cash equivalent" of the benefit of the car less amounts made good to the employer by the employee in respect of the costs of providing or running the car.
• The "cash equivalent" is equal to the original market value (OMV*) of car x 30%. The cash equivalent is reduced by:

• 4.5% of the OMV of car, where the employee pays the cost of private fuel
• 3% of the OMV of car, where the employee pays the cost of car insurance
• 3% of the OMV of car, where the employee pays the cost of repair and servicing of the car
• 1% of the OMV of car, where the employee pays the motor tax

If an employee makes a contribution to the employer towards the cost to the employer in providing the car then this amount may be deducted from the BIK charge calculated under the above rules.

The original market value of a car is the Irish open market price for a single retail sale immediately before the date on which the car was first registered. For example, the original market value of a car first registered in the UK on 1 July 1994 and imported into Ireland on 1 November 1996 (and registered in Ireland in November 1996) would be the Irish open market price for a single retail sale immediately before 1 July 1994. Original market value includes vehicle registration tax (VRT).

In practice, the original market value is considered by reference to list prices. Where it is established that a discount was involved and such discount was normally obtainable in respect of a single retail sale in the open market, the list price may be reduced accordingly. Reductions for discounts do not usually exceed 10%.

Where a car is available for only part of the tax year, the cash equivalent for that year is adjusted for the number of months for which the car was available.

Example for the tax year 2002
Van cost €16,000
		€
Annual value: -	€16,000 @ 12.5%	2,000
Running expenses		3,000
Total BIK		€5,000

• Principal Private Residence Loans 4.5%
• Other loans 11%

• office accommodation, furniture or supplies used by a director or employee in carrying out the duties of the office or employment. In other words facilities used solely for business purposes are tax-free e.g. stationery, briefcase etc.
• living accommodation provided for an employee (but not a director) on the employer's business premises, if the employee is, for the purpose of enabling him/her to properly perform the duties of the employment, required by the terms of his/her employment to reside in the accommodation and either -
• the accommodation is provided in accordance with a practice which, since before 30 July 1948
  • has commonly prevailed in trades of the class in question as respects employees of the class in question, or
  • it is necessary, in the particular class of trade, for employees of the class in question to live on the premises.
• meals in a canteen where meals are provided for all employees - an exclusive executive canteen would not be included.
• contributions paid by the employer in or in connection with the provision of a pension, annuity, lump sum, gratuity or other like benefit to be given on the death or retirement of the director or employee.
• annual or monthly bus or train passes provided by an employer to an employee in respect of scheduled licensed passenger transport services
• childcare services provided by the employer for a child of a director or employee on premises which are made available:
  • solely by the employer,
  • by the employer jointly with other persons and the employer is wholly or partly responsible for financing and managing the provision of the childcare service,
  • by any other person or persons and the employer is wholly or partly responsible for financing and managing the provision of the service subject to certain requirements of the Child Care (Pre-School Services) Regulations 1996. "Childcare" service means any form of child minding service or supervised activity to care for children whether or not provided on a regular basis.
• Where there is no cost or expense to the employer in providing the benefit-in-kind and assuming that the benefit is not already caught under the rules for company cars, preferential loans, living accommodation etc. then there is no taxable amount. The type of benefit-in-kind which would fall into this category would be "in-house" benefits where the marginal cost is nil e.g. the employer, say, a surveyor or solicitor gives free expert advice to an employee on the handling of a contract for the purchase of his/her house. As there is no cost to the employer in giving the advice the taxable amount is nil.
  
  

• Resident, ordinarily resident and domiciled in Ireland -
  • You are liable to Irish tax on your word-wide income and gains.
  
  
• Not resident but ordinarily resident and Irish domiciled -
  • Your are liable to Irish tax on all Irish and foreign sourced income in full, apart from:- ·
    • income from a trade, profession, office or employment, all the duties of which are exercised outside Ireland. (Incidental days of up to 30 are generally ignored) and
      
    • other foreign income, e.g. investment income, provided that it does not exceed €3,809 in the tax year in which it is earned. If such income exceeds the limit then the full amount of foreign income will be subject to Irish tax.
    
    
    
  • Resident but not Irish domiciled
    • Taxable on Irish sourced income in full and taxable on foreign sourced income if remitted.
    
    
    
  • An Irish citizen resident and not ordinarily resident.
    • Taxable on Irish and UK sourced income in full and taxable on foreign (outside Ireland and UK) sourced income if remitted,.
    
    
    
  • Not resident, not ordinarily resident and not Irish domiciled.
    • Taxable on Irish and UK sourced income in full and
    • Taxable on foreign sourced income in respect of a trade, profession or employment exercised in Ireland, if that income is remitted into Ireland.
    
    
    
  The above paragraphs outline your income tax treatment under Irish domestic legislation, the provisions of any Double Taxation Agreement that apply to you because of your tax links with another country will generally take precedence over domestic legislative provisions and may result in a different tax treatment.
  
  

An individual may leave Ireland for a temporary period to work abroad or may decide to leave for an indefinite period. The individual's intentions as well as actions will determine his/her tax status. A temporary absence may result in the individual becoming non-resident while a move to another country with the intention of setting up a permanent home there could result in a change of domicile.

An employee who is not a resident in Ireland for the tax year following the one in which they moved abroad, may be taxed on the "split year" basis in the year of leaving. Split year basis entitles the employee to complete exemption from income tax on employment income from the date of departure from Ireland even though he/she is technically resident in Ireland under the rules outlined above.

An individual leaving Ireland mid-way through a tax year will in most circumstances be entitled to a full years personal allowance / credits, even though only part of their employment income will be taxed under the split year treatment outlined above. This is an area where a little advanced planning and some professional advice are important so that maximum benefit can be taken from the tax rules applying in both the foreign country and Ireland when deciding on the exact date of leaving Ireland.

Even where the individual continues to be paid and employed by an Irish company, once non-residence is established under the "split year" rules the employment income (only) is earned free of Irish tax from the date of departure. This favourable tax treatment is available on application to your local Tax Office. This treatment does not extend to Pay Related Social Insurance (PRSI).

The individual should check out his/her tax status in the country in which he/she is working to ensure that any foreign taxes due are paid.

An individual moving or returning to Ireland after a period of absence may be taxed on the "split year" basis in the year of arrival. Split year basis entitles the employee to complete exemption from income tax on employment income earned before the date of arrival in Ireland even though he/she is technically resident in Ireland for the tax year under the residence rules outlined above.

An Irish resident and domiciled, but non-ordinarily resident individual is liable to Irish tax on Irish and UK source income and gains. Foreign (outside Ireland and UK) sourced income and gains during the period of non-ordinary residence are only taxed if remitted, known as the "remittance basis"

Individuals who retain a foreign domicile when moving to Ireland are entitled to the remittance basis for all foreign sourced income and gains even after they become ordinarily resident.

The tax status of an individual has very little bearing on that individual's PRSI status. An individual who is taxed under the Irish PAYE system is generally subject to the PRSI system as well. However, an Irish national working for their Irish employer in another EU country may choose to remain in the Irish PRSI system during the period of their international assignment for up to 5 years. Where the individual is working for their Irish employer in the US or Canada a different system applies but it is also possible for the individual to remain in the Irish PRSI system.

Where a foreign national is seconded to Ireland similar rules apply. An individual seconded by an EU employer may remain in their home country's social insurance systems. A Canadian or US seconded by an employer based in their home country may also be exempted from Irish social insurance contributions.

It has long been accepted by the Irish Revenue that certain removal/relocation expenses payments made by an employer towards an employee's expenses which results in no net overall benefit to the employee should not be subject to tax.

The conditions that must be satisfied to allow the removal/relocation expenses covered to be paid free of tax are as follows:

(a) The reimbursement to the employee or payment directly by the employer must be in respect of removal/relocation expenses actually incurred

(b) The expenses must be reasonable in amount

(c) The payment of the expenses must be properly receipted

(d) Moving house must be necessary in the circumstances.

(a) Auctioneer's and solicitor's fees and stamp duty arising from moving house

(b) Removal of furniture and effects

(c) Storage charges

(d) Insurance of furniture and effects in transit or in storage

(e) Cleaning stored furniture

(f) Travelling expenses on removal

(g) Temporary subsistence allowance while looking for accommodation at the new location.

(h) The vouched rent of temporary accommodation for a period not exceeding three months (this may not be paid concurrently with the temporary subsistence referred to above).

With the exception of any temporary subsistence allowance, all payments must be matched with receipted expenditure. The amount reimbursed or borne by the employer may not exceed expenditure actually incurred. Any reimbursement of the capital cost of acquiring or building a house or any bridging loan interest or loans to finance such expenditure would be subject to tax.

In effect payment free of tax is restricted to the reimbursement of actual outgoings of a revenue nature incurred at the time of the move.

Rental income arising from a foreign property is taxable in Ireland when it arises to an individual who is resident and domiciled in Ireland. The taxable rent is calculated under Irish rules, with effect from Jan 1st 2002, interest paid on the borrowings used to acquire a residential property abroad is deductible against rental income for tax purposes.

Income tax may also be payable in the foreign country on the same rents, but generally a credit for the foreign tax paid will be allowed when calculating the Irish liability.

The tax authorities of both countries will require tax returns to be made.

If the property is sold or transferred to say a family member, a charge to Irish capital gains tax may arise. This will be based on the Irish Punt equivalent of the sale proceeds less the Irish Punt equivalent (as adjusted for indexation) of the purchase price. The rate of CGT applying is (currently) 20%.

There may also be foreign taxes payable on the disposal.

In common with Ireland, many countries charge tax on a transfer by way of gift or inheritance of real property situated in their jurisdictions, regardless of the residence or domicile of the donor or donee. If an investor's intention on acquiring the property is for long-term investment, careful consideration should be given at the time of the acquisition, to the potential gift or inheritance taxes that may arise in both the home and foreign countries.

In many cases, an effective way of avoiding these potential taxes is to hold the foreign property through an offshore company so that any gift or inheritance taken is of shares in a foreign company rather than real property. Depending on the value of the property, holding it through an offshore company is often prohibitively expensive.

In addition to the taxation issues, the freedom to gift or will a property may be restricted by the law of the foreign country. In Civil Law countries such as Spain and France, forced heirship rules mean that certain family members (generally children) have automatic rights to a certain proportion of the foreign estate. These rights have precedence over any provisions that an individual makes in their Will.

The best way to minimise exposure to foreign taxes and to ensure that the property can be gifted or willed as wished, is to seek professional advice both in Ireland and in the foreign country. It makes a great deal of sense to have a foreign Will drawn up in the local language (and translated into English) at the time the property is purchased. This will facilitate the transfer of the property and also minimise the administration burden and cost the of the transfer in the future.

• Resident or ordinarily resident and domiciled
  • are chargeable to CGT on gains on the disposal of all assets wherever situated.
• Resident or ordinarily resident but not domiciled in Ireland
  • are chargeable to CGT on gains on the disposal of Irish and UK situated assets made within that tax year and on remittances in the tax year from disposals of foreign (i.e. non-Irish and non-UK) assets, where such disposals were made during tax years during which the individual was also resident or ordinarily resident in Ireland but not domiciled.
• Neither resident nor ordinarily resident in Ireland
  • are liable to Capital Gains Tax on gains arising from certain Irish assets. These assets include:

(a) Land or buildings in Ireland

(b) Minerals in Ireland

(c) Assets of a business carried on in Ireland

(d) Exploration or exploitation rights on the Irish continental shelf

(e) Unquoted shares deriving the greater part of their value from the assets mentioned in (a),(b),(d) above

To calculate the gain liable to CGT you take the sales proceeds and deduct from them any expenses of sale for example legal fees, advertising costs etc.

The cost of the asset (or its market value at 6th April 1974 if the asset was owned at that date) is then indexed by the relevant multiplier Click for more info. Budget 2003 proposed to end indexation from the end of December 2002, meaning that no multiplier will be available from that date. However, it will still be possible to get indexation up to December 2002 for assets owned before that date when they are sold. The indexed cost is then deducted from the sale proceeds.

There are special rules for calculating a gain on "development land". Development land is land in Ireland where either the price paid or the value of the land at the date of disposal exceeds what is known as the "Current Use Value" of that land. Current use value is, broadly speaking, the open market value of the land on the assumption that it would be unlawful to carry out any developments to the property. The calculation of the amount of the capital gain and the correct rate of tax applying to disposals of development land require specialist advice.

There are also special rules for calculating the gains on disposals of shares. These involve identifying shares of the same class on a "first in- first out" basis. In other words if you have own shares in ABC Ltd. that you acquired over a number of years, then a disposal of part of that shareholding is regarded as coming from the shares that you purchased first, rather than those purchased most recently. The calculation of the taxable gain in such a disposal can be complicated, especially where bonus or rights issues are involved and are best dealt with by an expert.

An exemption for the first €1,270 gain in each tax year is available to each individual and after the gain has been reduced by this amount then the resulting net gain is chargeable to tax at the appropriate rate.
Capital Gains Tax Rates

Each individual is exempt on the first €1,270 gain in each tax year. This annual exemption can't be carried forward to the next tax year or transferred to a spouse or any other person.

If you own quoted shares you can use up this exemption by selling enough shares to create a gain of €1,270 and not pay any CGT. You can always buy back the same shares which means that when you sell them in the future your cost for CGT purposes will be the price you paid to buy them back rather than the lower original cost.

The CGT tax code contains certain reliefs that allow you to defer or "roll-over" the gain on a disposal where the proceeds from the sale are invested into specific assets. Rollover relief may be claimed for business assets or shares.

If you are disposing of certain types of business assets that have been used solely for trade, business, profession or employment purposes during the period of ownership then you may be entitled to claim roll-over relief - which means that the gain may be "rolled-over" into replacement assets. The chargeable gain arising on the disposal is deferred until the replacement assets cease to be used for business purposes. However, in Budget 2003, the minister announced that rollover relief would not be available on disposals of business assets after 4 December 2002. The Finance Act of 2003 will determine finally if this rollover relief will continue to be available.

The entire proceeds from the sale of the old assets must be reinvested in replacement assets to claim full relief. If less than the full amount is reinvested then partial rollover relief may be claimed to the extent that the amount reinvested is less than the chargeable gain. Roll over relief may be claimed on the following types of assets:

• Plant and machinery,
• Buildings,
• Land -with some restrictions and
• Goodwill.

It is possible to dispose of one type of asset and replace it with another e.g., sell machinery and reinvest the proceeds in a building. The replacement timeframe is within a period beginning twelve months before and ending three years after the date of disposal of the old assets.

It most cases the old and replacement assets must be used in the same trade. It is possible to also claim relief where:

• A person carries on two or more businesses in different localities once the businesses involve goods or services of the same kind.
• A person ceases one business and commences a new business within two years provided that the old business had existed for at least ten years.
  
  

A capital gain on the disposal of shares in a trading company may be rolled-over where the proceeds are reinvested in an unquoted trading or professional company . The conditions that must be met are complex and cover both the shares disposed of (OLDCO) and the shares acquired (NEWCO). It is certainly possible with a little planning to come within the terms for both. A brief summary of the conditions that must be met:

OLDCO

(i) must be a trading company

(ii) the individual must have worked on a full-time or part-time basis as either a director or employee for the three years prior to the disposal of the shares

(iii) there is no holding period or minimum percentage holding for the shares in order to qualify

NEWCO

(i) the investment must be made in new shares

(ii) the company must be an Irish company unquoted and tax resident in Ireland

(iii) it must not be a subsidiary or a member of the same group of companies as OLDCO

(iv) it must carry on a trade or profession in Ireland

(v) the individual must acquire 5% interest of the company within one year and a 15% interest within three years of the date of disposal of OLDCO shares

(vi) the individual must become a full-time director or employee of the company within three years of the date of disposal of the old shares and remain for a further two years unless the company is wound up for bona fide commercial reasons.

If conditions are breached within three years of the date of disposal of the shares in OLDCO, then the relief is withdrawn and capital gains tax on the disposal of shares in OLDCO, plus interest, is due in the tax year in which the conditions are breached.

Finance Act 2001 introduced new capital gains tax rollover relief for certain rental properties.

Briefly in order to qualify for the relief, the property disposed of must contain at least three residential units rented out throughout the ownership period and must comply with certain housing regulations. (If the property was not rented out for the entire period of ownership then partial relief may be available). The gain on the disposal of the old property is deferred if proceeds from the sale are reinvested in another rental property which also contains at least as many residential units as the property disposed of. The relief is only a deferral of the gain on the old property until the new one is disposed of.

A "residential unit" is defined as "a separately contained part of a residential premises used or suitable for use as a dwelling". It is unlikely therefore that a large house shared by a more than three people would qualify, whereas a large property divided into three or more self contained flats or apartments would qualify.
Full rollover relief is available where all of the sale proceeds are re-invested. Where only part of the proceeds are re-invested, then partial rollover relief may be claimed provided that the amount of the proceeds not reinvested is less than the gain arising on the disposal. The reinvestment must take place within the period of one year before and three years after the disposal of the old premises.

• The disposal is to your children, or
• The sale proceeds are less than €500,000 . (There is a measure of relief available where the proceeds only marginally exceed the limit.)

Where the disposal is to your child or children then the gain is exempt from CGT irrespective of the value or consideration paid. A "child" includes a nephew or niece who has worked in the business substantially on a full time basis for the period of five years ending with the disposal.

If the child disposes of the assets within six years of receiving them then, the capital gains tax is calculated as though the exemption did not apply and becomes payable by the child as well as any other capital gains tax which may be due on the disposal by the child.

Where the disposal is to a third party there is a lifetime limit of €500,000. Once that limit is exceeded then all relief granted on earlier disposals is clawed back. However, unlike a disposal to a child, the claw-back provisions do not apply. Where both spouses meet the conditions then each spouse is entitled to the €500,000 limit. This means in effect that the business could be sold for up to €1,000,000 without a charge to CGT applying.

It is possible to make separate disposals to children and a third party and claim relief for both.

• You must have owned the assets for a minimum period of 10 years ending on the date of the disposal. Business property held outside a trading company does not qualify for relief.
• If the business is run through a company you must have been a working director for 10 years immediately prior to the disposal, of which 5 years must have been spent as a full time working director.
• An individual who has participated in an EU Farm Retirement Scheme by way of leasing of land may claim the exemption.

• the child disposes of all/part of the land unless the disposal is to the child's spouse
• the child disposes of a residence constructed on the land without having lived there for at least three years.

If either of the above occurs then the CGT which would have been due by the parent is payable by the child in addition to any gain due on the disposal by the child.

The exemption is a "once-only" between a parent and a child irrespective of the value of the property. For example, a parent could claim exemption on a transfer of a site worth €101,579. A subsequent transfer of additional land valued at €63,487 would not qualify for the exemption even though both transfers were valued at less than the €253,948 limit.

(i) Last 12 months of ownership

(ii) Any periods during which the individual worked abroad

(iii) A period of up to 4 years during which the individual could not live in the residence because of employment conditions

In order to have a period of absence ignored it is important that the individual lives on the property both before and after any period of absence due to foreign or local employment conditions.

Any part of the residence used for business purposes will not be exempt from tax and such portion may be subject to CGT in the normal way. In the same way if a residence is sold with development potential for say a B&B, then a portion of the sale proceeds may be subject to CGT.

(iii) Woodlands - Where a disposal of woodlands is made, then the part of the proceeds referable to trees growing on the land and saleable underwood are exempt for CGT purposes. The underlying land is not exempt and the gain on such land is calculated in the normal way.

(iv) Works of Art - A disposal of a work of art, for example a picture, book, sculpture, jewellery etc, where the work has been loaned to a gallery or museum in Ireland with the approval of the Irish Revenue may be disposed of without liability to Capital Gains Tax arising once the value of the item or collection of items is not less than €31,743 at the date of the original loan. The asset must be displayed in the gallery or museum for a period of not less than six years from the date it is loaned and the public must be afforded reasonable access.

(v) Prize bonds, lottery winnings and betting gains are exempt.

(vi) Bonus under the Government Instalment Savings Scheme is exempt.

(vii) The disposal of a life assurance policy or a deferred life annuity by the original beneficial owner is exempt.

(viii) Compensation as a result of a claim for either personal injury or professional damages by an individual is exempt.

(ix) Gains on securities and stock issued by Minister for Finance, local authorities, ESB, Bord Gais, ICC, Bord na Mona, and a number of other companies are exempt.

(x) Chattels (assets which are tangible and moveable) can be divided into two categories: - wasting and non-wasting.

Wasting asset is one with a predictable useful life of fifty years or less. Gains on the disposal of wasting assets, for example, yachts, bloodstock etc. are exempt unless the assets have been used for business purposes. Where such assets are used for business purposes and qualify for capital allowances, any gain on their disposal is liable to CGT.

Gains on non-wasting assets are exempt where the sales proceeds are less than €2,539. Examples of such chattels are jewellery, paintings, furniture etc.

The first €1,270 of any gift received from any one person in any one calendar year is exempt from gift tax. This exemption does not apply to inheritances.

This exemption provides a useful method of transferring funds to a child or other relative which, if properly invested, could accumulate to a significant sum. The exemption is available to persons who are not relatives, but in the majority of cases gifts are made between persons who are related to each other.

A gift/inheritance of a dwelling house that has been used by an individual for a period of three years prior to the date of the gift or inheritance may be exempt from CAT where certain conditions are met. The exemption is unusual in that the RECIPIENT must meet the conditions in order to qualify for the relief. It is NOT NECESSARY that the owner of the property: -

• dies,
  
• ever lived in the property or
  
• is married or related to the recipient.
  

The relief is available where the property is a "dwelling" including grounds of up to one acre and the recipient: -

(a) used the dwelling as his/her only or main residence for the three years immediately preceding the date of the gift or inheritance

(b) did not have an interest in another dwelling at the date of the gift or inheritance

(c) continues to occupy the dwelling as his/her only or main residence for the following six years.

The rules are relaxed at (a) above where a dwelling is replaced within the three year period and also where the recipient is aged over 55 years. Where the recipient lives elsewhere or works abroad because of a condition imposed by an employer or requires long-term medical care the six-year retention period at (c) above is also relaxed.

The standard tax-free threshold in respect of an inheritance from a child by a parent is the Group 1 threshold of €441,198. Where, however, a child had taken a non exempt gift (i.e. had used up some of their CAT tax free threshold) from a parent within five years immediately prior to the death of that child any inheritance (regardless of value) to the parents from that child is exempt from a CAT charge.

An inheritance of certain governments and other securities by a person who is neither domiciled nor ordinarily resident in Ireland is exempt from CAT where the disponer (or trustees of a trust) held those assets for six years prior to the disposition.

Certain insurance policies may be taken out to provide funds to pay gift and inheritance taxes. The policy must be taken on the life of the person (or his/her spouse) paying the premiums and the proceeds of such policies are exempt from CAT to the extent that they are used to pay CAT within 12 months of the policy maturing. If the proceeds of the policy are not used within that 12-month period than the funds become a taxable asset of the estate subject to CAT. If the proceeds of such a policy exceed the tax liability then the excess funds become an asset of the estate and subject to CAT as appropriate.

It is also possible to take out a similar type of policy to cover a liability to gift tax arising on an inter vivos transfer made by the insured person. The transfer must occur more than 8 years after the date on which the policy is taken out or on the earlier death or critical illness of the person insured.

(a) They are kept permanently in Ireland apart from approved temporary absences abroad

(b) That reasonable facilities for public viewing are available

The exemption will also apply where the assets are held through a corporate structure.

The exemption is lost if within 6 years the object is sold unless it is sold to a recognised institution for example, The National Gallery of Ireland.

Any balance in an "approved retirement fund" (ARF) or in a "approved minimum retirement fund" (AMRF) which passes on the death of either a pensioner or the spouse of a pensioner to a child age 21 years or older is exempt from inheritance tax. The exemption is provided because such an inheritance is under pension rules liable to income tax.

If however, the ARF or AMRF passes to a child under 21 years it is within the scope of inheritance tax but exempt from income tax.

• Business relief
• Agricultural property relief. Both of these reliefs are available to relative and non-relatives.
• Favourite nephew/niece relief This is a special increased tax-free threshold available where a favourite nephew/niece takes a gift/inheritance of business assets.
  
  

Business assets relief reduces the value of business assets by 90% for CAT purposes. There are a number of conditions that must be met to qualify for the relief and, unlike retirement relief for CGT purposes, it is available for both business assets held in a personal capacity and those held through a corporate structure. Agricultural property may qualify for business relief if the beneficiary does not qualify under the conditions for agricultural relief.

To qualify, the asset disposed of must be:-
(a) A business operated for profit (excluding a business consisting wholly or mainly of dealing in land, shares, securities or currencies or of making a holding of investments).

(b) Unquoted shares or securities of an Irish company where the company carries a qualifying business and where

• after the gift or inheritance the beneficiary holds more than 25% of the voting rights in the company or
• the beneficiary holds at least 10% of the company's issued share capital and either has worked full time in the company for five years prior to the gift or inheritance or
• where the beneficiary together with his relatives controls the company.

There is no requirement that the beneficiary had an involvement in the business prior to the date of the gift/inheritance. Any relief given to the beneficiary may be clawed back if, within six years of the gift or inheritance , the business ceases to qualify or if the property is sold or compulsory acquired and is not replaced within a year by another relevant business property.

Where a family company is in place, not all of the assets held by the company will qualify for relief. If a company holds investments including cash and non business properties such assets will not be qualifying assets and relief will be restricted to the proportion of the value of the shares which derives from qualifying business assets

Agricultural relief reduces the market value of all agricultural property (land, buildings, farm machinery, livestock, and bloodstock) which is transferred by way of a gift/inheritance by 90% for CAT purposes. In order to qualify for the relief a number of conditions must be met by the beneficiary:-

1. The main one is known as the "farmer" test where at least 80% of the gross value of all assets owned by the beneficiary at a specific date, including the agricultural assets inherited, consists of agricultural property
2. Where the test is applied after 10 February 2000, the value of an interest in expectancy and property in a discretionary trust (set up by that person and in which he/she is a potential beneficiary) is also taken into account
3. The beneficiary must be

• domiciled in Ireland at the date of the gift/inheritance and
• resident in Ireland for the following three tax years.

Any relief given to the beneficiary may be clawed back if, within six years of the gift or inheritance, the agricultural property is sold or compulsorily acquired and is not replaced by other agricultural property within 1 year if sold and within 4 years in the case where it has been compulsorily acquired.

A nephew/niece who receives a gift/inheritance of business assets may in certain circumstances be treated for CAT purposes as a child i.e. able to take an inheritance of business assets as a Group 1 beneficiary. A qualifying nephew/niece may receive up to €441,198 free of CAT rather than €44,120 available to Group 2 beneficiaries. The main conditions to be met are:

• the individual must have worked substantially on a full time basis for the donor in the five years ending on the date of the inheritance.
• The nephew/niece must be a child of a brother/sister of the donor i.e. must be a blood nephew/niece.

Even if the nephew/niece does not qualify for agricultural or business asset relief they can still qualify as a Group 1 beneficiary if they inherit agricultural or business assets.