I move:—
(1) That in this Resolution the expression "the principal sub-section" means sub-section (2) of Section 2 of the Finance Act, 1894, as amended by Section 32 of the Finance Act, 1924 (No. 27 of 1924).
(2) That in the case of any person dying on or after the 8th day of May, 1940, the exemption from estate duty applicable by virtue of the principal sub-section in respect of settled movable property situate outside the State shall not apply in respect of any such property passing on such death where, at the date when the disposition under which the property passes took effect (whether that date is the 8th day of May, 1940, or a date, whether before or after the passing of the Act giving statutory effect to this Resolution, before or after the 8th day of May, 1940), the disponer was domiciled in the State or in the area now comprised in the State or where the said disposition was made, directly or indirectly, on behalf of or at the expense of or out of funds provided by a person who at the said date was domiciled as aforesaid.
(3) That notwithstanding the provisions contained in the foregoing paragraph of this Resolution, the exemption from estate duty applicable by virtue of the principal sub-section in respect of settled movable property situate outside the State shall be deemed to apply in relation to the death of the disponer (but not in relation to any other death) where:—
(a) the disponer dies domiciled outside the State, and
(b) the disposition constitutes an immediate gift inter vivos made by the disponer within three years of his death or constitutes a gift (whenever made) of property of which bona fide possession and enjoyment was not immediately assumed by the donee and thence-forward retained to the entire exclusion of the disponer or of any benefit to him by contract or otherwise, and
(c) estate duty would, having regard to the provisions contained in the said foregoing paragraph, be chargeable on the death of the disponer.
This Resolution aims at defeating a device for the avoidance of estate duty in respect of settled movable property situated abroad. The device involves the creation of a foreign trust, that is to say, an external trust instead of an Irish one. In normal circumstances, a man domiciled in Éire wishing to settle his property, whether such property is situated at home or is situated abroad, would appoint Irish trustees as trustees of the settlement and would have the settlement drawn up in such a way that it would be subject to the jurisdiction of our courts. For example, A who is domiciled in Éire has movable property (e.g., securities) situated abroad. He wishes to settle that property on himself for life, then on his son B for B's life, and then on B's children absolutely. He appoints resident trustees in Éire and arranges that the work in connection with the trust shall be done in this country. In those circumstances estate duty would be payable to our Exchequer on the death of A and also on the death of B. Now, on the other hand, such estate duty would not be payable to us if A, instead of creating an Éire settlement, had appointed foreign trustees (e.g., foreign bankers), had transferred his securities to them and had ordered that all the work connected with the management of the trust funds should be performed abroad, so that the settlement should be a foreign settlement not subject to the jurisdiction of our courts.
