Discussing a section of this nature can be an anticlimax but I think we have common case that discretionary trusts and the objects of the next section, private non-trading companies, unfortunately, became over-used as tax avoidance devices. In all fairness, in neither case should we adopt the attitude that because somebody got away with it in the past, we will get them now. It may be all right so to apply it in future but not in such a way that it would be a penalty for what has happened in the past.
Discretionary trusts are almost a social necessity with our system or property. There is the question of parties to a marriage and all that is involved in the harmony or disharmony of marriage; the question of minor children; the question of provision for dependants and in all these cases the device of discretionary trusts is most valuable in the hands of the lawyer for seeking equity. I do not accuse the Minister, the Revenue Commissioners or their advisers of being deficient in understanding in this regard but it is well for the House to be aware that you cannot take a tidy, accountant's point of view of this matter. Cases will vary: you are dealing with humanity and its variations. It is simple enough to see it where you have marriage problems but even in the equality or inequality of minor children, a parent or a settlor may decide that child A will be all right, that child B has some physical or other defect and probably will need particular provision; that child C is utterly no good. The balances may be such as to appear to be variable in the future and the device of a discretionary trust, properly applied with good legal advice can meet these human problems.
I see what the Minister has in mind in those laudable sections 2 and 3 and I see he has to be severe as he is because this device has been used for avoidance. I want to ask the Minister this question—I have a concrete case in both the instance of trading companies and discretionary trusts but, particularly under discretionary trusts —is this not a case where maximum discretion should be allowed to the Revenue Commissioners as to whether they apply the provisions of this section or section 3? The Minister does this in specific cases and he has accepted amendments for which we are grateful in which that discretion is extended. I suggest that the principal might be capable of further extension with the added advantage that tax evasion is more surely detected and that no device which is technically correct in law—such as the non-trading company before the provisions to prevent it defeating succession duty were brought in—will succeed. Where you have a definite provision with everything spelled out, it is fine as far as it goes. The Minister might say that an Opposition can be very inconsistent and argue for certainty of the law on one hand and for something else on the other.
