This is rather a technical Bill the necessity for which has arisen out of certain legal difficulties that have appeared both here and in Great Britain in respect of certain superannuation and similar funds. The Finance Act of 1921 empowered the Revenue Commissioners to exempt from income tax certain superannuation funds provided that the Revenue Commissioners were satisfied that they complied with certain conditions set out. In Great Britain when the Revenue Commissioners were examining the trusts of certain of these funds they came to the conclusion that a number of them were invalidated by reason of the fact that they were in conflict with the rule of law against perpetuities. It is a rule of common law that property cannot be disposed of or transferred so as to delay the period in which it will pass into the hands of an absolute owner for longer than a life or lives or 21 years afterwards. The general principle is that as soon as possible property must pass into the hands of an absolute owner who may dispose of it or use it as he wishes and the period for which it would be in the possession of a limited owner such as a tenant for life should be as short as possible. There is consequently this rule of law against perpetuities and the Revenue Commissioners came to the conclusion that a number of these trusts were invalidated because they were in conflict with this rule. A test case was heard in Great Britain in 1924 and the court held that the trust of the particular fund in question was void because of that reason. The position then arose that there were a number of these funds, some of them of very great importance, the legal position of which became questionable and also the Revenue Commissioners could not grant the exemption contemplated by the Act because these funds offended against the law. A British Treasury Commission considered the matter and made recommendations which were ultimately embodied in the Bill passed by the British Parliament in 1927—a Bill very similar to that now before the Dáil.
The position here was examined in or about that time and it was found there were a number of funds, some of which were of considerable importance, in the same position and similar legislation would be required here. The legislation is necessary, of course, because the position in respect of these funds would be serious if allowed to continue. Most of these funds are superannuation funds for the employees of particular concerns receiving contributions both from the employer and the employees. In so far as these funds are bad in law, the employer's contributions, in the event of his bankruptcy, could be claimed by a creditor to meet his liabilities and, in some other way, the position of the payments now being made might be seriously jeopardised. It is proposed to set up a Register of these funds and to exempt from the operation of this rule against perpetuities such funds as in the opinion of the Registrar comply with the conditions set out in the Bill which are embodied in Section 2 of the Bill and the rules of which comply with the conditions set out in the Schedule. The Bill is practically similar in effect to that enacted in Britain and puts the law here on a par with the law there, which is desirable because some of these funds operate in the Saorstát and in the area of the jurisdiction of the British Parliament. It is a technical measure, the necessity for which cannot be denied.