THE CIVIL Partnership Bill is likely to be amended to extend the period of time a couple can cohabit before legal obligations come into force from three to five years, it is expected.

The proposed legislation will provide for the rights and responsibilities of heterosexual and homosexual cohabitants as well as the registration of same-sex civil partners. Minister for Justice Dermot Ahern will seek to have the length of time before which legal liabilities in relation to property, maintenance and pensions apply extended to five years, a source said. Opposition parties would welcome such a move.

The Minister’s spokesman said: “The issue of the length of time is one the Minister has discussed with officials in the last number of weeks, and the issue is likely to come up at committee stage.

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One of our concerns when drawing up our wills or transferring assets to a third party is how to minimise the amount of tax we pay as a result of the inheritance or gift. Wouldn’t it be nice to know that the Revenue Commissioners will reduce the value of certain gifts and inheritances by 90% in certain circumstances?

This is in fact what does happen where certain business property is transferred. The rate of inheritance or gift tax is 20% on all amounts above the threshold relevant for a particular group. The threshold at present for a brother, sister or nephew or niece is €52,121.00 and for a stranger ie non relative, €26,060.00. This means that many transfers and inheritances will be caught by CAT. Where the gift or inheritance is comprised of relevant business property, the value of the gift is reduced by 90%. Then the relevant threshold is applied to the recipient of the gift or inheritance in order to calculate tax payable, if any.

1. The business or an interest in the business in the case of a business carried on by a sole trader or partnership. However individual assets used in the business such as factory premises will not qualify the relief unless they are transferred along with the business.

2. Unquoted shares or securities in a company providing that the beneficiary will own either more than 25% of the voting rights or the beneficiary will control the company within the meaning of Section 16 of the Capital Acquisitions Tax Act 1976 or own at least 10% or more of the aggregate nominal value of all the issued shares and securities of the company and have worked full time in the company throughout the period of five years ending on the date of the gift or inheritance.

1 Businesses dealing in currency, securities, stock or shares, land or buildings or

2 Making or holding investments. Certain rules apply in deciding whether a business is wholly or mainly an investment business.

The relevant business property must have been owned five years prior to the date of the gift. If the relevant business property is taken on the death of the disponer then the relevant period is two years before the date of the inheritance.

Ownership by the disponer’s spouse or by a trustee will count for the purpose of satisfying this requirement.

Where certain assets are not being used for the business the relief can be withdrawn or partially clawed back in respect of that part of the property of the business.

A business relief claim form is included in the IT 38 Inheritance Tax/Gift Tax Return Form.

1. Yes, if the business or any business which replaced it ceases to trade within a period of six years after the date of the gift or inheritance the relief will be clawed back unless the business is replaced in one year by other relevant business property. However this will not apply where the business ceases to trade by reason of bankruptcy or as result of a bona fide winding up on the grounds of insolvency.

2. The relief will be clawed back if within a six year period the business or the shares or securities are sold, redeemed or compulsory acquired and not replaced within one year by other relevant business property.

3. A subsequent inheritance of the same property within the said six year period will not trigger a claw back in relation to the earlier gift or inheritance.

4. Where land which qualified for business relief is disposed of in whole or in part in the period commencing six years after the date of the gift or inheritance and ending ten years after that date the relief granted will be clawed back in respect of the development value of that land at the valuating date of the gift or inheritance.

Agricultural property which fails to qualify for agricultural relief may qualify for business relief providing criteria are met

The advice of your Accountant and Solicitor should be obtained in effecting a transfer or drawing up a will with a view to claiming business relief as set out above.

Katherine Irwin

IRWIN SOLICITORS

42 Castle Street,

Dalkey,

Co. Dublin