I’m really dating myself here. But was your early childhood full of M*A*S*H*, Basil Brush and the Little House on the Prairie? Well maybe it wasn’t, but the latter programme with the great Michael Landon contained a general structure of happy start, middle tragedy, cosy ending. This email is a little like that.

You might recall that last week I mentioned the issue of the position of an adopted child and how an adopted child cannot bring a s. 117 application against their natural parents. But what happens if the adopted child comes back into the life of the natural parents and re-establishes a relationship. This has been known to happen and you may have had experience of this. Going a step further, what if the natural parents wish to leave a gift to their now adopted child. Will that child be treated as a class C child for the purposes of CAT?

To take a step back. Under the Capital Acquisitions Tax Consolidation Act 2003 (CATCA) the definition of a child includes an adopted child (see 2. (1)(b) of CATCA). So the adopted child is Class A of his adopted parents. That makes sense. There is thankfully an additional exemption for natural parents and adopted children. This is contained in Schedule 2 Part 1 of CATCA (this is the section that deals with the value of the thresholds and computing the tax). Here paragraph 10 of that part of the Schedule states effectively that an adopted child will be treated as Class A for their natural parents. The particular section states that the exemption applies on a claim being made to the Revenue. So it appears the exemption is not automatic and it must be claimed. The upshot however, is that natural parents have a good deal of leeway if they wish to favour a natural child who has come back into their lives.

Hope this helps!!

Just as a post script and thanks to Eamonn Carney solicitor (Carney McCarthy, Clonskea) for this one. In adoption cases just ensure that the child is validly adopted. There have been cases in the past where children were adopted through religious organisations but the reality was that there was no official adoption. So a child was handed over to new parents, with the bare minimum of paperwork. If the child is not validly adopted, then the child remains a child of their natural parents. So, as Eamonn points out (and as you know yourselves) get the certificate, be it adoption, marriage, divorce etc.