Provides for the exemption of the proceeds of certain qualifying policies that are used to pay gift or inheritance tax arising in connection with a gift made by the insured. The gift must be made within one year of the proceeds of the policy becoming payable.

A qualifying insurance policy is a policy of insurance:

• which is in a form approved by the Revenue Commissioners;
• in respect of which annual premiums are paid by the insured;
• in respect of which there must be a minimum eight year funding period. However, the proceeds can be used at any time during this period if the insured dies or becomes critically ill;
• which is expressly effected under this section for the purpose of paying relevant tax;
• the proceeds of which are payable on the appointed date.
• The "appointed date" is a date at least eight years after the date on which the policy was taken out or where the insured becomes critically ill or dies before that date