(1) Section 17 of the Principal Act is amended -

(a) in subsection (1) by substituting the following for paragraph (a):

"(a) for purposes which, in accordance with the law of the State, are public or charitable,",

and

(b) by inserting the following after subsection (1):

"(1A) For the purposes of subsection (1)(a) a discretionary trust that is at any time a party to any arrangements the main purpose (or one of the main purposes) of which is to secure a tax advantage for any person shall be regarded as not having been created exclusively for purposes which, in accordance with the law of the State, are public or charitable.

(1B) For the purposes of subsection (1A) -

'arrangements' includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

'tax advantage' has the same meaning as in section 811 of the Taxes Consolidation Act 1997.".

(2) This section applies to inheritances taken on or after the date of the passing of this Act.