(1) Section 85 of the Finance Act, 1989, is amended by the substitution of the following for subsections (1) and (2):

"(1) In this section -

'investment undertaking' has the meaning assigned to it by section 739B of the Taxes Consolidation Act, 1997;

'specified collective investment undertaking' has the meaning assigned to it by section 734 of the Taxes Consolidation Act, 1997;

'unit', in relation to an investment undertaking, has the meaning assigned to it by section 739B of the Taxes Consolidation Act, 1997;

'unit', in relation to a specified collective investment undertaking, has the meaning assigned to it by section 734 of the Taxes Consolidation Act, 1997.

(2) Where any unit of an investment undertaking or of a specified collective investment undertaking is comprised in a gift or an inheritance, then such unit -

(a) shall be exempt from tax, and

(b) shall not be taken into account in computing tax on any gift or inheritance taken by the donee or successor,

if, but only if, it is shown to the satisfaction of the Commissioners that -

(i) the unit is comprised in the gift or inheritance -

(I) at the date of the gift or at the date of the inheritance, and

(II) at the valuation date,

(ii) at the date of the disposition, the disponer is neither domiciled nor ordinarily resident in the State, and