Finance Act 2010

Modernisation of capital acquisitions tax administration.

147.— (1) The Principal Act is amended—

(a) in sections 16(d) and 21(d) by deleting “, and this Act shall apply, in its application to that charge for tax, as if that object of the discretionary trust were a person referred to in section 45(2)”,

(b) by substituting the following for section 45:

“Accountable persons.

45.— (1) The person accountable for the payment of tax is—

(a) the donee or successor, and

(b) in the case referred to in section 32(2), the transferee referred to in that subsection, to the extent referred to in that subsection.

(2) The tax shall be recoverable from the person referred to in subsection (1) and the personal representative of such person, where that person has died, on whom the Commissioners have served notice in writing of the assessment of tax in accordance with section 49(4).

(3) The person referred to in subsection (1) and the personal representative of such person shall, for the purposes of paying the tax, or raising the amount of the tax when already paid, have power, whether the property is or is not vested in that person, to raise the amount of such tax and any expenses properly paid or incurred by that person in respect of raising the amount of such tax, by the sale or mortgage of, or a terminable charge on, that property or any part of that property.

(4) Every public officer having in such person’s custody—

(a) any rolls, books, records, papers, documents or proceedings, or

(b) any other data maintained in electronic, photographic or other process,

the inspection of which may tend to secure the tax, or to prove or lead to the discovery of any fraud or omission in relation to the tax, shall at all reasonable times permit any person authorised by the Commissioners to inspect those rolls, books, records, papers, documents or proceedings or that other data so maintained, and to copy by any means, take notes and extracts as that person may deem necessary.”,

(c) by substituting the following for paragraph (a) of subsection (4) of section 45A:

“(a) where the requirements of section 46(2), requiring the delivery of a return on or before the dates mentioned in section 46(2A), are met, for the period of 6 years commencing on the valuation date of the gift or inheritance, or”,

(d) by inserting the following after section 45A:

“Liability of certain persons in respect of non-resident beneficiaries.

45AA.— (1) Where—

(a) property passing under a deceased person’s will or intestacy or under Part IX or section 56 of the Succession Act 1965 , or otherwise as a result of the death of that person, is taken by a person or persons who is or are not resident in the State,

(b) the personal representative or one or more of the personal representatives, where there is more than one personal representative, of the deceased person’s estate is or are resident in the State, and

(c) the person or persons referred to in paragraph (a) do not deliver a return and make a payment of tax in accordance with section 46(2),

then, the personal representative or one or more of the personal representatives, as the case may be, and the solicitor referred to in section 48(10), shall be assessable and chargeable for the tax payable by the person or persons referred to in paragraph (a) to the same extent that those persons are chargeable to tax under section 11.

(2) Subsection (1) shall not apply where a liability to inheritance tax arises by virtue of the fact that a person referred to in paragraph (a) of that subsection has not disclosed that he or she has received a taxable gift or a taxable inheritance prior to the taxable inheritance or taxable inheritances, as the case may be, consisting of property referred to in subsection (1)(a) and the personal representative or solicitor referred to in section 48(10), as the case may be, has made reasonable enquiries regarding such gifts or inheritances and has acted in good faith.

(3) The personal representative or one or more of the personal representatives and the solicitor referred to in section 48(10) shall be liable only to the extent that that person or those persons, as the case may be, have control of the property referred to in subsection (1)(a) or which that person or those persons would, but for that person’s or those persons’ own neglect or default, have control of such property.

(4) The persons referred to in subsection (3)—

(a) shall be entitled to retain so much of the property referred to in subsection (1)(a) as may be required to pay the tax in respect of the person or persons referred to in paragraph (b) of that subsection, and

(b) shall have power, whether the property is or is not vested in that person, to raise the amount of such tax and any expenses properly paid or incurred by that person in respect of raising the amount of such tax, by the sale or mortgage of, or a terminable charge on, that property or any part of that property.”,

(e) in section 46(2)—

(i) by substituting “, or who is accountable by virtue of section 45(1),” for “, or section 45(1),”,

(ii) by deleting “, shall within 4 months after the relevant date referred to in subsection (5)”, and

(iii) by deleting “primarily” in paragraph (a)(i),

(f) in section 46 by inserting the following after subsection (2):

“(2A) For the purposes of subsection (2) (other than in the case of an inheritance to which section 15 or 20 applies), where the relevant date occurs—

(a) in the period from 1 January to 31 August in any year, tax shall be paid and a return shall be delivered on or before 31 October in that year, and

(b) in the period from 1 September to 31 December in any year, tax shall be paid and a return shall be delivered on or before 31 October in the following year.

(2B) Subsection (2A) shall only apply as respects tax to be paid and returns to be delivered as respects valuation dates arising on or after such day as may be appointed by order of the Commissioners.”,

(g) in section 46 by substituting the following for subsection (3):

“(3) Subsection (2)(c) (other than in respect of tax arising by reason of section 20) shall be complied with, where the tax due and payable is inheritance tax which is being paid wholly or partly by the transfer of securities to the Minister for Finance under section 56, by—

(a) making an application to the Commissioners to pay all or part of the tax by such transfer,

(b) completing the transfer of the securities to the Minister for Finance within such time, not being less than 30 days, as may be specified by the Commissioners by notice in writing, and

(c) duly paying the excess, if any, of the amount of tax referred to in subsection (2)(b) over the nominal face value of the securities tendered in payment of the tax in accordance with paragraph (a).

(3A) A return to be delivered in accordance with subsection (2A) shall only be delivered in accordance with the provisions of Chapter 6 of Part 38 of the Taxes Consolidation Act 1997 except where a relief or an exemption (other than the exemption referred to in section 69) is not being claimed by a person under this Act and the interest taken by a person in property is an absolute interest which is not subject to any conditions or restrictions.”,

(h) by deleting section 46(6),

(i) in section 46(13) by substituting “the Commissioners may by notice in writing require a disponer to deliver to them within such time, not being less than 30 days, as may be specified in the notice,” for “any accountable person who is a disponer shall within 4 months of the valuation date deliver to the Commissioners”,

(j) by deleting section 47(4)(a)(ii),

(k) in section 48 by substituting the following for subsection (1):

“(1) In this section—

‘Inland Revenue Affidavit’ means the document, completed by or on behalf of the intended applicant or intended applicants for probate or letters of administration and sworn by them before a commissioner for oaths, a practicing solicitor or a court clerk, as the case may be;

‘Probate Office’ includes a district probate registry.”,

(l) in section 48 by inserting the following after subsection (4):

“(5) Except where submitted in accordance with regulations made under subsection (8), the Inland Revenue Affidavit and the statements, accounts and additional affidavits referred to in subsections (2) to (4) shall be submitted to the Probate Office in duplicate.

(6) As soon as practicable after probate or letters of administration has or have been issued, the Probate Office shall transmit to the Commissioners such information as is held in electronic form by the Probate Office and which is relevant for the purposes of this Act.

(7) Except where submitted in accordance with regulations made under subsection (8), the Probate Office shall send one copy of the Inland Revenue Affidavit referred to in subsection (5) together with a copy of the will (if any) to the Commissioners as soon as practicable after probate or letters of administration has or have been issued.

(8) (a) Subject to paragraph (b), the Commissioners shall make regulations permitting the submission to the Probate Office of the Inland Revenue Affidavit, and the other documents referred to in subsections (2) to (4), by simultaneous transmission of these documents in electronic form to that Office and to the Commissioners.

(b) Regulations under this subsection shall only be made by the Commissioners where they are satisfied that both the Probate Office and the Commissioners have the technical competence and ability to continue to perform their respective functions concerned if the regulations are made.

(c) Regulations under this subsection may contain such incidental and supplementary matters as appears necessary or appropriate to the Commissioners for the purpose of giving effect to this subsection.

(9) The Commissioners and the Probate Office shall both have access to the affidavits and documents that have been transmitted electronically under subsection (8).

(10) Where—

(a) property passing under the deceased person’s will or intestacy or Part IX or section 56 of the Succession Act 1965 , or otherwise as a result of the death of that person, is taken by a person or persons who is or are not resident in the State,

(b) the market value of the property referred to in paragraph (a) taken by any person referred to in that paragraph exceeds €20,000,

(c) the intended applicant or all the intended applicants, where there is more than one intended applicant, for probate or letters of administration is or are resident outside the State, and

(d) a return would be required to be delivered to the Commissioners in respect of such property in accordance with section 46(2) if the valuation date in respect of that property were the date of death of that person,

then, the intended applicant or the intended applicants, as the case may be, for probate or letters of administration shall appoint a solicitor who is lawfully practicing in the State to act in connection with the administration of the deceased person’s estate.

(11) The Probate Office shall not issue probate or letters of administration in respect of a deceased person’s estate in any case to which subsection (10) applies unless a solicitor lawfully practicing in the State has been appointed by the intended applicant or the intended applicants to act in connection with the administration of the deceased person’s estate.”,

(m) by inserting the following after section 49(1):

“(1A) The Commissioners may issue an assessment to a person referred to in section 45(1) where a return has not been delivered to them under section 46(2).”,

(n) in section 51 by substituting the following for subsection (2)(a):

“(a) Simple interest is payable, without deduction of income tax, on the tax where the relevant date (within the meaning of section 46(5)) occurs—

(i) in the period from 1 January to 31 August in any year, from 1 November in that year to the date of payment of that tax, and

(ii) in the period 1 September to 31 December in any year, from 1 November in the following year to the date of payment of that tax,

and the amount of that interest shall be determined in accordance with paragraph (c).”,

(o) in section 51 by substituting the following for subsection (4):

“(4) Where tax and interest, if any, on that tax is paid within 30 days of an assessment of tax made by the Commissioners in accordance with section 49, interest shall not run on that tax for the period of 30 days from the date of that assessment or for any part of that period.”,

(p) by inserting the following after section 53:

“Surcharge for late returns.

53A.— (1) In this section ‘specified return date’ means—

(a) in relation to a valuation date occurring in the period 1 January to 31 August in any year, 31 October in that year, and

(b) in relation to a valuation date occurring in the period 1 September to 31 December in any year, 31 October in the following year.

(2) For the purposes of this section—

(a) where a person fraudulently or negligently delivers an incorrect return on or before the specified return date, that person shall be deemed to have failed to have delivered the return on or before that date unless the error in the return is remedied on or before that date,

(b) where a person delivers an incorrect return on or before the specified return date, but does so neither fraudulently nor negligently and it comes to that person’s notice (or, if he or she has died, to the notice of his or her personal representative) that it is incorrect, the person shall be deemed to have failed to have delivered the return on or before the specified return date unless the error in the return is remedied without unreasonable delay, and

(c) where a person delivers a return on or before the specified return date, but the Commissioners, by reason of being dissatisfied with any information contained in the return, require that person, by notice in writing served on him or her under section 46(7), to deliver such statement or evidence as may be required by them, the person shall be deemed not to have delivered the return on or before the specified return date unless the person delivers the statement or evidence within the time specified in the notice.

(3) Where a person fails to deliver a return on or before the specified return date, any amount of tax which would have been payable if such a return had been delivered shall be increased by an amount (in this section referred to as ‘the surcharge’) equal to—

(a) 5 per cent of the amount of tax, subject to a maximum increased amount of €12,695, where the return is delivered before the expiry of 2 months from the specified return date, and

(b) 10 per cent of the amount of tax, subject to a maximum increased amount of €63,485, where the return is not delivered before the expiry of 2 months from the specified return date.

(4) If the assessment to tax made on a return is not the amount of tax as increased in accordance with subsection (3), then, the provisions of this Act and Part 42 of the Taxes Consolidation Act 1997 shall apply as if the tax contained in the assessment were the amount of tax as so increased.”,

(q) in section 54(1) by substituting “monthly instalments over a period not exceeding 5 years in such manner as may be determined by the Commissioners, the first of which is due on 31 October immediately following the valuation date” for “5 equal yearly instalments, the first of which is due at the expiration of 12 months from the date on which the tax became due and payable”,

(r) by deleting sections 60, 61, 63(4) and 108, and

(s) in section 109(2) by substituting “€50,000” for “€31,750”.

(2) The Taxes Consolidation Act 1997 is amended—

(a) by inserting the following after section 951(1):

“(1A) The prescribed form referred to in subsection (1) may include such matters in relation to gift tax and inheritance tax as may be required by that form.”,

(b) in section 980 by inserting the following after subsection (15):

“(16) In the case of a disposal to which this section applies, the person making the disposal shall provide details (if applicable) on application, if the form on which the application is made so requires, for a certificate referred to in subsection (8) relating to—

(a) whether or not the asset being disposed of was acquired by way of gift or inheritance,

(b) the market value of the asset on the date it was acquired, and

(c) whether or not gift tax or inheritance tax was paid in respect of the asset.”.

(3) The provisions of sections 45, 60 and 63(4) of the Principal Act as they applied any time before the passing of this Act, or any corresponding provision in a previous enactment, shall not apply to gifts and inheritances taken before the date of the passing of this Act except where the Revenue Commissioners have instituted proceedings to recover gift tax or inheritance tax before that date.

(4) (a) This section (other than paragraphs (e)(ii), (k), (l), (n) and (o) of subsection (1)) applies on and from the date of the passing of this Act.

(b) Paragraphs (e)(ii), (k), (l), (n) and (o) of subsection (1) apply on and from the date the Revenue Commissioners make the order referred to in section 46(2B) of the Principal Act.