Part 5 of the Finance Bill contains a number of provisions in relation to CAT, the most noteworthy of which are the changes to the payment and filing dates and the removal of secondary accountability.
Currently taxpayers who receive a gift or an inheritance must file a return and pay any tax due within four months of the valuation date. As a result of the Finance Bill the dates for paying CAT and filing returns are brought somewhat more in line with other self-assessment taxes. Where the valuation date arises in the period from 1 January to 31 August the pay and file date will be on or before 31 October in that year. Where the valuation date arises in the period from 1 September to 31 December the pay and file date will be on or before 31 October in the following year. As a result of the changes interest will now run on outstanding tax from 1 November in the relevant year. These changes will come into effect on a date to be specified in an order to be made by the Revenue Commissioners.
As readers will be aware, previously if the recipient of a gift or an inheritance failed to pay the relevant tax certain individuals including the grantor of the gift, trustees, guardians and personal representatives became accountable for the tax due. This secondary accountability has now been removed and the abolition applies retrospectively.
While secondary liability has been abolished, there is provision in the Bill for the appointment of an Irish resident agent who will be responsible for the payment of any tax due in cases where one or more of the beneficiaries of a gift or inheritance are not resident in Ireland.
The Bill also made amendments which will affect those who having claimed agricultural relief, sell agricultural land within the six year claw back period and reinvest in other agricultural property. The amendments now mean that the purchase of agricultural property which was previously transferred to a spouse will not constitute a reinvestment in 'other agricultural property' for the purposes of agricultural relief and will not avoid a claw back of the original relief claimed.
Other provisions relevant to CAT include the extension of the exemption from CAT for units in common contractual funds and investment undertakings to units in collective investment schemes, and the removal of the requirement for Revenue to certify the Inland Revenue Affidavit before probate or letters of administration are issued by the Probate Office.