In these challenging times, it is comforting to know that everyone can develop resilience. Dr Eddie Murphy explains how.Nobody can be protected from adversity all their lives. In fact, over-protection can result in poor problem solving and later, poor coping skills in the face of adversity. Recently, I planted a Tree of Hope in the People’s Park in Limerick as a symbol of how hope and brighter days will come after the storms pass. Indeed, some people are like trees in that, having survived the most challenging weather conditions and been tested by adversity, they will grow and endure.In reality, bad things happen. We all have periods of stress, loss, failure or trauma in our lives. But how we respond has a significant impact on our wellbeing. We often cannot choose what happens to us, but in principle, we can choose our attitude to what happens. It isn’t always easy in practice, but one of the most exciting findings from recent research is that resilience, like many other life skills, can be learned.What is resilience?Resilience comes from the Latin word resilio, meaning to jump back. It is increasingly used in everyday language to describe our ability to cope with, and bounce back from, adversity. Some define it as the ability to bend instead of break when under pressure or difficulty, or the ability to persevere and adapt when faced with a challenge. The same skills also make us more open to, and willing to take on, new opportunities. In this way, being resilient is more than just survival; it includes letting go, learning and growing, and finding healthy ways to cope.It’s not rareResearch shows that resilience isn’t a rare quality found in a few extraordinary people. One expert on the subject, Dr Ann Masten, describes it as ‘ordinary magic’, noting that it comes from our everyday capabilities, relationships and resources. She argues that resilience is dynamic and that we can be naturally resilient in some situations, or at some times in our lives, and not others. Each person and each case is different.We can all work on our resilience. We can’t always predict or control what life throws at us, but we can build a range of skills to help us respond flexibly, deal with challenges effectively, recover more quickly, and even learn and grow as a result. It can also lower our risk of depression and anxiety and enable us to age successfully. What’s more, the same skills can help us manage the fear of taking on new opportunities and help us develop in other ways too.Areas of influenceThree areas influence our resilience:our development as a child and  teenager;external factors such as our relationships with others or having a faith; andinternal factors, such as how we choose to interpret events, manage our emotions and regulate our behaviour.Parents and those who work with children can do much to help build the resilience of kids and teenagers. While as adults, we can’t change our childhoods, we can do plenty to develop our resilience within the second and third factors. Indeed, research shows that resilience is developable in adults as well as in children.Building resilience skillsThere is saying, ‘what doesn’t kill us makes us stronger’. Science has shown that it has some truth: experiencing some adversity during our lives does increase our resilience by enabling us to learn ways of coping and identify and engage our support network. It also gives us a sense of mastery over past adversities, which helps us to feel able to cope in the future. We have probably all experienced things as stressful initially, but later find that similar activities no longer phase us. It is important to learn that, through such struggles, our coping skills and resources can be taxed but not overwhelmed.Some psychologists argue that most of us aren’t prepared to face adversity. We, therefore, run the risk of giving up or feeling helpless in the face of difficulty. But by changing the way we think about adversity, we can boost how resilient we are. Based on extensive research, they believe that our capacity for resilience is not fixed or in our genes, nor are there limits to how resilient we can be. I like this, as it allows for hope that we can change.Resilience and relationshipsOne of the critical external sources of resilience is our network, such as family, friends, neighbours, and work colleagues. Taking time to nurture our relationships is a vital part of building resilience. Knowing when we need help and asking for it is an integral part of resilience. In this era of mental health awareness, reaching out and offering support is critical.Members and students can contact CA Support on 01 637 7342 or 086 024 3294, by email at casupport@charteredaccountants.ie or online at www.charteredaccountants.ie/ca-supportDr Eddie Murphy is a clinical psychologist, mental health expert and author. 

Paul McCourt and Fiona Hall consider the possible tax implications of current low asset values and what individuals can do to help protect family finances for the long-term.The COVID-19 outbreak is having a range of effects on families and individuals, with many investors seeing family finances suffer and the value of their assets fall in recent months. An important factor to remember at this point is that when an individual makes a gift, it is the current market value of the asset being gifted that applies for both inheritance tax (IHT) and capital gains tax (CGT) purposes.TrustsThe creation of a trust to hold assets for the benefit of the wider family or dependants has been a long-standing solution for many individuals seeking to pass assets to the next generation. Settling a trust is generally a chargeable IHT event. However, if the settlor’s nil rate band is fully available, individuals can transfer £325,000 of assets into the trust without incurring an IHT liability. This could increase to £650,000 for married couples jointly settling a trust with the availability of two nil rate bands. CGT hold-over relief may also be available so that the gift to trust does not trigger a CGT liability.For those considering using a trust, or who have already established one, now may be the time to gift or sell assets. When assets pass out of the trust to a beneficiary, either by way of an entitlement or an appointment by the trustees, any IHT and CGT liabilities are based on the current market value of the assets passing. Trustees may wish to consider whether the trust continues to meet its objectives and whether it is now appropriate to appoint assets out to trust beneficiaries.Personal giftsGifting an asset to another individual is often a potentially exempt transfer for IHT purposes. As such, if the donor survives for seven years from the date of the gift, it falls out of their IHT estate. However, if the donor does die in this period, the value of the assets gifted at the time the gift was made could become taxable.Where a gift fails the seven-year rule, subject to reliefs and the IHT nil rate band (currently £325,000), IHT could be payable on the gift (by the recipient or the executors) or the value of the estate. Making a gift when asset values are low will mitigate the potential IHT exposure for the individual considering gifting an asset.A gift is treated for CGT as being a disposal of the asset at market value by the donor. This could trigger a capital gain if the value exceeds the allowable cost unless the assets qualify for business assets hold-over relief.When asset values are lower, the likelihood of a gift triggering a gain is reduced, or a gift may give rise to a loss. Care should be taken in generating a loss on gifts, as any losses arising from the disposal of an asset to a connected person can only be set against gains that arise from other disposals to that same person. Capital losses generally carry forward to future years, but not back so timing is vital.Crystallising ‘paper’ lossesIndividuals may consider crystallising a current ‘paper’ or book loss on an investment and repurchasing a similar asset. Any such loss can then be offset against capital gains arising on asset disposals made in the same, or later, tax years. It is important to note, however, that ‘bed and breakfasting’ of shares is often ineffective for tax purposes and particular care is required with transactions conducted personally, via an individual savings account or between spouses.As with any investment decisions, independent investment advice should be sought before proceeding.Exercising share optionsWhere an individual exercises an option to acquire shares in an employer through a non-tax-advantaged share plan, income tax is charged on that exercise on the difference between the market value of the shares at the date of exercise and the amount paid for the shares under the option. If the shares acquired are ‘readily convertible’ (i.e. easy to sell for cash or shares in a subsidiary company) National Insurance contributions will also be due on the exercise of the option.Exercising such options while the value of a company is temporarily reduced could reduce tax liabilities in the longer-term. However, this is clearly a risk-driven investment decision on which independent investment advice should be sought before proceeding. One of the key benefits of holding an option is that it would often be exercised before an exit event (e.g. the sale of the company) so that there is an immediate return of value. In the absence of such an event, the implications of becoming a shareholder in the company, and the risk to the value thereby invested, should be considered carefully.Pensions – lifetime allowanceAn individual whose pension pot was previously above the lifetime allowance of £1,073,100 (and with no protection/enhanced protection) might choose to crystallise pension benefits now while the fund value is reduced to reduce/eliminate the lifetime allowance tax charge.There are many financial, investment and IHT issues to consider carefully before proceeding, but acting now may save tax in the long-term. Action should only be considered as part of overall wealth planning, including advice from an independent financial adviser.Short-term opportunity to achieve long-term goalsThis is a difficult time, but any temporary reduction in asset values may allow clients to pass assets into trust or to the next generation at a lower tax cost than both a year ago and a year from now.Fiona Hall is Principal, Personal Tax, at BDO Northern Ireland.Paul McCourt is Tax Principal at BDO Northern Ireland.

The Temporary Wage Subsidy Scheme is ever evolving in the face of uncertainty, writes Maud Clear.The Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020. Looking back 20 weeks on, in a world turned upside down by COVID-19, it is fair to say that the Scheme has evolved since its inception. With many businesses facing an uncertain road to recovery, the July Jobs Stimulus package was the next eagerly awaited phase in this evolutionary process.Revenue offered its services to the Department of Finance to pay out the subsidy through real-time reporting tools – an extraordinary move from an institution whose function is to collect tax.While the initial assessment in establishing eligibility was a significant exercise for many employers, Revenue provided consistency and support in their operation of the Scheme.That is until a programme of compliance checks was announced on 23 June for all employers availing of the Scheme. This was an unforeseen turn in the Scheme’s evolution, particularly when Revenue issued guidance on 20 April indicating: “We may in the future, based on risk criteria, review eligibility”.Such a broad stroke approach and the requirement for a response within five days have many employers questioning what is yet to come in the operation of the Scheme.Chartered Accountants Ireland, under the auspices of the CCAB-I, sought an extension to this response time. In response, Revenue may now allow for an extension of the five days where an employer contacts them to explain their difficulty in returning a response within the required timeframe.The announcement of an extension to the TWSS until the end of August came with a warning from the Minister for Finance that “this support cannot last forever”. As the challenges facing employers in re-opening continue to mount, assurance has since been provided by the Minister that the Scheme will not come to “an abrupt end”.  Most employers need the support of the TWSS to get back on their feet. Clarity on how they will get it, and for how long, will be a determining factor in their recovery. It is hoped that the ‘July Jobs’ stimulus package will provide that certainty.Maud Clear is Tax Manager at Chartered Accountants Ireland.

The prospect of an EU-wide digital tax raised its head again in June following developments at the OECD. Peter Vale and Kim Doyle consider if we are now closer to implementation of an EU digital tax across all member states, and the impact on Ireland’s offering.The EU agreed last year to park its digital tax proposals to allow global consensus to be reached through the OECD digital tax discussions.Both the EU and OECD proposals aim to allocate a portion of profits based on the location of consumers, reflecting the increasing value that businesses place on consumer data.In June, the US withdrew from the OECD’s digital tax discussions. This has increased the likelihood that the EU will push ahead with its own proposals.In the short-term, the impasse at OECD level is also likely to see other countries push ahead with unilateral digital tax proposals. Indeed, many EU countries have either implemented or proposed their own digital tax proposals.An EU digital taxThe EU’s original digital tax proposals envisaged a simple 3% turnover-based tax as an interim measure, subject to reaching agreement on a means of allocating profits based on digital activity. Given the complexities involved in arriving at such a means, the risk is that any interim ‘quick fix’, such as a flat turnover-based tax, could potentially become permanent.While countries are free to introduce their own digital tax measures, as several have done, implementation of an EU-wide digital tax regime would require unanimity across all EU member states. The need for unanimity could make it challenging to implement as certain countries, including Ireland, are not in favour of the existing EU digital tax proposals.However, the EU is looking to replace unanimity over tax decisions with a form of “qualified majority voting”. While such a change will itself require unanimity, political factors may lead to the removal of the requirement for unanimity in the future. This could potentially pave the way for easier implementation of EU-wide tax changes.Although the removal of the requirement for unanimity on significant EU tax decisions is some years away, countries are often reluctant to use a veto to block EU tax proposals. Hence the real possibility of an EU-wide digital tax in the short- to medium-term.COVID-19 will also drive countries to seek out additional tax revenues to fund spending, with digital tax from large multinationals likely seen as an easy target.What does it mean for Ireland?In recent years, many multinational companies (MNCs) with substantial operations in Ireland have moved their valuable intellectual property (IP) here. Over time, this would be expected to increase corporation tax revenues in Ireland.A simple 3% tax on the ‘digital’ revenues of large MNCs would increase the effective tax rate of these companies and thus dilute the benefit of our 12.5% corporate tax rate. This would impact low-margin businesses most and from a tax perspective, would make it less attractive to operate from Ireland.While the movement of IP to Ireland should see an increase in our corporate tax revenues, an EU-wide digital tax could see a pull the other way; it may cause some groups to reconsider their Irish presence.However, even if our tax regime becomes relatively less attractive, our 12.5% corporate tax rate may still make Ireland the most compelling location in Europe in which to do business and help us retain key employers.Digital tax optionsThe EU acknowledges that a 3% turnover-based tax is a blunt instrument and that more refined taxation of digital activity is the end goal. The OECD considered other options, which would involve looking at the level of activity in the selling country in determining an appropriate allocation between the selling country and the market jurisdiction. However, it is acknowledged that this is a difficult exercise – one that potentially involves a rewriting of transfer pricing principles – hence the EU proposal to start with a straightforward 3% turnover-based tax.Ideally, there would be agreement at EU level on a more sophisticated and accurate means of profit allocation rather than simply jumping into a turnover-based tax regime. While this might take some time to develop, it could be part of negotiations at EU level given that unanimity is required to implement any digital tax proposals (although countries would remain free to continue to develop their own digital tax regimes, which is far from an ideal scenario). A longer-term solution that reflects the value-added activities taking place in the selling jurisdiction, not merely market jurisdiction factors, would be better for Ireland. It would also encourage more knowledge-based businesses to locate here.Wider impactIf the price of any negotiation on digital tax proposals is that unanimity over tax decisions is removed, there is a longer-term vista of other EU proposals being pushed through. This would include the dreaded Common Consolidated Corporate Tax Base (CCCTB), which would again look to rewrite the rules in terms of the allocation of a group’s profits. Such moves would be bad for a small, open economy such as Ireland with significant profits diverted to larger market jurisdictions diluting the benefit of our 12.5% corporate tax rate.Once again, we are at a critical juncture in terms of global tax rule changes. Developments to date have generally been positive for Ireland. However, it would be dangerous to think that this will continue to be the case. In practice, our options are limited in terms of influencing the direction of changes to the tax landscape. In any future scenario, however, the location of high value-add activities should continue to play a key role in the allocation of a group’s profits. One thing that is not good for Ireland is uncertainty. Groups cannot make robust plans in an uncertain environment. The sooner there is clarity on digital tax changes, the better for Ireland.Ongoing robust corporate tax receipts evidence the generally positive impact that global tax changes have had in Ireland to date, with a movement away from tax havens to jurisdictions with substance. If Ireland can maintain a regime that both encourages and rewards innovation, we will be in the best possible place to emerge relatively unscathed from the latest round of changes.Kim Doyle FCA is Tax Director, Head of Knowledge Centre at Grant Thornton.Peter Vale FCA is Tax Partner, Head of International Tax at Grant Thornton.

The General Court of the European Union’s ruling in the Apple tax case affirms Ireland’s reputation as a suitable location for global establishment, argues Claire Lord.In 2016, the EU Commission decided that two tax rulings issued by the Revenue Commissioners in 1991 and 2007 in favour of Apple Sales International (ASI) and Apple Operations Europe (AOE) constituted unlawful state aid under EU law.ASI and AOE were companies incorporated in Ireland, but not tax-resident in Ireland. The contested tax rulings endorsed the methods used by ASI and AOE to determine the taxable profits in Ireland attributable to the trading activity of their respective Irish branches. The Commission calculated that, through these tax rulings, Ireland had granted Apple €13 billion in unlawful tax benefits, which therefore constituted unlawful state aid.The decision of the Commission was appealed to the General Court of the European Union by both Apple and Ireland.General Court’s decisionThe General Court annulled the Commission’s decision on the basis that the Commission did not succeed in proving that ASI and AOE had been granted a selective economic advantage and, by extension, unlawful state aid.The General Court agreed with the Commission’s approach on some fundamental legal issues such as how the principles of advantage and selectivity are to be assessed, the reference framework of Irish tax law and, in broad terms, the application of the ‘arm’s length’ principle. However, it also held against the Commission on several points of law and fact. In particular, it rejected the Commission’s primary argument that the Revenue Commissioners had granted ASI and AOE an advantage by not allocating the Apple group’s intellectual property licences held by ASI and AOE, and the associated sales income, to the Irish branches of ASI and AOE.The Commission had made this argument by effectively contending that such an allocation must be the case because ASI and AOE had no employees anywhere else, despite their boards conducting business outside of Ireland. The General Court found that approach to be wrong in law and fact. It held that as a matter of law, the Commission had to show that, in fact, the Irish branches of AOE and ASI carried out the taxable activity; it was not enough to contend that the Commission had not found such activity elsewhere.In addition, the General Court held that the evidence given by ASI and AOE demonstrated that the relevant taxable activities were not in fact carried out by the Irish branches.The General Court also held that the Commission did not demonstrate that methodological errors (which the Court accepted had occurred in the contested tax rulings) resulted in an advantage for AOE and ASI. While the General Court regretted the incomplete and sometimes inconsistent nature of the contested Irish tax rulings, those infirmities did not, in themselves, prove the existence of a selective advantage. Therefore, such errors did not constitute unlawful state aid.Lastly, the Court also found that the Commission did not prove that the contested tax rulings were the result of discretion exercised by the Revenue Commissioners, which had granted a selective advantage to ASI and AOE. Instead, it found that the correct analysis of 11 other rulings by the Revenue Commissioners was that the approach depended on the facts and this was not objectionable.The Commission may appeal the decision to the EU’s Court of Justice before 26 September. However, an appeal is only on points of law and not on findings of fact.The impact of the decisionThe General Court’s decision is a victory for the position argued by Apple and Ireland. Because it holds against the Commission on several points of law and fact, it will be a difficult decision to appeal successfully should the Commission decide to do so. Also, the points won by the Commission are points of law. They, therefore, may themselves be challenged in any cross-appeal and an adverse decision on any of those points could have systemic effects, which the Commission would not welcome.The decision is obviously newsworthy because of the parties involved, the value at stake and the current global focus on international tax, particularly in relation to multinationals and the digital economy. However, it is noteworthy that many of the points at issue are no longer of relevance for companies doing business in Ireland as the structures and approaches at the heart of the case have not been widely used here in recent years.It does, however, clarify that Ireland did not apply any selective treatment to Apple. It underscores Ireland’s reputation as a straightforward and rules-based jurisdiction which remains an eminently suitable location for global companies to establish significant operations.Claire Lord is a Corporate Partner and Head of Governance and Compliance at Mason Hayes & Curran.

Michael Cawley has enjoyed a stellar career. In this article, he shares his five favourite lessons in leadership.Over the past four decades, I have encountered some very impressive leaders in my professional life. From Coopers & Lybrand, where I trained to qualify as a Chartered Accountant, to Ryanair, where I worked as Deputy Chief Executive, I have seen many different types of successful leadership.However, the best leaders have all had several traits and characteristics in common. In this article, I discuss the five things great leaders do consistently. The best part about these five tips is that they are all doable with some thought and a little effort. There’s no magic and no secret sauce, but great leadership does require purposeful application.Present a clear missionBusiness isn’t rocket science but all too often, simple things become unnecessarily complicated. It is the job of the leader to simplify wherever possible, by establishing straightforward reporting lines and setting clear objectives. In doing so, your team will be better able to see their impact on the overall mission of the business. This is important as colleagues who can directly relate their efforts to business outcomes will ultimately raise their game to go above and beyond what is required of them. If you have a team of people working on this basis, the sky is the limit.It all begins with clarity, however, and that begins at the top of the organisation. An organisation’s leaders must understand the mission and communicate unambiguously to everyone – no fudge, equivocation or misunderstanding. Joe Schmidt often speaks about how great teams exceed the potential of their constituent parts, and the same applies in business. Be clear about what is required, get everyone pulling in the same direction, and your business’s performance will dramatically improve.Think beyond the possibleIn my view, we all achieve a small percentage of our potential, but good leaders help people see beyond the constraints and what they define as ‘possible’. As an example, in Ryanair we faced a seemingly insoluble issue in Italy some years ago. The airline’s schedule requires that the turnaround time at each airport for each aircraft is 25 minutes. To achieve this, Ryanair needs to refuel the aircraft while passengers disembark and baggage is removed. However, in Italy, uniquely in Europe, the law prevented airlines from fuelling the aircraft as passengers disembarked. Our punctuality in Italy was badly affected by this restriction and when every other option was exhausted, my colleague, the Director of Operations, was charged with the seemingly impossible task of getting the legislation changed.Initially, we all thought this was impossible but faced with no alternative, we developed an innovative strategy which convinced the Italian government of the merits of our case. This involved working at both local and national level at speed throughout Italy.This ability to challenge people so that they tackle issues that appear to be beyond them, but not so far beyond them to put them into a state of despair, is a delicate act – but if done right, can make the seemingly impossible, achievable.Develop self-confidenceLeadership can be a lonely place, particularly when you are the CEO. All leaders therefore need the self-confidence to see them through – not only during the tough times, but also day-to-day. Unfortunately, Irish people tend to harbour a high degree of self-doubt and this can lead to paralysis at the very moment decisiveness and action is required. But how can you build self-confidence as a seasoned professional? Success breeds confidence, and I am a big believer in excellence in basic execution. Too many people give up early – they hit a bump in the road and the journey ends there and then. Some people are also just waiting for you to fail. But if you obsess over the basics and execute brilliantly every single time, your chance of success will increase exponentially – and every little win will add to your confidence and self-belief.You also need to develop a relentless streak, because sometimes even excellent execution will not cut it the first or second time around. Michael O’Leary is a good example of this approach with his unwavering persistence and focus on the end goal. So, begin with the basics, execute brilliantly, and do not give up.Be paranoidTo become, and remain, successful in business, you cannot rest on your laurels. Andrew Grove, the founder of Intel who is famously quoted as saying “only the paranoid survive”, insisted that Intel double the capacity of their microchip every two years in order to stay ahead of the competition. He saw this as key to remaining number one in their sector.The truth is, once you or your business become a success, people are out to get you. Your competitors work night and day to catch up with you, so you need to work even harder to stay ahead. This paranoia isn’t the debilitating kind, however. It drives you to become better and see evolution and change as standard practice.Ryanair floated in 1997, and our grand finale on the investor roadshow was in New York. At the time, we could produce a seat for a fraction of the cost of our nearest competitor and investors jumped on the opportunity. The offering was 19 times oversubscribed but instead of thinking we’d made it, we knew that we had to continue to work hard to keep driving our costs down. Today, a number of airlines have a similar cost base to what Ryanair had in 1997, but we have moved on because we knew we had to. We still have the lowest cost base in Europe by far, which is the key competitive advantage when you are in the short-haul air travel business. This type of paranoia is driven by the realisation that, because you are a success, you inevitably become a target for your competitors and you must be at least one step ahead at all times.Booking.com is another prime example of this phenomenon. The company is valued at $70 billion and run by a formidable bunch of people. Every year, they make up to 10,000 changes to their website – most of which are so minute as to be virtually undetectable. But they continuously work to test and iterate based on what customers respond to – and in that way stay ahead of the competition.It’s all very well being paranoid, but how do you stay ahead as an individual? You must learn continuously and be acutely aware of the fact that you do not have a monopoly on wisdom. I am 66 years of age and I am still conscious of my shortcomings. To overcome them, I read and research continuously.Energy and enthusiasmAs a leader, you set the tone – and this is most apparent when it comes to your energy and enthusiasm. Your colleagues at all levels of the organisation will pick up on everything from the urgency with which issues are dealt with and the speed of your commitments to your body language and your choices. Energy and enthusiasm flow downhill, as does lethargy and tardiness, so you need to ensure that, as a leader, you are sending the right signals to your people. And although it may be more challenging to do in a remote working environment, it’s still possible if you adapt.The best time to test for energy and enthusiasm is at the hiring stage. Employ people with as much, if not more, enthusiasm than you. Look for people with integrity and honesty, who seek to say and do the right thing even when it isn’t what you want to hear.No amount of talent can make up for a poor attitude, so be careful in your hiring processes and set the bar high in your day-to-day work environment.Michael Cawley FCA is an independent non-executive director and former Deputy Chief Executive Officer at Ryanair.