Recognised Clearing Systems Securitisation Regulation: Notification of Investment

Revenue has updated the Tax and Duty Manual which details Revenue’s arrangements for implementing EU and OECD exchange of information requirements In respect of tax rulings.  The guidance has been updated to: reflect the DAC8 changes that will bring individuals into scope (section 1.1), clarify spontaneous exchange of information for rulings (sections 3.1 and 4.1), and reflect amendments under DAC8, including updates to the allowable use of information in line with Article 16 DAC (section 3.8). The updated list of jurisdictions covered by the OECD framework with which Ireland has a legal basis to spontaneously exchange information with is contained in Annex 3.

Revenue has updated the Tax and Duty Manual which outlines guidelines for  the write-out of uncollectable tax debts. The preface now includes the Small Company Administrative Rescue Process among the likely types of scenarios where tax may be irrecoverable.

Finance Bill 2024 was recently published and contains the legislative proposals to implement the changes to the stamp duty announced by the Minister for Finance in his recent Budget speech. The revised rates on conveyances of residential property which apply from 2 October 2024 are as follows: 1 percent on consideration up to €1 million, 2 percent on the next €500,000 of consideration, and 6 percent on the balance. Where the conveyance is in respect of three or more apartments in the same apartment block, the rates are 1 percent on the consideration up to €1 million and 2 percent on the on the balance. In addition, the higher rate of stamp duty that applies on certain bulk purchases of residential property (excluding apartments) has increased to 15 percent. Readers should note that transitional measures apply the rates that were in force prior to 2 October 2024 to instruments executed between 2 October 2024 and 1 January 2025 where: there was a contract in place before 2 October 2024 that was binding, and the instrument contains a certificate to this effect.

Next Friday 1 November 2024 is the liability date for 2025 Local Property Tax (LPT). The person liable for the property on 1 November 2024 must pay the LPT charge for 2025, even if they dispose of the property between 1 November 2024 and 31 October 2025. Property owners are reminded that where a residential property has been newly built or it has been refurbished and has become occupied/suitable for use as a dwelling between 2 November 2023 and 1 November 2024, the property is liable for LPT in 2025 by the above deadline. A taxpayer who owns a property which is newly liable for LPT is required to value their property as at 1 November 2021. Revenue’s website contains guidance on valuing newly liable properties, with further information on LPT available on Revenue’s dedicated LPT webpage. 

Readers are reminded that Thursday 7 November 2024 is the return filing date for Vacant Homes Tax (VHT). The VHT is due on residential properties that are liable to Local Property Tax and are occupied for less than 30 days in the year ending 31 October 2024. Further information is available on Revenue’s website.   VHT returns can be submitted via Revenue’s myAccount, ROS or the LPT Portal. The system will guide property owners through the three-step process to review their details, submit their return and make a payment if necessary.  

Revenue has updated the Return of Qualifying Investments in a Qualifying Company (Form RICT) and Return of Information of an Investment Fund Return (Form IF) to reflect the changes made to the Employment Investment Incentive and related schemes in Finance (No.2) Act 2023. These changes were largely driven by amendments required under the EU General Block Exemption Regulation. The returns are now available in Revenue’s eBrief No. 262/24 in respect of investments made in 2024, with updated instructions and explanatory notes for each.

The Minister for Finance, Jack Chambers TD has published the report of the Funds Sector 2030 review. The Institute, under the auspices of the CCAB-I, responded to the review in September 2023 and we now welcome the report of the review group. The Department of Finance commenced the review to understand the state of the Irish fund sector and the extent to which Ireland’s tax, legal and regulatory framework remains best-in-class. Given the many developments in recent years, the review aims to support the long-term growth in the sector in Ireland, including in the retail investment sector. Concluding that Ireland is well placed to grow in the funds and asset management sector while noting that “what has worked for Ireland in the past will not necessarily work into the future”, the review team has developed a set of recommendations to address the material issues identified in the review. As with any change in legislation and regulation, the Exchequer impact of those changes will need to be carefully considered. So, the phased introduction of these changes is recommended, beginning with changes to the Investment Undertaking Tax regime. One of the recommendations call for the reform of the taxation of Irish-domiciled funds to align with the treatment of equivalent products in EU, EEA and OECD territories. The following proposals are noted in the report: Remove the eight-year deemed disposal requirement, Align the tax rates for Investment Undertaking Tax and Life Assurance Exit Tax with the CGT rate (currently 33 percent), and Allow for a limited form of loss relief. Commenting on today’s publication Minister Chambers said: “The story of the funds industry over the last five years has been one of growth, with 22% growth in direct employment over the last five years, it’s important to recognise where we have been successful. However, it is even more important to understand where we need to move to, to be successful in the future, that was a key task for this Review. The regionalisation of the sector is a key feature of the funds industry here. There are people living in Donegal, Cork, Limerick, Kilkenny and Kerry working in the sector because of firms who have established their Irish operations there. People no longer have to move to Dublin or abroad to pursue a career in the funds sector. And for those who have worked in funds abroad, gaining experience and expertise, Ireland now offers them attractive careers to return to. The fact that the review was commissioned and undertaken is a sign of the importance we see in the funds and asset management sector. The review has had a positive impact, leading to a period of deeper thought, not just on today’s priorities, but the future outlook and how the sector interacts with Government, with regulators and with its customers. I would like to thank everyone who responded to the consultation, including many individual taxpayers, and those who engaged in further discussions with the Review Team subsequently. I would also like to that the Institute of Banking for producing a thorough and engaging history of the sector which I am pleased to publish alongside the Review today.”

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs Team. Miscellaneous guidance updates and publications Reference Document for The Customs Tariff (Establishment) (EU Exit) Regulations 2020, Customs, VAT and excise UK transition legislation from 1 January 2021, Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS), Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS), External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service, Safety and security requirements on imports and exports, Making an entry summary declaration, and Data Element 2/3: Document and Other Reference Codes: Licence Types — Imports and Exports of the Customs Declaration Service (CDS).

In this week’s miscellaneous updates, we bring you news of a new form which should be used in the event of insolvency where a business pays plastic packaging tax and needs to deregister, and regulations have been laid to introduce the Independent Film Tax Credit. HMRC has also published a new Creative Industries Expenditure Credit Manual and guidance has been published on how public bodies can get technical advice and support from HMRC. The plastic packaging tax and insolvency scenarios HMRC has introduced a new digital form which businesses must use to: notify HMRC of an insolvency event, submit plastic packaging tax returns, and deregister from this tax. Independent Film Tax Credit Earlier this month on 9 October, regulations were laid to implement the new Independent Film Tax Credit (IFTC). This was announced by the previous government in the March 2024 Budget and will provide an uplift of 19 percent to the existing Audio-Visual Expenditure Credit. It is specifically targeted at low-budget British films with a budget of up to £15 million but will be tapered for those with a budget of up to £23.5 million. Companies will be able to apply to HMRC to claim the IFTC from 1 April 2025 if principal photography began on or after 1 April 2024. Certification applications for the enhanced uplift commence from tomorrow, 30 October 2024. Support with tax for public bodies HMRC has published guidance on how public bodies, such as the NHS, housing associations, local authorities, etc. can get technical advice and support from HMRC.

There are just two days to the 31 October 2024 self-assessment paper filing deadline for 2023/24 in order to avoid penalties. Readers are reminded that if an online self-assessment return cannot be filed by virtue of one of the online filing exclusions or special cases (search GOV.UK for details as these regularly change) meaning the return must be filed on paper instead, then in those cases, the 2023/24 paper filing deadline is extended to 31 January 2025. A reasonable excuse claim should accompany such returns.

Tomorrow sees Chancellor of the Exchequer Rachel Reeves deliver the first Labour Party Budget in nearly fifteen years. The Institute’s Tax Team will be analysing the Budget’s tax announcements and a newsletter reporting on key areas will issue to members. Detailed analysis will follow in Chartered Accountants Tax News next Monday 4 November and in subsequent weeks.