Revenue Note for Guidance

The content shown on this page is a Note for Guidance produced by the Irish Revenue Commissioners. To view the section of legislation to which the Note for Guidance applies, click the link below:

Revenue Note for Guidance

S508Y Information

Summary

This section provides that where an event occurs requiring the withdrawal of relief, notification by the company and persons connected with the company, or in certain instances, by individuals, must be made to the inspector. In addition, the inspector has powers to require information.

Details

(1) In order to satisfy themselves that the conditions necessary for the claiming and granting of the relief have been satisfied, the Revenue Commissioners may require the qualifying company to provide them with evidence as they consider necessary and may consult with persons or body of persons in their opinion might be of assistance.

(2) The company, and any person connected with the company who has knowledge of the matter, is obliged to notify the inspector in writing within 60 days of the event, if relief is to be withdrawn because of the occurrence of one of the following events -

  • The company ceases to be a qualifying company
  • The company ceases to be carrying on relevant trading activities
  • The company gives value to any of its shareholders
  • The company does anything which disqualifies an individual from the relief under the replacement capital rules
  • The eligible shares on which relief has been claimed were not issued for bonafide commercial purposes.

In the case of a connected person, the 60 day period runs from the date of his/her coming to know of the event.

(2A) In the event that a person does not comply with the limits set out in subsection (2) a penalty of €3,000 will apply.

(2B) In the event that the person mentioned in subsection (2) is a company, that company will be liable to a penalty of €4,000 and the secretary of the company will be liable to a separate penalty of €3,000.

(3) Where there has been a claim for relief the inspector may serve a notice, requiring the provision of information, on the person concerned, the company and any person controlling it in the case of section 490(3) and both in the case of section 501 should he/she have reason to believe that certain events justifying the refusal of relief have occurred.

    These events are the person claiming relief has subscribed for the company’s shares as part of any arrangement which provides for another person to subscribe for shares in another company for which that individual, or any other individual who is a part to the arrangement, is connected (section 501);

    the company exercises or acquires some form of direct or indirect control over another company or comes under the control of another company (section 490(3));

    the shares have been subscribed for and issued as part of a scheme, the main purpose or one of the main purposes of which is the avoidance of tax (section 501).

Where relief has been granted in respect of shares in a company, an inspector is able to trace the ultimate beneficiary where value passes from the company in the form of a payment or asset which may constitute value received with the meaning of section 508P or section 508R The recipient of such a payment or asset and any person on whose behalf it was received can be required by an inspector to state whether the payment or asset received by him/her was received on behalf of another person and if so to give the name and address of the person on whose behalf it was received.

(5)(b) Where relief has been claimed in respect of shares, an inspector is entitled to ascertain the name and address of the beneficial owner of the shares not only where they are held in the name of a nominee but also where they are held through a series of nominees.

(6) Accordingly, where any relief has been claimed, the inspector is empowered to require any person who holds or has held shares in the company, and any person on whose behalf any such shares are or were held, to state whether they are or were ld on his/her address of that other person.

(7) No obligation of secrecy can preclude an inspector from disclosing to a company that relief has been given or claimed in respect of a particular number or proportion of tis shares. (This power would not, however, entitle him/her to disclose which or whose shares have been the subject of relief).

Relevant Date: Finance Act 2021