Revenue Precedent

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Revenue Precedents

Covenants can be made to two or more individuals. References to a “person who is an individual” excludes companies. IT903000

Payments made before date of deed of covenant is not an effective disposition of income for the purposes of section 792 as the payment is not made by virtue or in consequence of the disposition. IT922015

The 5% restriction, which applied in relation to covenants from parent to child, applies in the case of a covenant from a natural/biological parent to his/her child who had been given up for adoption. The adopted child remained the “child” of the natural parent for the purposes of covenant relief. IT952503

A covenant to a college or university should be capable of lasting four years. IT952528

Section 792 did not apply to pensions payable to former partners because they were paid for valuable and sufficient consideration. Neither did section 242 apply to such covenants. IT952003

A person suffering from chronic back pain will be considered to be permanently incapacitated for the purposes of covenant relief if there is evidence to show the person is in fact incapacitated and that the condition is permanent. IT952544

Income which qualifies for foreign earnings deduction is excluded from total income of the covenantor for the purposes of calculating the 5% restriction for covenant relief. IT962508

Relief is due for an unwitnessed deed of covenant. There appears to be no rule requiring a deed of covenant to be witnessed. IT932016

When a Deed of Covenant is open-ended it is void of uncertainty in that it does not set out the exact period for which the covenant is to last, nor does it set out the payment date. CHY 5846

A deed which includes the wording 'or for as long as I shall remain a member of Seanad Eireann' is effective per the office of the Revenue Solicitor given that it is capable of lasting four years. CHY 3968

Covenants – Research College. Correct procedure/s for establishment of a research college – see information leaflets in conjunction with CHY 6733.

The amount of a Deed of Covenant may vary from year to year i.e. the amounts can be 'front loaded' e.g. first payment £1,000 – remaining payments of £5. CHY 7633

The percentage of time devoted to the teaching of natural sciences should be equal to the percentage of the general expenditure of the school attributed towards the teaching of natural sciences. CHY 7633