57 Overpayment of tax

Summary

The Finance Act 2003 significantly altered the regime for repaying interest where capital acquisitions tax has been overpaid.

The new section 57 restricts the repayment of interest on overpayments of capital acquisitions tax (including probate tax) to valid claims made within 4 years of the valuation date or the date of payment of the tax concerned. The latter date applies where tax is paid within 4 months after the valuation date. A valid claim is one where the Revenue Commissioners have been provided with all the information to enable them establish the extent of the overpayment.

The section also provides that interest on a repayment of capital acquisitions tax will only be paid where that repayment has not been made within 6 months of receiving a valid claim for repayment. There is an exception to this general rule where the Revenue Commissioners have made an error in the operation of capital acquisitions tax. The rate of interest on repayments of capital acquisitions tax will be at the rate of 0.011% per day or part of a day.

The section came into effect, in general, by way of Ministerial Order on 1 November 2003. Before the section came into effect, overpayments of capital acquisitions tax were dealt with under the existing section 57, which did not require that claims be made within 4 years of the valuation date or the date of payment of the tax concerned. In addition, all overpayments of capital acquisitions tax are entitled to be paid with interest at the rate of 0.0161% per day or part of a day regardless of the circumstances surrounding the overpayment, where the claim for repayment was made before the provisions of the new section 57 come into effect.

Details

(1) “relevant date”, in relation to capital acquisitions tax, means—

• the date which is 183 days after the date on which a valid claim in respect of the repayment is made to the Revenue Commissioners, or
• where the repayment is due to a mistaken assumption in the operation of capital acquisitions tax on the part of the Revenue Commissioners, the date which is the date of the payment of capital acquisitions tax, interest, surcharge or penalty, as the case may be, which has given rise to that repayment;

“repayment” means a repayment of capital acquisitions tax including a repayment of—

• any interest charged,
• any surcharge imposed,
• any penalty incurred,

under the provisions of the Act;

“tax” includes probate tax, payment on account of tax, interest charged, a surcharge imposed or a penalty incurred under any provision of the Act.

(2) Where a claim to repayment made to the Revenue Commissioners is a valid claim, they will give relief by way of repayment of the excess or otherwise as is reasonable and just, subject to the provisions of the section.

(3) Notwithstanding subsection (2), no tax will be repaid to an accountable person in respect of a valid claim unless that valid claim is made within the period of 4 years commencing on – (a) 31 October in the year in which that tax was due to be paid in accordance with section 46(2A), or (b) the valuation date or the date of the payment of the tax concerned (where the tax has been paid within 4 months of the valuation date) in respect of inheritances to which sections 15(1) and 20(1) apply.

(4) Subsection (3) will not apply to a claim for repayment arising in respect of discretionary trust tax under section 18(3) or under Double Taxation Treaties with the United States of America or the United Kingdom which allow a period longer than 4 years.

(5) This provision deals with the transitional measures and ensures that the “new” regime will not apply to a claim for repayment of tax arising on or before 28 March 2003, where a valid claim is made on or before 31 December 2004.

(6) Where a repayment of tax is being made in respect of a valid claim, simple interest will be payable at the rate of 0.011% for each day or part of a day for the period commencing on the relevant date (as defined in subsection (1)) and ending on the date that the repayment is made.

(7) A claim for repayment will be treated as a valid claim where it has been made in accordance with any requirements of the existing law (if any) and where all necessary information required by the Revenue Commissioners in support of the claim has been furnished to them.

(8) Interest will not be payable under the section where the amount is €10 or less.

(9) No interest will be payable under the section in respect of a repayment or part of a repayment in respect of which interest is payable under any other provision of any other enactment.

(10) Income tax will not be deducted from any payment of interest and that interest will not be reckoned in computing income for the purposes of the Tax Acts.

(11) The Minister may, from time to time, make an order prescribing a rate for the purposes of subsection (6). In addition, any such order made by the Minister for Finance must be laid before Dáil Éireann as soon as possible after it is made. If a resolution annulling the order is passed by Dáil Éireann within 21 sitting days after the order is laid before it, the order will be annulled. However, this will not affect the validity of anything done under that order.

(12) The Revenue Commissioners may make regulations as they deem necessary in relation to the operation of the section.

Relevant Date: Finance Act 2015