Revenue E-Brief Issue 88/2015, 11 September 2015
Section 738 TCA 1997 sets out the tax regime for domestic undertakings for collective investment. Under this regime the undertaking is liable to tax at the standard rate on both its income and gains. The unitholder is not liable to tax on distributions out of the fund. This regime is generally referred to as the "old domestic" or "net" regime and applies to domestic collective funds established prior to 1 April 2000. (All new funds set up on or after 1 April 2000 are taxed under the new "gross- roll-up" regime).
The standard rate of tax (20%) applies to income arising and gains accruing on Net Funds up to and including 7 February 2012. The Finance Act 2012 introduced an increased rate of 30% for income arising and gains accruing on or after 8 February 2012.
The Tax and Duty Manual Part 27.01.02, which sets out Revenue practice in relation to Undertakings for Collective Investment, has been amended to reflect the increased tax rate, introduced in Finance Act 2012, for Net (i.e. pre gross roll-up) funds.
11 September 2015