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The Finance Act 2010 introduced a number of changes to the administration of gift and inheritance tax.
Historically, a tax return and payment of tax must have been submitted within 4 months of the valuation date of a gift or inheritance.
The valuation date being the date on which:
Market value of the property is ascertained,
Tax is due and payable,
Installments (where applicable) commence,
Tax becomes a charge on the property,
Test for farmer relief is applied.
Broadly speaking, the valuation date for a benefit is essentially the point in time at which the beneficiary becomes beneficially entitled in possession.
The 2010 Finance Act introduced a fixed pay and file date for gift/inheritance tax of 31st October, to align with the Income Tax pay and file deadline. All gifts and inheritances with a valuation date in the 12 month period ending on the previous 31st August will be included in the return (IT38) to be filed by 31st October.
Examples:
Valuation date 15 March 2011: File IT38 and pay tax by 31 October 2011
Valuation date 14 November 2011: File IT38 and pay tax by 31 October 2012
There is also an introduction of a surcharge for the late filing of a return.
5% (up to a maximum of 12,695) where the tax return is delivered within 2 months of the filing date.
10% (up to a maximum of 63,485) where the tax return is delivered after 2 months of the filing date.
Other changes include;
Abolition of the status of CAT as a charge on property that has been the subject of a gift or inheritance in the previous 12 years.
Abolition of secondary accountability i.e. where the beneficiary fails to pay the tax due and the person secondarily liable has control over the property passing.
Requirement to appoint an Irish-resident agent who will be responsible for pay and file procedures where beneficiaries are non-resident.
Current Gift/ Inheritance Tax thresholds:
Parent to Child 414,799
Blood Relative 41,481
Others 20,740
Rates:
Threshold Amount - Nil
Balance - 25%
Contact
Cliodhna Grant , OSK Tax with
your queries and comments or visit our tax section on
http://www.osk.ie/tax.html
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On the 20th June 2010 An Taoiseach announced the Employer Job (PRSI) Incentive Scheme. The scheme is targeted at those who have been unemployed for six months or more. If you have created a new job in 2010 and employed a person who had been unemployed for 6 months or more, then you are entitled to apply for an exemption. If your application is approved you will not have to pay employers PRSI for 12 months forward from the approval date. There are key criteria and conditions which must be fulfilled in order to qualify for the exemption. If you have any queries in respect of this scheme please do not hesitate to contact your Partner or Director in OSK.
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Disclaimer
Please
note that the above information is a general guide only and specific
advice should be sought before any action is taken.
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