NPPR Charge

This was a tax that was charged on properties that were not considered the family home. The charge has since been replaced by the Local Property Tax. Revenue recently lost a case in the High Court where it was decided that the NPPR charge was tax deductible. This was due to the charge being considered a rate as opposed to a tax. Previously Revenue had argued that the cost was not deductible against tax.

Revenue are appealing this decision to the relevant courts.

Landlords should now consider whether they want to amend their tax returns for the last number of years to allow them claim a deduction for these charges. Revenue will not issue refunds until the their appeal is heard, however landlords still need to make a submission to ensure that the refunds will be processed if the Revenue appeal is lost.

Revenue crackdown on Landlords

Revenue are in the middle of a campaign of actively auditing landlords to determine if they are declaring all of their rental income and are claiming only tax deductible expenses.

We strongly recommend that landlords contact your tax advisor/accountant to tidy up your affairs to ensure you are being 100% compliant with Revenue.  

Paternity Benefit

New parents (other than the mother of the child) are now entitled to paternity leave for children born after 1 September 2016. New parents will be entitled to social welfare benefit of €230/€235 per week for two weeks. Please be aware that this social welfare benefit is taxable, although it is not subject to PRSI and USC. Also note the following in relation to the benefit:

• You must take the two weeks consecutively
• It applies to adopted children also
• Applies to both employed and self-employed individuals
• Your employer is not obliged to continue paying your salary for the two weeks

Entrepreneur Relief

This is another reminder that where business owners sell their businesses and companies, the first €1m of proceeds will be taxable at 10%. Certain conditions need to be satisfied in order to avail of the relief but nothing, at present, that is particularly onerous. The main points to be aware of is that the business must be a trading entity and that you must have held the assets or shares for at least 3 years and be working full time in the business. This relief gives business owners an excellent opportunity to exit or partially exit their business and only pay 10% tax on the proceeds.

Revenue warning on disclosure of foreign income

All self–assessed tax payers should have by now received correspondence from Revenue in respect of declaring offshore assets. Revenue are asking all tax payers to declare their interests in foreign assets if they have not already done so before 30 April 2017.

If you make a disclosure before 30 April 2017 you will still be able to avail of the favourable penalty regime for qualifying voluntary disclosures. As well as that, if your disclosure is correct, you will not be subject to publication in the Revenues list of defaulters.

If no disclosure is made before 30 April 2017 your rights to the favourable penalty regime for qualifying disclosures will be lost should Revenue uncover undeclared foreign assets. This means potential penalties of 100% on any undeclared income, be it arising from offshore or onshore assets.

With Revenue now receiving financial information from over 100 countries the likelihood of them finding out about undeclared foreign assets has increased substantially. It is imperative that taxpayers give this careful consideration over the next 6 weeks.

Please be aware that Revenue have clarified that no disclosure is necessary if you do not have a tax liability arising from the foreign account or asset.

As ever if you have any questions in relation to any of the topics raised, please pick up the phone or email me at dave.obrien@quintas.ie with your comments and thoughts.

All the best

Dave