1. Finance Bill 2014 capital taxes provisions
26 November 2014
Presented by Ann Williams

2. Finance Bill 2014 Capital gains tax Stamp duty
Capital acquisitions tax
Pensions
Miscellaneous – GAAR & records
Ann Williams

3. Finance Bill 2014 - Trust for permanently incapacitated
Exemption under s189A TCA 1997 for public funded trusts for permanently incapacitated individual
On death of individual – remaining assets had to pass to charity
From 1 Jan 2015, if individual is survived by a spouse, civil partner or child, the remaining assets can pass to estate (not necessarily to the spouse, civil partner or child)
Ann Williams

4. Finance Bill 2014 – Capital gains tax – temporary non-resident
S29A TCA 1997 anti-avoidance provision applying to interests in shares
Where sold in a period of non-residence
CGT in year of return based on market value of assets at date of departure regardless of sale price
For disposal on or after passing of FA 2014, the market value at date of disposal will be used for CGT in year of return, where it differs from market value at date of departure
No distinction where individual is resident at disposal
Differs from EU exit tax cases
Ann Williams

5. Finance Bill 2014 – Capital gains tax – wasting assets exemption
UK case “HMRC v the Executors of Lord Howard of Henderskelfe decd” (2014) where CGT exemption for wasting asset was claimed on a painting sold for £9.4m
For disposals on or after passing of FA 2014, plant in s560 TCA 1997 now redefined to exclude work of art
Work of art includes a picture, print, book, manuscript, sculpture, jewellery, furniture or similar object
Ann Williams

6. Finance Bill 2014 – CGT Vodafone
Return of value payment of €1,000 or less by Vodafone plc in early 2014
Treated as capital receipt unless shareholder opts to have payment treated as income
Will limit the number of small income tax underpayments
Ann Williams

7. Finance Bill 2014 – CGT farmers
Farm restructuring relief deadline extended from 31 Dec 2015 to 2016
CGT retirement relief currently applies on disposal of land let for up to 15 years provided other conditions are met
From 1 Jan 2015, this will be extended to 25 years
CGT exemption for disposal by farmers of leased Single Farm Payment entitlements during Scheme year 2014
Ann Williams

8. Finance Bill 2014 – Stamp duty farmers
Exemption from SD for certain leases of farmland
Lease period between 6 and 35 years
Farmland used exclusively for farming by lessee on commercial basis and with view to profit
Lessee is a farmer who holds an appropriate qualification (or does so within 4 years), or spends at least 50% of normal working time farming
Doesn’t apply to corporate lessees
SD exemption clawed-back within 6 years if conditions ceased to be satisfied (except on death/incapacity of lessee)
Ann Williams

9. Finance Bill 2014 – Stamp duty farmers
Extension of consanguinity relief on certain transfers of non-residential land
Between 1 Jan 2015 and 31 Dec 2015 or
Between 1 Jan 2016 and 31 Dec 2017 by a transferor who is 66 or younger
To an individual who farms the land for 6 years and has the appropriate qualification (or obtains it within 4 years) or spends 50% of his/her normal working time farming, or
To an individual who leases the land for 6 years to a qualified farmer
The land must be farmed on a commercial basis and with a view to making a profit
Appropriate relationship and certificate required
Ann Williams

10. Finance Bill 2014 – CAT BPR
BPR on transfers of land, building, machinery or plant owned by an individual and used by company controlled by him/her at the same time as shares in qualifying company
Meaning of control amended so that shares of spouse/civil partner added together for the purpose of the test
Applies to gifts/inheritances on or after 23 Oct 2014
Ann Williams

11. Finance Bill 2014 – CAT DTT
Exemption from DTT for discretionary trust created exclusively for public or charitable purposes in Ireland
From date of passing of FA 2014 restriction to Ireland eliminated
This is in line with the general CAT exemption for charities and EU compliant
Anti- abuse provision added to ensure that the exemption cannot be used where the main purpose is “to secure a tax advantage” as defined in s811 TCA 1997
Ann Williams

12. Finance Bill 2014 – CAT exemption for support, maintenance & education
Section 82(2) CATCA 2003 exemption restricted from date of passing of FA 2014
Up to this support etc payments could be made tax free during lifetime to all children regardless of child’s age
Payments had to be part of the normal expenditure of a person and be reasonable in his/her financial circumstances
Widely interpreted to allow long-term support
Ann Williams

13. Finance Bill 2014 – CAT exemption for support, maintenance & education
Restricted to payments for support, maintenance or education to child of the donor or his/her civil partner who is
Minor child or
Child between 18 & 25 in full time education/training or
Permanently incapacitated child regardless of age or
Person to whom the donor stands in loco parentis regardless of age
Also amended the provision for orphans to extend it from minor children only to year olds in full time education/training or permanently incapacitated regardless of age
Revenue to publish detailed statement
Ann Williams

14. Finance Bill 2014 – CAT agricultural property relief
For gifts & inheritance on or after 1 Jan 2015, in addition to the 80% agricultural assets test a farmer has to
Hold a farming qualification, or obtain one within 4 years of the date of the gift/inheritance and farm the land on a commercial basis and with a view to profit for 6 years from the valuation date or
For 6 years from the valuation date spend not less than 50% of his/her normal working time farming the land on a commercial basis and with a view to profit or
Lease the gifted/inherited agricultural property to a qualifying individual farmer for at least 6 years from the valuation date (lease to a company not permitted)
Ann Williams

15. Finance Bill 2014 – CAT agricultural property relief
Additional claw-back provision where beneficiary or lessee ceases to qualify as a farmer
Within 6 years of the valuation date
APR with-drawn and CAT recalculated
No claw-back of relief if beneficiary or lessee dies within 6 years of the valuation date
Ann Williams

16. Finance Bill 2014 - Pensions
From 1 Jan 2015 changes to deemed draw- down in ARFs
Fund less than €2m rate of 4%, or 5% for over 70’s
Fund over €2m rate of 6% regardless of age
AMRF change will allow a holder draw down 4% pa of the value of AMRF assets at 1 February
AMRF draw down will be taxed as normal
Ann Williams

17. Finance Bill 2014 – Pensions ARF anti-avoidance
Distribution from ARF = withholding tax by QFM
Assignment of the ARF not a distribution ? = no withholding tax by QFM
FB amends s784A to
Confirm an assignment is a distribution
Made by QFM and liable to withholding tax
New category of distribution where
Acquisition by ARF of units, and
Another pension arrangement of a person connected to the ARF owner acquires units and
Increase in pension units attributable to ARF owners units
Ann Williams

18. Finance Bill 2014 – s811 general anti-avoidance rule
Reclassification of transactions determined to be tax avoidance transactions
Notice issued by an authorised Revenue officer
Notices & procedures challenged
FB provisions -
Incentive to settle on transactions commenced on or before 23 Oct 2014 by making a qualifying avoidance disclosure by 30 June 2015
Ann Williams

19. Finance Bill 2014 – s811 GAAR
For transactions commencing after 23 Oct 2014
New approach with no Revenue officer required to “form an opinion” and issue a notice
Original definitions of “tax advantage”, “tax avoidance”, “bona fide commercial purposes” unchanged
A Revenue officer may at any time deny or withdraw the tax advantage, make enquiries, raise or amend an assessment
Changes to protective notice requirements – all documentation and taxpayer’s reasons why not within GAAR
Ann Williams

20. Finance Bill 2014 – GAAR
New Schedule 33 with a list of specific anti-avoidance sections with increased surcharge exposure
Includes s590, s806, s807A, s817 etc
Consequences of being within GAAR are greater
Mandatory disclosure changes include
Incorporating the Regulations into TCA
Widening the scope of transactions to be disclosed to include “any part of a transaction ..”
Additional obligations for all parties
Ann Williams

21. Finance Bill Records
Obligation to retain records & linking documents for income & capital gains for 6 years
Extension of period of retention where an enquiry, investigation, appeal, judicial process or claim is ongoing until completed
Executor or administrator of a deceased person is required to keep documents & records of the deceased for the appropriate period
Ann Williams

22. Finance Bill 2014
Ann Williams

23. Contact details
Phone: or
Web:
Ann Williams