The ‘Inheritance Tax Trap’ That Hurts Us All

June 8, 2015

It is great to see the Irish Independent today highlighting the Inheritance Tax trap, where ordinary families are being hit by enormous tax charges on even modest inheritances.

The tax free threshold for parent-child gifts and inheritances has been cut by almost 60% since 2009.

Now, increasing property prices mean that more families than ever are being hit by Capital Acquisitions Tax (CAT).

The Inheritance Tax Trap

Worse still, CAT is now levied at 33%. This represents a breathtaking 65% hike on the 20% rate that applied up to November 2008.

This is bad news, and not just for those receiving inheritances and gifts:

  • The high rates and low thresholds actually stifle the tax take from CAT, as people who hold even modest levels of wealth are discouraged from gifting them to family members until after their deaths.
  • Such wealth-hoarding is particularly unproductive in the Irish economy which has suffered a major credit squeeze since 2008.

The situation is actually much worse for those who wish to leave assets to nieces, nephews or other relatives, where the tax-free thresholds are pitifully low.

Our high CAT regime is clearly delaying economic recovery, and must be reformed without delay.

For more, see Charlie Weston’s article and opinion piece, and the paper’s editorial in today’s Irish Independent.

CRO Returns – Time Runs Out for Bogus Auditors

March 23, 2011

Last January, an investigation by Irish Independent’s Emmet Oliver highlighed the problem of bogus auditors, where individuals were illegally signing audit reports and certifying company accounts – although these people were neither qualified, regulated nor insured to do so.

The Companies Registration Office (CRO) have now moved to close the loophole that allowed this problem to arise.

From 1 April next, a new format of the CRO Form B1 annual return will be introduced. This will require the auditor’s official Auditor Registration Number (ARN) to be quoted on all such returns when audited accounts are being filed with the annual return.

This new requirement will not affect the vast majority of Irish SME companies, who can avail of audit exemption. Where a company claims the exemption, they will not have to enter an ARN on their annual return.

However it will affect all companies which either forfeit their annual exemption, (e.g. by filing late returns), or for which an annual audit is manatory.

The official Public Register of Auditors is now online. This lists each audit firm’s ARN, together with contact details etc.

Why do Revenue still print Paper Tax Returns?

April 13, 2010

A Dublin print firm has accused the Revenue Commissioners of “economic treason” after the contract to print Tax Return forms was awarded to a Spanish company. This is according to a report in today’s Irish Independent.  The contract is said to be worth €225,000 to the tender winner.

Martin Mansergh, Minister of State at the Office of Public Works, defended the tender award yesterday on RTE’s Today with Pat Kenny radio show, by saying that he was not prepared to engage in “protectionism” to help the Irish print industry.  All contracts over €125,000 must be put to public tender across the EU, and it seems that Irish printers find it difficult to compete for these contracts with larger and more efficient outfits overseas.  The audio link to this discussion is here.

No more paper Tax Returns  - please....!

I cannot help thinking that both the print industry (which, admittedly has shed thousands of jobs in recent years) and the Minister  are missing the point.

There is no earthly reason why, in 2010,  the Revenue Commissioners need to spend hundreds of thousands of euro in printing and distributing blank tax returns.  The Revenue’s own ROS system, which allows taxpayers and their accounants to file returns online,  is a runaway success. As is its website, where all forms & leaflets are available 24/7 for immediate and easy download.  Yet Revenue continues to print tax returns as if the web didn’t exist.

In the past four or five years, every Income Tax return I have filed for my clients has been submitted online via ROS.  Yet each year, the Revenue persist in sending paper tax returns to me for all my self-assessment clients.  Each Spring, a series of large boxes are delivered to the office of my firm. These boxes contain Form 11 income tax returns for each of my clients, each with the client’s name, PPS number and Revenue codes printed on the front page.

These tax return forms, at the same time, are both extremely important (in that each contains clients’ sensitive personal data) and absolutely useless and redundant.  They are also very awkward to dispose of, as their booklet format is not exactly shredder-friendly and for obvious reasons they cannot just be thrown in the recycling bin.  At least my confidential document destruction supplier can earn a few bob by taking them off my hands – and from every accounting firm in the country.

In order to end this massive waste of resources, the Revenue should abandon its policy of printing massive volumes of tax returns.  By  limiting its print runs to cater for the small minority who actually want paper returns, it will save money and, oddly enough, generate some much-needed business for Irish printers.