Revenue published Tax Briefing No. 71 on 14 April. A key article relates to RCT and clarification on connected party rules (Section 531(1)(c) TCA, 1997) and construction operations carried out in a private capacity by a sole trader or partnership.

In summary, section 35 of the Finance Act 2008 introduced a new subsection into section 531 TCA (subsection (2A)) that was designed to exclude some connected persons from the RCT provisions in respect of construction operations carried out in their own premises.

In the case of a sole trader or partnership in respect of such work carried out in a private capacity on their own home (including outhouses and pleasure gardens) or private lettings, or in respect of other incidental private work (e.g. erection of a memorial monument), Revenue have stated that the obligation to operate RCT will not apply to minor repairs or improvements where the total value of contracts in respect of such work does not exceed €20,000 (incl. VAT) per property in a tax year.

The new approach outlined above will also apply in respect of minor repairs or improvements carried out in a private capacity on their own home (including outhouses and pleasure gardens), or private lettings, or other incidental private work (e.g. erection of a memorial monument) by a director/shareholder with a controlling interest in a construction company.

Care must be taken to ensure that the conditions of the above clarification are met as any error in the application of RCT can be very costly. The clarification article is available at http://www.revenue.ie/en/practitioner/tax-briefing/71/relevant-contracts-tax.html.

Other topics covered in the Briefing include:

• Claims for Research and Development (R&D) tax credit in respect of expenditure incurred in periods ending on or before 31 December 2007 where protective claims were submitted on or before 31 December 2008.
• Relevant Contracts Tax (RCT) – Clarification on Connected Party Rules (Section 531(1)(c) TCA, 1997), and Construction operations carried out in a private capacity by a sole trader or partnership.
• Stamp Duty Audit: Owner/Occupier Relief – clarification on the position with regard to the issue of tax, interest and penalties in the context of a Stamp Duty audit and the clawback or otherwise of the owner/occupier property reliefs.
• Rent Pooling – sets out Revenue's position on the pooling of rent from multiple properties.
• Third Party Returns: Settlements Involving Non-Resident Trustees.
• Revenue Investigation into Trusts and Offshore Structures-Qualifying Disclosure.
• Employees’ Motoring & Subsistence Expenses – changes effective from 5 March.
• Changes to the VAT Information Exchange System (VIES).
• Review of practices relating to the Approved Profit Sharing Scheme (APSS).

Tax Briefing No. 71 is available at http://www.revenue.ie/en/practitioner/tax-briefing/71/.