The CCAB-I Tax Committee response to the Department of Finance consultation on the tax implications of Receiverships was made last month. Chartered Accountants Ireland is a member of CCAB-I. The response highlights some of the practical tax issues associated with receiverships, and argues for the preservation of taxpayer entitlements. The response includes a suggestion for a time bound optional tax treatment to cater for some situations.

In summary, the response outlines:

• The practical difficulties for a receiver or lender to obtain all relevant tax information about the borrower's tax affairs is the key challenge, but information deficit should not be a used as a reason on its own for introducing significantly new legislation or concepts.
• The borrower's right to tax reliefs, credits, capital allowances etc. must always be preserved. It will be inequitable to deny the use of tax entitlements merely for the sake of simplifying administration.

We comment that:

• Any proposed new legislation in the context of receivers should have regard to the Personal Insolvency Legislation.
• We offer a suggestion for a time bound optional treatment, at the option of the receiver, to disregard the tax history in the interests of getting a property sold.
• By their very nature, receivership cases do not generally incur substantial taxable profits or gains.
• Finally the response observes that the cost to the Exchequer of any proposals implemented under this consultation will be negligible.

The CCAB-I response is published on the Chartered Accountants Ireland website and is reproduced on here.