Revenue has provided guidance on withholding tax for certain unit holders of Irish Real Estate Funds (IREFs). Finance Act 2016 introduced rules for a taxing method for fund structures where at least 25% of the value of the fund is made up of Irish real estate. IREF’s must deduct 20 percent withholding tax on certain property distributions from the fund.

A number of unit holders are specifically excluded from the application of withholding tax and where they make an appropriate declaration, IREF withholding tax need not be applied. Examples of excluded persons include PRSA Administrators, a pension scheme, charity, credit union and an investment undertaking. Where appropriate declarations are not made, IREF withholding tax will be applied and will only be refundable in limited circumstances.

To allow the new regime to get established, Revenue is giving these unit holders time to get the appropriate declarations in place. Therefore in respect of IREF taxable events that take place before 30 June 2017, IREF withholding tax will not be applied to these excluded people once the correct declaration is in place by 1 July 2017.

Revenue guidance on the matter along with the appropriate declaration forms for particular unit holders can be found in the Revenue Tax and Duty manual and Revenue eBrief No. 10/2017 contains more details.