58 Charge to tax of profits or gains from unknown or unlawful source

Summary

Profits or gains arising from illegal activities are chargeable to tax as miscellaneous income under Case IV of Schedule D. The section enables assessments to be raised in respect of any profits or gains the particular source of which cannot be identified.

Details

(1) Profits or gains are chargeable to tax notwithstanding that at the time the assessment in respect of those profits or gains was made —

• the source from which the profits or gains arose was not known to the inspector (this provision enables an inspector to assess income arising from a source, whether legal or illegal, which he/she cannot identify),
• the profits or gains were not known to the inspector to have arisen wholly or partly from a lawful source or activity, or
• the profits or gains arose and were known to the inspector to have arisen from an unlawful source or activity.

The chargeability of such profits or gains is not to be affected by the question whether they arose in whole or in part from an unknown or unlawful source or activity. This aspect can, therefore, be simply disregarded in determining the chargeability to tax of such profits or gains. The legality or otherwise of the source cannot affect the validity of the assessment.

(2) Notwithstanding anything in the Tax Acts, any profits or gains charged to tax by virtue of subsection (1) or any profits or gains charged to tax following an investigation by the Criminal Assets Bureau are chargeable under Case IV of Schedule D and are to be described as “miscellaneous income” in the assessment. Any such assessment may be made solely in the name of the Criminal Assets Bureau. In addition, any such assessment cannot be discharged either by the Appeal Commissioners or a court by reason only of the fact that the income should, apart from this section, have been described in some other manner or by reason only of the fact that the profits or gains arose wholly or partly from an unknown or unlawful source or activity.

Payment of any tax charged in any such assessment may be demanded solely in the name of the Criminal Assets Bureau. On payment to the Criminal Assets Bureau of any such tax, the bureau is required to issue a receipt, lodge the payment in the bank account of the Revenue Commissioners and transmit details of the assessment and payment to the Collector-General.

Relevant Date: Finance Act 2019