739P Withholding tax arising on IREF taxable event

Summary

This section provides the manner by which the IREF withholding tax is to be operated on various IREF taxable events.

Details

(1) When an IREF taxable event occurs as mentioned in paragraphs (a) to (e) of the definition of IREF taxable event, subject to section 739QA, the IREF will deduct withholding tax out of the IREF taxable amount, the unit holder will allow such deduction on receipt of the net IREF taxable amount and the IREF is acquitted and discharged of the amount represented by the deduction as if that amount had been paid to the unit holder.

(2) Where bonus units are issued to the unit holder the IREF must reduce the amount of bonus units to be issued in order to secure that the value of the additional units does not exceed the amount the unit holder would have received after the deduction of tax, if the unit holder had been paid in cash rather than receiving additional units.

(3) Where an IREF taxable event includes a non-cash amount, the IREF must pay to the Collector General, an amount equal to the IREF withholding tax and is entitled to recover such amount from the unit holder as a simple contract debt.

(4)(a) The amount withheld will be treated as a payment on account of the income tax chargeable on the unit holder in that year of assessment. Where such payment on account equals the income tax payable under section 739O, the unit holder will not be required to file a return of income under self-assessment for that taxable event.

(4)(b) Where the withholding tax is on a non-cash amount (under ss(3)), a unit holder may not treat the IREF withholding tax as a payment on account until such time as the debt is repaid to the IREF.

(5) No repayment of IREF withholding tax will be made other than as provided for in section 739Q.

Relevant Date: Finance Act 2019