Revenue Note for Guidance

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Revenue Note for Guidance

784E Returns, and payment of tax, by qualifying fund managers

Summary

[Note: Section 784E was deleted by the Finance Act, 2000 as respects an approved retirement fund or an approved minimum retirement fund, as the case may be, where the assets in the fund were first accepted into the fund by the qualifying fund manager (QFM) on or after 6 April 2000.]

This section deals with the return by a QFM of payments out of the residue of an approved retirement fund (ARF) and, where appropriate, the payment of the tax deductible from that payment. Tax will be due only where a distribution is made following the death of the individual beneficially entitled to the assets in the ARF. In the case of distributions out of the residue of an ARF while the individual beneficially entitled to the ARF is alive, the individual will have to include the distribution in his or her tax return and pay the tax on it.

The return and any payment is to be made to the Collector-General within 14 days of the end of the month in which the payment is made. Payment is to be made without the need for raising an assessment although the inspector has the power to make an assessment if he/she considers it necessary to do so because he/she is dissatisfied with particulars contained in a particular return. The normal provisions relating to the assessment and collection of income tax and the charging of interest apply, with suitable modifications, to the tax payable by QFMs.

Details

Returns

(1) A QFM is to make a return to the Collector-General within 14 days of the end of the month in which a distribution is made out of the residue of an ARF. The return is to contain the following information —

  • the name and address of the individual in whose name the ARF is or was held;
  • the individual’s tax reference number;
  • the name and address of the person to whom the distribution was made;
  • the amount of the distribution;
  • the amount of the tax for which the QFM is required to account.

Payment

(2) A QFM is required to account for any tax due by him or her in respect of a distribution at the same time as a return in respect of the payment is due under subsection (1), i.e. within 14 days after the end of the month in which the payment is made. The tax is payable without the making of an assessment but an assessment may be made if all or part of the tax is not paid on time, whether or not it has been paid when the assessment is raised.

Assessments

(3) An inspector may make an assessment in respect of tax which should have been but was not included in a return or where the inspector is dissatisfied with any return. The tax assessed will, for the purposes of interest on unpaid tax, be due on the date it would have been due if included in a correct return under subsection (1).

(4) In order to secure that the correct tax, including interest, is paid, the inspector may make any necessary assessments, adjustments or set-offs where an amount was incorrectly included in a return.

(5) Tax assessed on a QFM is due within one month of the date of the assessment unless the tax would be due earlier under subsection (1). On determination of an appeal against an assessment, any tax overpaid will be repaid.

Collection, etc

(6)(a) The provisions of the Income Tax Acts relating to assessments, appeals, collection and recovery of income tax apply to tax payable by QFMs.

(6)(b) & (c) Interest is payable at the rate of 0.0322 per cent for each day or part of a day on the late payment of tax payable under this Chapter without the making of an assessment. The payment and procedural provisions of subsections (2) to (4) of section 1080 – which apply to interest on assessed taxes – apply to that interest.

(6)(d) Where an assessment is raised on a QFM so that the normal interest charge would arise under section 1080, that section is to apply with the omission of subsection (1)(b) which deals with the date as from which interest is payable in a case where there is an appeal against an assessment to income tax. This provision is not required in the case of an assessment on a QFM because the due date for payment of interest in such a case is set out in subsection (5) which applies whether or not there is an appeal against such assessments.

Prescribed form for returns

(7) A return by a QFM is to be on a form which is prescribed or authorised by the Revenue Commissioners and must include a declaration that it is correct and complete.

Returns in relation to ARFs and AMRFs

(8) A QFM must, on or before the specified return date for the chargeable period, i.e. the date by which the QFM is required to make his or her tax return, make a return in relation to each ARF and AMRF which he or she managed at any time during the tax year. The return is to contain the following details —

  • the name, address and tax reference number of the individual beneficially entitled to the assets in the fund,
  • details of any income, profits and gains and any chargeable gains derived from assets held in the fund and of any tax deducted from such income, profits or gains,
  • details of any distributions made out of the assets held in the fund, and
  • such further details as the Revenue Commissioners may require for the purposes of this section.

Relevant Date: Finance Act 2019