Revenue Note for Guidance

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Revenue Note for Guidance

1003A Payment of tax by means of donation of heritage property to an Irish heritage trust or the Commissioners of Public Works in Ireland

Summary

Certain tax liabilities may be discharged by means of a donation of heritage property to the Irish Heritage Trust or the Commissioners of Public Works in Ireland provided certain conditions are met. “Heritage property” includes buildings, gardens and contents of buildings in so far as they are historically associated with the buildings.

The scheme takes the form of a non-refundable payment on account of tax of an amount equal to 50 per cent of the market value of the heritage property donated. On the introduction of the scheme relief was available on the full market value of the heritage property donated. Under section 94 of the Finance (No. 2) Act 2008 the relief was restricted to 80 per cent in relation to determinations made on or after 1 January 2009. The relief at 50 per cent applies to determinations made on or after 27 March 2013. There is a ceiling of €6 million on the aggregate value of heritage properties that may be approved in any one year.

Details

Definitions

(1) “the Acts” are the Tax Acts (that is, the Income Tax Acts and the Corporation Tax Acts, other than those provisions which provide for tax collected under the PAYE tax deduction system, relevant contracts tax and advance corporation tax), the Capital Gains Tax Acts, and the Capital Acquisitions Tax Consolidation Act 2003 (including enactments amending or extending that Act). In addition, any instrument (for example, a regulation or order) made under any of these Acts is included in the definition.

“arrears of tax” is tax (including interest and penalties) which at the time the gift is made is unpaid —

  • in the case of income tax, corporation tax and capital gains tax, for the relevant period, and
  • in the case of gift tax and inheritance tax, before the start of the calendar year in which the relevant gift is made.

“contents of the building” means house contents where these are historically associated with the building and are contents which the Minister for Arts, Heritage and the Gaeltacht or, as appropriate the Commissioners of Public Works in Ireland, are satisfied are important to establishing the historic or aesthetic context of the building.

“current liability” for income tax and capital gains tax refers to tax due in the year of assessment in which the gift is made. For corporation tax it refers to tax liability arising in the accounting period in which the gift is made. In the case of gift tax or inheritance tax it means tax owed for the calendar year in which the gift was made.

“heritage property” is defined in subsection (2)(a).

“market value” is defined in subsection (3).

“Minister” means the Minister for Arts, Heritage and the Gaeltacht.

“relevant gift” is a gift of heritage property to the Trust or, as appropriate to the Commissioners of Public Works in Ireland provided no consideration (other than the tax credit given by the section) is received by the person making the gift.

“relevant period” fixes the various periods which will apply for the purposes of determining arrears of tax. For income tax and capital gains tax, it is any year of assessment before the year in which the relevant gift is made. In the case of corporation tax, it is any accounting period before the accounting period in which the relevant gift is made.

“tax” is income tax, corporation tax, capital gains tax, gift tax or inheritance tax.

“Trust” is the company designated by the Minister for Finance for the purposes of this section in the order referred to in section 122(2) of the Finance Act 2006.

“valuation date” is the date on which an application is made to the Minister for Arts, Heritage and the Gaeltacht for a determination under subsection (2)(a).

Heritage property

(2)(a) “Heritage property” is a building or a garden which, following a written application by its owner, is determined by the Minister or, as appropriate the Commissioners of Public Works in Ireland to be a building or a garden which is an outstanding example of its type, pre-eminent in its class, which is intrinsically of significant scientific, historical, horticultural, national, architectural or aesthetic interest and is suitable for acquisition by the Trust.

(2)(aa) For the purposes of the section, “building” includes any associated outbuilding, yard and also land which is occupied or enjoyed with the building as part of its garden or designed landscape and which contributes to the appreciation of the building in its setting. It also includes the contents of the building and any land necessary for the provision of access to the building or for the provision of parking facilities for visitors to the building.

For the purposes of the section, “garden” includes any associated building, outbuilding or yard and also land which is occupied or enjoyed with the garden and which contributes to the appreciation of the garden in its setting. It also includes any land necessary for the provision of access to the garden or for the provision of parking facilities for visitors to the garden.

(2)(ab) This section also provides that, where a heritage property is donated and the Trust or Commissioners of Public Works deem that lands outside of the ownership of the donor of the property are necessary for the provision of access to the property or for the provision of parking facilities, such lands may be donated for such purpose under the terms of the section and those lands shall be deemed to be a heritage property.

(2)(b) This section requires that an application for a determination from a potential donor must be directed to either the Minister for Arts, Heritage and the Gaeltacht or the Commissioners of Public Works in Ireland, depending on whether the intended gift will be made to the Irish Heritage Trust or the Commissioners of Public Works in Ireland.

(2)(c) The Minister or, as appropriate the Commissioners of Public Works in Ireland, in considering an application for a determination, is required to consider any supporting evidence provided to the Minister or, as appropriate the Commissioners of Public Works in Ireland by the applicant.

(2)(d) On receipt of an application for a determination, the Minister or, as appropriate the Commissioners of Public Works in Ireland must make a written request to the Revenue Commissioners for a valuation.

(2)(e) There is a ceiling on the aggregate value of the heritage properties in respect of which determinations are made by the Minister or, as appropriate the Commissioners of Public Works in Ireland and not revoked in any one year of €6 million. Where a determination is made and subsequently revoked, the value of the property concerned will not be aggregated with the value of the other heritage properties in respect of which a determination has been made in that year for the purpose of calculating the €6 million cap.

(2)(f) The Commissioners of Public Works in Ireland shall not make a determination without the consent in writing of the Minister for Public Expenditure and Reform and the Minister may specify conditions, which will apply to such a determination.

(2)(g) This paragraph requires appropriate consultation between the Minister for Arts, Heritage and the Gaeltacht and the Commissioners of Public Works in Ireland in the operation of this scheme.

(2)(h) A property ceases to be a heritage property where —

  • the property is sold or otherwise disposed of to a person other than the Trust or, as appropriate, the Commissioners of Public Works in Ireland,
  • the owner notifies the Trust or as appropriate the Commissioners of Public Works in Ireland in writing that it is not intended to make a gift of the property to the Trust or, as appropriate, those Commissioners, or
  • the gift of the property is not made to the Trust or, as appropriate, the Commissioners of Public Works in Ireland within the calendar year following the year in which the determination is made to the effect that it is a heritage property.

Where the Minister becomes aware or, as appropriate, the Commissioners of Public Works in Ireland become aware, within the calendar year in which the determination is made of the occurrence of either of the first two above events, the Minister or as appropriate the Commissioners of Public Works in Ireland may formally revoke the determination.

Valuation rules

(3)(a) The market value of any property is the lesser of —

  1. the price which, in the opinion of the Revenue Commissioners, the property would realise if sold on the open market on the valuation date (that is, the date of application to the Minister for a determination), and

    1. the price which, in the opinion of the prospective donor, the property would fetch if sold on that date, or
    2. at the election of that person, the amount paid for the property by that person.

(3)(b) The Revenue Commissioners may ascertain the market value in such manner and by such means as they think fit and for this purpose they may engage a person to inspect and value the property for them.

(3)(c) Any cost incurred in the valuation process is to be defrayed by the Revenue Commissioners.

Certificate of receipt of gift

(4) Once a relevant gift is made to the Trust or as appropriate to the Commissioners of Public Works in Ireland a certificate must issue to the person who made the gift certifying the receipt of the relevant gift and the transfer of ownership of the property to the Trust, or as appropriate the Commissioners of Public Works in Ireland. A duplicate of the certificate must be transmitted by the Trust or as appropriate the Commissioners of Public Works in Ireland to the Revenue Commissioners.

Tax credit

(5) Where a person makes a relevant gift, the person is, on submission to the Revenue Commissioners of the certificate given by the Trust or as appropriate the Commissioners of Public Works in Ireland under subsection (4), treated as having made on the date of the submission a payment on account of tax of an amount equal to 50 per cent of the market value of the relevant gift on the valuation date. This restriction in the amount of tax credit available applies to determinations made on or after 27 March 2013. From 1 January 2009 to 26 March 2013 the restriction in the amount of the tax credit available was 80 per cent of the market value of the relevant gift on the valuation date. Prior to this date the credit available was 100%.

(6) The payment on account of tax is to be set, so far as it is possible, against any liability to tax of the person who is treated as having made the payment in the following order:

  • firstly, against arrears of tax (including interest and penalties) and for an earlier period in priority to a later period, and
  • then, against any current liability to tax which the person nominates.

For the purpose of determining whether a period is an earlier or later period, the date on which an arrear of tax became due decides whether it is for an earlier or later period.

(7) Any balance remaining is to be set off against such future liability of the person who is treated as having made the payment as that person nominates.

(8) A person who has the power to sell a heritage property in order to pay capital acquisitions tax may make a relevant gift of that property in or towards satisfaction of that tax.

Prohibition on refunds

(9) There is no entitlement to a refund of tax in respect of a payment on account of tax made under this section.

Prohibition on interest

(10) Interest is not payable should it be due, whether directly or indirectly, because of any set-off which arises in respect of a payment on account of tax made under this section.

Bar on double relief

(11) A person discharging tax by virtue of this section is not entitled to any other relief in respect of a relevant gift.

Fota House

(11A)(a) In the event that Fota House in Co. Cork is acquired by the Irish Heritage Trust and the particular collection described in paragraph (b) is gifted to the Trust, relief under this section will – subject to paragraphs (c) and (d) – be granted as if Fota House was acquired by way of a relevant gift and the collection was part of the House’s contents.

(11A)(b) This collection is one of (either or both) Irish paintings and furniture which had been on show in Fota House between 1983 and 1990 and is to be housed there again by the Irish Heritage Trust. The Minister for Arts, Heritage and the Gaeltacht must be satisfied that the collection is important in establishing the aesthetic context of Fota House.

(11A)(c) This subsection will not apply unless the collection is gifted to the Irish Heritage Trust in 2008.

(11A)(d) Relief under this section will be granted to the donor of the collection to the Trust even though that person is not the donor of Fota House.

Publication

(12) The Revenue Commissioners are to include the details of all donations of heritage properties made in a calendar year under this section in their annual report for that year to the Minister for Finance.

Relevant Date: Finance Act 2019