Revenue Tax Briefing Issue 20, 1995
Under the provisions of Part VII (Sections 226, 227 and 230) of the Finance Act 1992, information returns required under certain specified provisions must be made on a self-assessment basis (generally referred to as “automatic reporting”). Prior to the Finance Act 1992, these returns were made only when required by notice issued by the Inspector.
Statement of Practice SP - IT/1/92 “Returns of Certain Information - Third Party Returns” sets out the specific provisions to which the automatic reporting applies and gives full details of the return making requirements.
Section 41 of the Finance Act 1995 provides for the extension to off-shore funds of the automatic reporting arrangements as introduced in the Finance Act 1992. It requires returns to be made for acquisitions by persons who are resident or ordinarily resident in the State (Irish residents) of material interests in certain off-shore funds.
For the purposes of Section 41, an off-shore fund is:
Sections 62 - 69 Finance Act 1990 deal with the taxation of such off-shore funds. Broadly, gains arising on the disposal of material interests in certain off-shore funds after 5 April 1990 are chargeable to income tax under Case IV of Schedule D.
An interest is a material interest if it capable of realising an amount equal in value to the proportion of the underlying assets of the off-shore fund as represented by that interest.
Persons who, in the ordinary course of their trade or business, provide a service whereby they act as an intermediary on behalf of Irish residents in, or in connection with, the acquisition of material interests in off-shore funds, are required to make returns of:
Irish resident persons who acquire material interests in off-shore funds must furnish the above information to the intermediary acting on their behalf.
Irish resident persons must include in their annual return of income:
Section 41 Finance Act 1995 applies to material interests in off-shore funds acquired after 1 June 1995. In the case of persons and bodies of persons (other than companies chargeable to corporation tax), returns of such material interests are required for the year of assessment 1995/96 and subsequent years. In the case of companies chargeable to corporation tax, returns of such material interests are required in respect of accounting periods ending on or after 1 June 1995. These dates apply whether the persons are making the return in their capacity as an intermediary or in their own right.