Trusts & Offshore Structures
Revenue Investigation & Qualifying Disclosure
- Introduction - Revenue Investigation
- Investigation into trusts and offshore structures - Deadline
- Qualifying Disclosure
- Benefits of making a Qualifying Disclosure
- Consequences for failure to Disclose & Pay a tax liability
- Calculating the Tax Liabilities
- Frequently Asked Questions
- Further Information
Third Party Reporting
- Revenue Guidance Note (PDF, 45KB)
- Form 8-S - Return of Third Party Information in relation to Settlements involving Non-Resident Trustees (PDF, 48KB)
- Form 8-S - Return of Third Party Information in relation to Settlements involving Non-Resident Trustees (MS Excel, 27KB)
- Third Party Return Declaration Form 8-S - Declaration to accompany the electronic delivery of Form 8-S (PDF, 225KB)
- Frequently Asked Questions
- Further Information
Introduction – Revenue Investigation
The Revenue Commissioners announced on 27 March 2009 that an investigation of the tax treatment of property, assets and funds settled by persons on trusts and offshore structures will commence on 1 September 2009. The announcement is made in the light of:
- the Revenue experience from earlier project investigations that the use of trusts and similar structures represents a tax risk and
- the new reporting obligations on Third Parties, such as, accountants, tax practitioners, solicitors, financial institutions and financial intermediaries, in relation to settlements involving non-resident trustees - Revenue Guidance Note (PDF, 41KB).
The Revenue investigation is focused on persons who have undeclared tax liabilities in respect of transfers and settlements of property, assets and funds to / on trusts and offshore structures, such as, foundations, establishments, trust enterprises and offshore companies or have tax issues in relation to profits or gains arising within, or disbursements out of, such trusts or structures. Explanatory Note (PDF, 50KB)
The term "settlement" includes any disposition, trust, covenant, agreement or arrangement, and any transfer of money or other property or of any right to money or other property.
Persons who have tax issues relating to funds etc transferred to or settled on trusts (whether Irish or foreign) or similar structures may avail of the benefits of Qualifying Disclosure where they satisfy the disclosure rules and:
- a Notice of Intention (PDF, 241KB) is delivered on or before 1 September 2009, and
- disclosure and payment of liabilities Form SPT1 - Disclosure and Statement of Amounts Due (PDF, 30KB) is made on or before 31 October 2009.
The Third Party information returns will be delivered to Revenue in the months to 1 September 2009. In advance of commencing the investigation on 1 September 2009, the Revenue Commissioners are encouraging taxpayers who do have tax issues relating to transfers or settlements of property, assets or funds to / on trusts or offshore structures to come forward and deliver a Notice of Intention on or before 1 September 2009.
Benefits of making a Qualifying Disclosure
The benefits are:
- penalties will be mitigated in accordance with the Code of Practice for Revenue Audit
- the disclosure will be regarded for the purposes of section 1086 of the Taxes Consolidation Act 1997, as a qualifying disclosure – this means that the identity of the person and details of the payment will not be published and
- Revenue will not take steps to initiate the prosecution of any offence that may have been committed by the taxpayer, in relation to the disclosure.
Taxpayers who are already under enquiry or who come within certain excluded categories are precluded from making a qualifying disclosure. The excluded categories are holders of Bogus Non-Resident (BNR), Offshore or DIRT-liable accounts; holders of Single Premium Policies; Ansbacher and CMI / NIB cases and persons who come or may come under investigation arising from the Moriarty or Flood / Mahon tribunals.
Consequences of Failure to Disclose and Pay a tax liability
Where investigations and follow-up enquiries identify taxpayers with undeclared liabilities associated with settlements or transfers of property, assets or funds on / to trusts or similar structures they will face additional penalties and where the settlement exceeds €12,700 for periods up to 2004 or €30,000 for later periods they will be published in Iris Oifiguil. They also may be subject to criminal investigation.
Calculating the Tax Liabilities
The following links can be used to calculate certain tax liabilities
In regard to any Capital Acquisitions Tax (CAT), the statutory interest and penalties position is as follows:
Statutory interest is due on CAT as per the table below. Interest on CAT is chargeable from the date the tax fell due until the date it is paid. Under CAT legislation Revenue may mitigate the interest to 100% of the tax unpaid or underpaid, depending on the circumstances of the case. For the purposes of this disclosure scheme the 100% cap can be applied. In relation to the periods prior to 1997/98 the CAT liabilities should be calculated in the normal way and the aggregate liabilities for the years preceding 1997/98 may, for the purpose of calculating statutory interest, be taken as due on 1 November 1997 and not in any other year.
For gifts and inheritances received before 1 October 2003 but not declared or not wholly declared to Revenue, if a CAT return was not filed there is a fixed penalty of €2,535. If an incorrect CAT return was filed there will be a "tax-geared" penalty, which can be mitigated on the same lines as penalties for other taxes. If the tax default arose in a period ending on or before 5 April 1991 - that is, up to the tax year 1990/91 - by law, the penalty for underpaid tax cannot be mitigated. In those periods, therefore, the penalty is 100% of the tax due. After that, the penalty can be mitigated for co-operation and for making a qualifying disclosure, depending on the type of tax default involved. If a person not currently under investigation by Revenue, or not coming within an excluded category, makes a qualifying disclosure and co-operates with Revenue, for periods ending after 5 April 1991 the penalty can be mitigated to 10% of the tax now due.
For gifts and inheritances received on or after 1 October 2003 statutory interest is due together with a penalty as provided in the Code of Practice for Revenue Auditors. The penalty will be 10% of the tax owing. This tax-geared penalty will cover both any potential surcharge arising and any penalty arising from the non-submission or the submission of an incorrect return.
|Period||Monthly Interest Rate
(per month or part thereof)
|Period||Daily Interest Rate
(per day or part thereof)
|From 06/04/1991 to 31/03/1998||1.25%||From 01/09/2002 to 31/03/2005||0.0322%|
|From 01/04/1998 to 31/08/2002||1%||From 01/04/2005 to 30/06/2009||0.0273%|
|From 01/07/2009 to date||0.0219%|
A Revenue HELPLINE is available at:
01- 6329489 & 01- 6329433, Monday to Friday, 8.30 a.m. to 4.30 p.m.
Enquiries may also be addressed to:
Office of the Revenue Commissioners
Investigations & Prosecutions Division
Special Projects Team
5th Floor, Lansdowne House
Fax number: 01- 6329586
Where an adviser or taxpayer feels that a meeting would be helpful in dealing with the taxation issues in complex or uncertain cases then a mutually convenient date and time for a meeting with a member of Revenue's Special Projects Team can be arranged by contacting the Helpline at the above phone numbers.
Last Updated: June 2009