The deadline date for electronic filing of Local Property Tax returns is 28 May 2013.
In this video, Chartered Accountants Ireland Director of Taxation Brian Keegan explains how this is a self-assessment tax, where the obligation is on the individual to ensure information held by Revenue is correct. He also looks at the tax from the perspective of self-employed people and PAYE workers and talks about ways to file.
The Finance Act 2013 has introduced a facility whereby individuals can withdraw a portion of their AVC assets prior to retirement age. The key features are:
· It is possible to withdraw up to 30% of the accumulated value of Additional Voluntary Contribution (AVC) payments from a pension arrangement. This includes occupational pension plans, AVC plans, PRSA AVC plans and Personal Retirement Bonds with an AVC element.
· If an individual has more than one pension arrangement, the limit applies to 30% of the value of AVCs from each arrangement.
· Withdrawal is not an option on the value of employer contributions or employee regular contributions.
· Only one withdrawal is allowed.
· The withdrawal can take place at any time between 27th March 2013 and 26th March 2016.
· The withdrawal is liable to income tax but not subject to PRSI or USC deduction. The income tax liability is based on the individuals overall income in the year of withdrawal.
The Registered Administrator (RA) for the pension plan will have procedures for AVC drawdown. The RA will require the completion of a form. The RA is obliged to deduct income tax at source. Most RAs are likely to automatically deduct at the 41% income tax rate with the provision of the individual to either prove a lower tax rate liability prior to payment or the individual can claim back any excess deduction of tax from the Revenue Commissioners. Each RA will have procedures for the sale of investment units and the timelines for the settlement of payment. The RA might only make payment by electronic fund transfer.
If a Pension Adjustment Order (PAO) is in place, each party can access the value of AVCs based on the terms of the PAO.
Interested in finding out more…
Depending on an individual’s personal financial circumstances, the option to withdraw up to 30% of the value of AVCs could be good or poor financial advice. This is a technical note and should not be regarded as financial advice.
Feel free to contact us for more information or if you have any specific questions to relation to AVC drawdowns
Thanks to our friends in Acumen & Trust for this technical update.
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The Revenue Commissioners have released the following statement re Capital Acquisitions Tax and debt write off. Basically no CAT liability arises.
Section 5 of the Capital Acquisitions Tax Consolidation Act 2003 provides that a person is deemed to take a gift where, under or in consequence of any disposition, that person becomes beneficially entitled in possession, otherwise than on a death, to any benefit otherwise than for full consideration in money or money’s worth paid by such person.
By virtue of the definition of “disposition” in section 2 (1) CATCA 2003 the release, forfeiture, surrender or abandonment of any debt or benefit, or the failure to exercise a right may be subject to CAT in certain situations.
Where for bona fide commercial reasons, a financial institution enters into a debt restructuring, forgiveness or write-off arrangement with a customer, Revenue’s approach, subject to being satisfied as to the bona fides of the arrangement (which may be subject to Revenue audit or enquiry) is that the financial institution is not intent on making a gift of any sort to the mortgagor/debtor – and accordingly the mortgagor/debtor would not be subject to a CAT charge in respect of any such debt restructuring, forgiveness or write-off arrangement.
This approach will only apply in the above-mentioned circumstances. In particular, should any debt restructuring, forgiveness or write-off arrangement be undertaken for the purposes of the avoidance of tax, the treatment outlined above would not apply.