Staying up to date on tax developments is becoming increasingly more challenging due to the breath of new tax legislation. It is however important for you and your clients to be familiar with changes in legislation, decisions in tax cases and updates to Revenue Guidance which could impact your clients.

We have outlined for you below a few recent developments and other items to be mindful of as the busy season approaches:

Revenue eBrief No. 207/24 - in respect to clawback period for Business Relief and Agricultural Relief

The CAT manual has been updated by Revenue to reflect the changes in rules in respect of the time period in relation to clawbacks of both Business Relief and Agricultural Relief which took effect from 01 January 2024. Previously for example in an inheritance situation, the clawback period of 6 years in respect of both reliefs commenced on the date of death of the disponer. However, this position has changed and the clawback period commences from the valuation date. Often the valuation date for an inheritance is not the date of death but a later date depending on the particulars of the estate. As such, the holding period to avoid a clawback of the reliefs will commence from the valuation date now (which could be a later date than the date of death) – which is a less favourable position now for your clients than before as the clawback period requires more management.

Tax Appeals Case: 63TACD2024 – showing importance of valuation

In circumstances where a share transfer or business transfer is being undertaken by your clients, it is always advisable to have a robust valuation prepared for the transaction. This tax appeals case highlighted the difficulty in arguing that a valuation used in a transaction is accurate in circumstances where there was no actual valuation performed at the time of the transaction.

The key learnings from this case are to advise clients to always seek a robust valuation when undertaking transactions which require one, and to ensure that this is prepared at the time of the transaction and is reasonable based on recognised valuation methods. The case highlights that where a client is required to retrospectively prepare a value to support a transaction – this is a weaker position and can create challenges when defending a Revenue audit or other enquiry.

Key elections to note as filing season approaches

• R&D: It is important to ensure that where you have clients who are looking to make R&D claims that the claim is made within 12 months after the end of the accounting period in which it incurred the expenditure. A recent TAC case further stressed this point (16TACD2024).
• Pension Relief: In order to claim income tax relief for a qualifying contribution in the tax year prior to that in which the payment is made, the payment must be made on or before the return filing date for that earlier tax year. A recent TAC case further stressed this point (61TACD2024).
• Close Company Surcharge – section 434(3A) elections: In order to ensure that a dividend from a subsidiary to a parent is excluded for close company surcharge purposes it is important that this election is made on the Corporation Tax return of both companies.

The complexities of the tax landscape continue to evolve, making it increasingly challenging to stay informed. We understand the importance of staying ahead of these changes to protect your client’s interests. Our Tax & Legal team is dedicated to keeping ahead of these developments and providing expert guidance. If you have any questions or require assistance with navigating these complex issues, please don’t hesitate to contact us. We are here to support you.

The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.