Revenue has announced a voluntary disclosure deadline, this time in respect of undisclosed income and undeclared liabilities relating to both Irish and foreign settlements.
This Revenue Investigation is concerned with the tax treatment of property, assets and funds transferred to or settled by persons on foreign and Irish trusts. Similar structures including foundations, establishments, trust enterprises and offshore companies are subjects of the investigation.
Revenue will also pursue any taxes arising from profits or gains accruing to trusts or offshore structures which should have been previously declared for Irish tax purposes.
Professional advisors and taxpayers should be aware that this investigation is linked to the obligation recently imposed on third parties to deliver returns in relation to settlements involving non-resident trustees.
The new legislation requires solicitors, accountants, financial advisers, banking institutions, etc to make a return to Revenue where they have reason to believe that the settlor was resident or ordinarily resident in the State and the trustees were not resident at the time of the settlement. This reporting requirement will help Revenue identify some of the existing settlements.
Where any taxpayer considers that there are undisclosed tax liabilities arising from any kind of arrangement involving a foreign or Irish trust, settlement, offshore company or enterprise, a qualifying disclosure should be filed as soon as possible. The benefits of making a qualifying disclosure are significant and include:
— Mitigation of tax penalties
— No publication by Revenue of tax defaulter’s name and settlement amount
— Revenue will not seek prosecution
Taxpayers have until September 1, 2009 to provide Revenue with a “notice of intention” to make a qualifying disclosure. A full disclosure outlining details of undisclosed monies, profits or gains together with the related tax, interest and penalties must be submitted to Revenue by 31 October 2009.
Failure to comply with this investigation may preclude a taxpayer from making a qualifying disclosure at a later date and significant penalties, publication and prosecution could follow.
Persons who are already under investigation or who availed of a previous enquiry in connection with undeclared income and/or undisclosed funds eg. enquiry into bogus non-resident accounts, offshore products or DIRT-liable accounts, will not qualify for the benefits outlined above.
A complete review of all trusts and offshore structures should be carried out to determine whether there are any undeclared tax liabilities.
As the benefits of making a qualifying disclosure are significant and the deadline of September 1, 2009 is fast approaching it is important that you seek immediate professional tax advice.
KPMG tax advisors, Odeon House, Eyre Square, Galway are available to assist in all matters relating to your personal tax affairs. For a confidential discussion, please contact Geraldine Lee or Mary Heffernan on 091 534600.
