Revenue Off-Shore Trust Investigation - Reporting Obligations: Don’t Think it Doesn’t Affect You!
Revenue has announced an investigation into Trusts and Offshore Structures i.e. where the settlor was resident or ordinarily resident in the State and the trustees of the settlement were not resident in the State. The investigation will commence on 1st September 2009 and taxpayers who are affected may make a qualifying disclosure before that date.
As part of the initiative, Revenue is focussing on Section 896A of the Taxes Consolidation Act 1997 (inserted by s.93 Finance (No.2) Act 2008) which requires third parties, such as solicitors, who are concerned with the creation of a settlement which involves non-resident trustees, to make a return of information to the Revenue Commissioners.
At first glance, it may seem that this is of no relevance to you, as you are not involved in the creation of offshore trusts. However, in the context of this investigation, the definition of 鈥渁 settlement鈥 is much wider than what would normally be considered 鈥渁 trust鈥. Also, the phrase 鈥渃oncerned with a settlement鈥 is a very wide concept. Therefore, you are urged to carefully consider the section and its application to your practise.
Revenue requires returns to be delivered by 1 September 2009 in relation to qualifying settlements made between 24 December 2003 and 30 April 2009. For settlements made on/after 1 May 2009, the return is due within four months of the making of the settlement.
Revenue has confirmed that the investigation does not require returns to be made in respect of offshore trusts created as a result of intestacy. Clarification regarding testate situations is awaited and will be posted on the Society鈥檚 website when received.
Further information is available on the Revenue Website