1. Investment Undertakings (Funds) - Key AmendmentsThe Finance Bill 2008 (as initiated) was released yesterday 31st January 2008 and there have been some welcome amendments included to assist the funds industry in administering the 8 year deemed disposal rules. 2. 8 Year Deemed Disposals Section 36 of the Finance Bill amends the operation of the eight-year deemed disposal provisions for Irish resident or ordinarily Irish resident investors ("Irish Resident") as introduced by Section 50 of the Finance Act 2006. While the legislation is quite complex, in summary the new amendments provide that the administrative burden of applying the onerous 8 year deemed disposal provisions should for the most part lie with the Irish Resident investors where they account for a small proportion of the fund's (or the sub-fund's in the case of an umbrella scheme) overall investments. The main provisions are as follows: 1. De Minimis level Where taxable Irish Residents hold less than 10% of the fund (calculated by value of shares) or in the case of an umbrella fund, 10% of the sub-fund (calculated by value of shares), then the obligation to account for the tax on any gain arising on an 8 year deemed disposal will be the responsibility of the investor on a self assessment basis (as opposed to the fund or its service providers) i.e. the investor will be required to include the relevant details in their annual return and account for the tax themselves. This however, will only apply provided (i) the fund has made an appropriate election and (ii) it provides in each year of assessment a statement to the Revenue Commissioners in electronic format approved by them, certain details for each unit holder (including a nil return, where applicable) by the 31st of March in the year following the year of assessment. 2. Repayment of Excess "first tax" - Where taxable Irish Resident investors hold less than 15% of the fund (calculated by value of shares) and a refund of tax arises (e.g. subsequent loss on an actual disposal) and the fund has made an appropriate election, the amount of excess first tax over the "second tax" will be repaid by the Revenue Commissioners to the relevant investor rather than by the fund (on receipt of a claim by the investor). This removes the responsibility of the fund or its service providers having to track the tax over the lifetime of the units and puts the onus on the unit holder to claim the refund directly from the Revenue Commissioners. 3. Valuation...
Finance Bill 2008
|Author:||Mr Sean Murray|
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