This module is concerned with calculating and minimising Corporation Tax (CT), Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) liabilities. It builds on a prerequisite knowledge of the basic statutory and case law principles underlying the taxation of income and it extends to also cover stamp duties and Value Added Tax (VAT) on Irish land and buildings. It is concerned with equipping students with the knowledge and skills to identify all taxes arising as a consequence of a particular transaction and to understand and appreciate the interaction between those taxes. Emphasis is placed on problem solving and on devising appropriate strategies for minimising tax liabilities for both corporations and individuals.
CGT
- CGT administration procedures (including payment dates, filing dates and penalties)
- Computational aspects of CGT
- Territoriality rules and scope of charge for temporary non-residents
- Development land
- Principal private residence relief
- Relief from CGT on incorporation
- Retirement relief
- Transfer of a site to a child
- Disposals of shares (including bonus issues and rights issues)
- Purchase by a company of its own shares
- Share for share takeovers
- Holding company relief (S. 626B TCA 1997)
- Relief under S. 604 TCA 1997 for certain disposals of land and buildings (FA 2012 and FA 2013 reliefs)
- Recognise and advise on straightforward ethical dilemmas which can arise when dealing with CGT
- Determine appropriate treatment of assets passing on death and capital losses in year of death
- Calculate CGT for assets lost or destroyed including consideration of compensation/insurance monies received
- International issues – see below
CT
- CT administration procedures (including Revenue audits, the Revenue Online System, payment dates, filing dates and penalties)
- Computational aspects of CT
- Tax credit for research and development expenditure
- Establishing a business – the incorporation decision and the tax advantages of corporate status
- Small companies start up relief
- Relief for trade and non-trade charges
- Determination of residence and the scope of CT for resident and non-resident companies
- Exit charge (CT on accrued chargeable gains) for companies becoming non-resident
- Matters to be treated as distributions and dividend withholding tax system, including main exemptions from DWT. Recognise and advise on straightforward ethical dilemmas which can arise when dealing with corporate taxation
- Extraction of corporate profits
- Relief for relevant trading losses including relief on a value basis and terminal loss relief
- CT loss groups, relief under S 420 A and S 420 B TCA 1997 and consortium loss relief
- Mergers and acquisitions – reorganisation / takeover reliefs, transfer of losses with a trade (S 400 TCA 1997) and loss buying (S 401 TCA 1997)
- Groups for relief from CT on chargeable gains on inter-company transfer of assets (S 617 TCA 1997), claw-back of relief under S 623 where a company leaves a group, restriction on pre-entry losses
- Exit charge – S 627
- Depreciatory transactions and dividend stripping (S. 621 and S. 622, TCA 1997)
- Close companies and their effects, calculation of close company surcharge, transfer of assets at undervalue
- Taxation of investment companies, REITs, and directors/shareholders
- International issues (see below)
CAT
- Basis of assessment, scope (territoriality) and administration
- Meaning of terms
- Exempt assets
- Calculation of liability
- Gifts to and from companies
- Gift splitting
- Valuation principles
- Life and limited interests
- Free use of property
- Disclaimers
- Agricultural property and business property relief
- Relief for surrender of government securities
- Relief for favoured nephew / niece
- Relief for surviving spouses and for inheritance of family home from close relatives
- Relief for insurance policies
- Use of aforementioned reliefs in minimising CAT liabilities
- Interaction with CGT
- Recognise and advise on straightforward ethical dilemmas which can arise when dealing with CAT
- International issues (see below)
Aspects of international taxation
- Scope of CT, CGT and CAT and meaning of residence, ordinary residence and domicile
- Rules covering the location of assets for CAT purposes
- Application of CAT to overseas property
- Calculation of corporation tax for companies operating overseas
- Permanent establishments
- The subsidiary v. branch decision
- Introduction to controlled foreign companies legislation
- Double taxation relief – deduction and credit systems for relief from foreign tax
- Impact of EU and ECJ on Irish corporate tax system
Value Added Tax
- VAT implications in respect of the supply of land and buildings in Ireland;
Stamp Duties
- General principles and scope
- Property transactions
- Exemptions and reliefs
- Relief for transfers between associated companies
Instruction will involve formal lectures and class discussion on a number of scenarios (commonly encountered in business) which present scope for problem solving and tax planning. Computations of liabilities under the various tax heads will be completed during class-time. Students may also engage in self-based learning by using recommended material from the Irish Taxation Institute and other sources. In-class assessments will be used to facilitate assessment of student performance and feedback.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 80 |
| Other Assessment(s) | 20 |