The document discusses recent developments in Irish taxation law including the curtailment of reliefs, increases in tax rates, and new taxes. It provides an overview of key areas of taxation such as income tax, corporation tax, capital gains tax, capital acquisitions tax, VAT, and property tax. Specific updates are given on income tax reliefs and rates, trading entities, pension contributions, revenue audits, and managing cash flow and property investments. The document concludes with an action plan to take advantage of upcoming tax changes.

1. Taxation Update
Andrew Guerin- FCPA, AITI
Andrew Guerin &Associates,
19 White Street,
George’s Quay,
Cork.
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012
Advisers 1

2. Recent Developments
 Curtailment of reliefs
 Standard rating of allowances
 Increase in tax rates
 New stealth taxes
 S.23 relief being reviewed
 Mandatory online filing
 PAYE Anytime
 Pre-population of tax returns
 Co-habitating couples –
registration
 Disclosure rules S.817D TCA 1997
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 2

3.  Income Tax
 Corporate Tax
 Capital Gains Tax
 Capital Acquisitions Tax
 Stamp Duty
 VAT
 RCT – New eRCT – Jan 2012
 Property Tax
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 3

4. Topics
Revenue Audits
Cash flow management
Pension planning
Managing property investments
Financial planning
Budget 2012
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 4

5. Income Tax
 Early completion of ROI
 Applies to all Taxpayers
 Top rate 52% - 55%
 Claim all allowances
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 5

6. Income Tax
Medical expenses 20% - was 41%
Mortgage interest relief – 31.12.2012
Professional fees
Rent allowance
Bicycle €1,000
Vouchers €250
Trade Union Subscriptions
College Fees
Bus/Train Pass
AVC Pensions
BES €150 K
Films €50k
4 year time limit
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 6

7. Income Tax
 Individualisation
 Family members
 Charitable donations €250
 Rental properties
 Foreign tax returns
 ROI deadline (File & Pay electronically)
 Medical card – income and health levy
exemption
 Compulsory online filing
 High Earners restriction
 Offshore funds (ROI)
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 7

8. Trading Entity
Company V Sole Trader
Sole Trader Company
More
Easy complicated
Less expensive Expensive
Less admin Limited liability
Loss relief 12.5% Tax Rate
Can easily Pension Planning
terminate
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 8

9. Trading Entity
Company V Sole Trader
 Initially Sole Trader then Company if required
 Maintains flexibility
 Reliefs for start up Companies
 Loss relief
 Terminal loss relief claims
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 9

10. Company Car
 Directors now keeping cars but paying
BIK on Org motor vehicle
 BIK costs hidden in P.60 figure. Do
you know the tax cost?
 BIK – buy car claim mileage
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 10

11. Trading Activity
 Accounting year end
 Change year/ends to generate tax
savings .
 Consider extension to accounting
period.
 Commencement and cessation rules.
 VAT on cessation (assets disposals)
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 11

12. Transferring Sole Trader to Company
 Corporation 12.5% tax rate
 Capital gains tax transaction
 Goodwill
 Shareholders/Partnership
agreements
 Retirement relief - €750k
 Medical profession, VAT, W/T
 Other professions
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 12

13. Termination Payments
 Tax free term payment now restricted
- €200k
 Pension lump sum tax free (Limit)
 Excessive tax rates
 Top slicing relief – 3 year average
 Calculating top slicing relief
 SCSB formula- actuarial value of lump
sum
 Spouses - ?
 Business disposal
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 13

14. Remittance Basis/Non-Domiciled
 Tax returns
 Foreign contract
 Split year residence
 Planning for remittances
 UK situations
 Foreign companies
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 14

15. Corporation Tax
Loss relief
12.5 %tax rate
Close co surcharges - dividends
Directors loans and IT liabilities
Inter Co loans- breach of Companies
Act
Company group structure
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 15

16. Corporation Tax
 VAT groups
 Pension funding
 Good investment vehicles/avoid
partnership (joint and several liability)
 Research and development credit
 Entertainment expenses
 Use of service companies for partnership
 Incorporation for medical practitioners and
other professionals
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 16

17. Capital Gains Tax
 25% rate previously was 40%
 B & B for annual exemption threshold
€1,270/€2,540 (share disposal)
 Timing of disposal of losses to shelter
future gains, losses c/fwd but not back
 Negligible value claims (Bank shares etc)
 Crystallise gains minimising commercial
exposure and CGT (EG deferring sale of Bank
share because of 25% CGT rate)
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 17

18. Capital Gains Tax
 Share options holding €500k shares in
Company. Crystallise at 25%.
 Retirement relief €750k
 Sole traders currently transferring
businesses to Co’s to advance
retirement relief claim before Budget
2012.
 CGT exemption for trading shares in
special purpose holding companies.
Gains can be rolled over within the
Company.
 Gifts to “connected parties” transfer at
market value triggering potential CGT.
 Consider transfer in current low market
value environment.
Andrew Guerin Associates-Certified
 No CGT on death Public Accountants & Chartered Tax
November 3, 2012 Advisers 18

19. Capital Acquisitions Tax
 25% rate due to increase (was 40%)
 Exemption thresholds /€544k (2009) to
€332K parents/children.
 Strangers down from €27,127 (2009) to
€16,604.
 Execute wills (Discretionary Trusts)
 Utilise the €3k annual exemption threshold
per recipient .
 Consider generation skipping
 CAT and CGT due on same transaction
(credit for CGT)
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 19

20. Capital Acquisitions Tax
 Utilisation of joint names on insurance
policies and bank account’s, immediate
transfer.
 Executing enduring powers of attorney
for elderly tax payers (Executors retain
control)
 Business relief and farming relief – 90%
reduction. (effective rate 2.5%)
 Discretionary trust levies 1% and 6%
levies.
 Filing deadline 30th Sept (previously 31st
Oct)
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 20

21. Capital Acquisitions Tax
 ROS Confusion – Deadline 30th Sept 2011
 PPS Numbers
 5/10% surcharge
 Offshore Trusts
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 21

22. CAT Rates Threshold
2009 2011
€ €
Child 542,544 332,084
Lineal Ancestor 54,254 33,208
Any Other Person 27,127 16,604
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 22

23. Pension Changes
 Recent developments
 Self employed v Co. Directors
 Income limits €115k previously €150k
and €275k.
 Allowable percentages 15%/ 40%
 Standard fund threshold €2.3 million
 PRSI Relief
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 23

24. Pension Changes
 Legitimate backdating of contributions
- 2010 – 31st Oct 2011 (15 Nov 2011)
 Alternatives to pension funding
including savings BES investments etc
 Company pension contributions
 ARF V PRSA - Murtagh Case
 Pension levy - 0.6%
 Public servants pension levy 3.8% - 9.6%
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 24

25. Pension Contributions
Age % of net relevant earnings
Under 30 15%
30-39 years 20%
40-49 years 25%
50-54 years 30%
55-59 years 35%
> 60 years 40%
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 25

26. Company Pension
Age Male- Female
% of Salary - % of Salary
30 156% 145%
25 159% 148%
40 165% 153%
45 178% 166%
50 200% 185%
55 222% 204%
60 330% 323%
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 26

27. Revenue Audits
 Frequency
 Business cost
 Pre audit planning
 Disclosure requirements
 Penalties
 Sectors
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 27

28. Cash Flow Management
 Tracker mortgages to preserved at all
costs
 Life assurance
 Transferring properties to Companies
 Creating group structure/inter co
financing
 Golden shares for group structure
 Revenue settlements
 Tax deferrals
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 28

29. Managing Property
Investments
 Financing
 Group structures
 Property Transfers
 Indictable offences
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 29

30. Financial Planning
 Company Pension
 AVC’s
 Separate life assurance (Co 4 times salary)
 Disability cover (PHI)
 Critical illness
 No social welfare protection for self-employed.
 Cover all risks
 Savings/Investments
 Keyman insurance –company tax relief
 Wills – guidelines
 Discretionary trusts
 Accounts in joint names
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 30

31. Budget 2012
 CAT – business relief
 CGT – retirement relief
 Pensions - €2.3 million cap marginal
tax rate
 Property Tax - new tax ?
 Other
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 31

32. Action Plan
 Early returns
 Early negotiations with Revenue
 Address pensions
 Exploit Business Relief
 Avail of retirement relief
 Review investments
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 32

33. Conclusion
Two certainties in life are Death and Taxes
Advance planning can minimise taxes!
Andrew Guerin Associates-Certified
Public Accountants & Chartered Tax
November 3, 2012 Advisers 33