Business Asset Relief and Excess Cash

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In this article, Mark Doyle and Gearalt O’Neill discuss the impact of cash balances on a claim for CAT Business Asset Relief.

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Taxing Digital Assets

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Crypto-assets – high level Irish tax considerations

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Advice on the taxation of crypto-assets or initial coin offerings…

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Relationship Breakdown: Tax Implications

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Ireland has seen been both dramatic and welcome changes to the landscape of formalising and dissolving relationships over the last two decades. Among other things, we have seen a historical shift in modernising our tax code and moving it towards equality for all couples. We started the journey in 1995, with the divorce referendum passing by an incredibly tight 0.3% margin. The resultant Family Law (Divorce) Act 1996 allows a court to grant a decree of divorce where it feels confident that all of  the applicants are aware of the alternatives  to divorce and that there is no possibility of reconciliation. The tight margin was arguably due to a perceived worry that the “floodgates” would open and divorce rates would skyrocket. However, these fears have not yet been reflected in the statistics.
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Accounting for undistributed income

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A recent tax appeal case has highlighted the issues that the close service company surcharge can create for incorporated accountancy practices

Irish tax legislation provides for a surcharge on the undistributed income of certain professional service companies that are ‘close companies’ – that is, a company that is under the control of five or fewer participators.
The recent Tax Appeal Commission Determination (108 TACD 2020) concerns the application of the close service company surcharge to a company (‘the firm’) carrying on an accountancy practice.
The case centred on whether the principal part of the firm’s income was derived from professional or non-professional services.
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Tax Rules Regarding Share Valuations

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One of the trends among family businesses during the Covid-19 pandemic has been a renewed interest in succession planning.
This interest has been sparked by business owners taking stock of their own personal circumstances and falling profitability in many businesses. Taxes arising from inter-generational transfer of assets are levied based on the market value of the assets at the point in time of the transfer, reduced asset values result in lower tax bills. Reduced asset values coupled with beneficial tax reliefs that allow succession planning (e.g. retirement relief and business asset relief), now represents a favourable time to undertake such planning.

This article will focus on a high-level basis on the main tax considerations when undertaking the valuation of shares in a family-controlled company; this article will not focus on valuation methodologies.
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Possibilities in uncertain times

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The Covid-19 pandemic has resulted in the unusual spectre of the Government providing financial assistance to a large swathe of Irish businesses in order to keep their lights on. Whilst this period of Governmental generosity is viewed as an economic necessity, a large part of the cost of this financial assistance may ultimately have to be paid for by those same businesses and their staff in the form of future tax increases. One would have thought that the economy will require significant stimulation in the short term and therefore unlikely that tax rate increases  will be sought in VAT; indeed it is far more likely that VAT reductions are sought across many sectors to boost activity. The sacred cow of Irish taxation, the 12.5% corporation tax rate, will not be increased – as arguably to do so would be detrimental to the FDI sector.
Read the full article written by Mark and Amanda which explores the possibilities for mitigating future increased tax burdens.