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FORM 11 TAX RETURN PREPARATION – IRELAND

 

 

The Income Tax Return filing deadline is 31st October 2024.

 

 

That deadline date is extended to 14th November 2024 provided you file both (a) your Income Tax Return and (b) your Income Tax Balance due for 2023 plus your 2024 Preliminary Tax.

 

 

When preparing your 2023 Income Tax Return, here are some Tax Reliefs you may not have considered before:

 

 

Childminders Tax Relief Scheme

 

You could be entitled to the Childminder’s Tax Relief if:

 

  • You mind three or fewer children in your own home at any one time and

 

  • You earn no more than €15,000 per annum.

 

  • You must have informed the HSE that you will be providing such services in your own home.

 

  • You must be registered as self employed and registered under self assessment.

 

 

No tax will be payable on the childminding earnings received, provided the amount is not more than €15,000 per annum.

 

 

As you cannot deduct any expenses, there is no requirement to maintain and keep detailed accounts.

 

 

If another person provides childcare services with you in your home, the €15,000 income limit is divided between you.

 

 

Despite the fact that you may have no Income Tax liability, you are obliged to file a Form 11 Tax Return by 31st October 2024 or 14th November 2024, whichever is relevant to you.

 

 

If, however, the childminding income exceeds the €15,000 annual threshold, the total amount will be taxed as normal under the self-assessment rules.

 

 

For further details, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-29.pdf

 

 

 

 

Irish rent tax credit

 

 

The Rent Tax Credit was introduced in Budget 2023 which is available for the tax years 2022 to 2025 inclusive.

 

 

In Budget 2024, the Rent Tax Credit was increased by €250.

 

 

When completing your 2023 Form 11 Tax Return the rent tax credit is worth a maximum of €500 per year from 2023 for a single individual and €1,000 for a married couple.

 

 

The rent tax credit is calculated as 20% of the rent paid in the year and is capped at €500 for a single person or €1,000 for a couple who are jointly assessed to tax.

 

 

When calculating your 2024 Preliminary Tax liability, the rent tax credit increases to €750 for a single individual and €1,500 for a married couple.

 

 

Please be aware that the claim must relate to rental payments which both (a) fell due and (b) were actually paid during the tax year of assessment.

 

 

This tax credit will only be available to taxpayers who are not in receipt of any other housing supports.

 

 

 

For further details, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-credit/index.aspx

 

 

 

 

Training Course Fees

 

Relief is available for fees between €317 and €1,270 paid in respect of Information Technology and Foreign Language courses which are on Revenue’s list of approved Courses.

 

To check the eligibility of your course, please click the following links:

 

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-languages-2009-10.pdf

 

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-it-courses-2014.pdf

 

 

 

These courses must be at least two years in duration and must not be a postgraduate course. Instead postgraduate courses in foreign languages or information technology may qualify for tuition fees relief.  For further details, please click the following link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx

 

 

This relief applies to fees if you are the student or if you have paid fees on behalf of another person.

 

 

For complete information, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/foreign-language-and-it-courses/index.aspx

 

 

 

 

To get your tax return filed before the income tax deadline, please contact us on queries@accountsadvicecentre.ie

 

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

What you need to know about CAT loans from Close Relatives – Mandatory Tax Filing

Succession Tax Advice

Gift and Inheritance Tax Advice

With effect from today, a new mandatory Capital Acquisitions Tax filing obligation is imposed on the recipients of certain loans from close relatives.

 

 

It applies to existing loans as well as new loans made since January 2024, irrespective of whether or not any gift or inheritance tax is due.

 

 

Until 31st December 2023, there was no requirement to file a Capital Acquisitions Tax Return in respect of this type of loan, until 80% of the recipient’s group class threshold had been exceeded.

 

 

The aim of this new requirement is to provide the Revenue Commissioners with greater visibility with regard to loans between close relatives in circumstances where the loans are either interest free or are provided for below market interest rates.

 

 

The individual is deemed to have received the benefit on 31st December each year which means the relevant return must be filed on or before 31st October of the following year.  Therefore, the first mandatory filing date will be 31st October 2025.

 

 

What is a “Close Relative”?

 

A close relative of a person, includes persons in the CAT Group A or B thresholds, and is defined as follows:

 

  • a parent of the person,

 

  • the spouse/ civil partner of a parent of the person,

 

  • a lineal ancestor of the person,

 

  • a lineal descendant of the person,

 

  • a brother or sister of the person,

 

  • an aunt or uncle of the person, or

 

  • an aunt or uncle of the spouse/ civil partner of a parent of the person.

 

 

 

What about Loans from Private Companies?

 

There are certain “Look Through” provisions which must be applied to such loans.  In other words, loans made to or by private companies will be “looked through” to determine if the loan is ultimately made by a close relative.  Generally private companies are under the control of five or fewer persons.  The holding of any shares in a private company is sufficient for these provisions to apply, including where the shares in the company are held via a Trust.

 

 

If someone receives an interest free loan of say €500k from a close relative’s company, the recipient of the loan would be deemed to take the loan from their close relative. As this exceeds the €335k threshold, this loan would be reportable.

 

 

These mandatory tax filing obligations apply in the following situations:

 

  1. Where the loan is from a private company to a person in circumstances where the beneficial owner of the company is a close relative of the borrower.

 

  1. Where the loan is from a person to a private company in circumstances where the beneficial owner of the company and the lender are close relatives.

 

  1. Where the loan is from one private company to another private company in circumstances where the beneficial owners of both companies are close relatives.

 

 

 

 

What Loans must be Reported?

 

A mandatory filing obligation arises for the recipient of the loan where:

 

  • there is a loan between close relatives,

 

  • he/she is deemed to have taken an annual gift,

 

  • no interest has been paid on the loan within six months of the end of the calendar year and

 

  • the total balance on the loan and any other such loan exceeds €335,000 on at least one day during the calendar year.

 

 

Whether or not a person exceeds the €335,000 threshold would need to be considered in relation to each calendar year.

 

 

A loan is deemed to be any loan, advance or form of credit. It need not necessarily be in writing.

 

 

All specified loans must be aggregated.  Therefore, if a person has multiple loans from a number of different close relatives, the amount outstanding on each loan, in the relevant period, must be combined to determine if the threshold amount of €335,000 has been exceeded.

 

The first returns must be submitted by 31st October 2025 in respect of the calendar year ending 31 December 2024.

 

 

 

 

What Information must be Reported?

 

The CAT return must include the following information in relation to reportable loan balances:

 

  1. The name, address and tax reference number of the person who made the loan,

 

  1. The balance outstanding on the loan and

 

  1. All other such information as the Revenue Commissioners may reasonably require.

 

 

 

 For further information, please click: https://www.revenue.ie/en/gains-gifts-and-inheritance/filing-obligations/index.aspx

 

 

 

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.