Tom, congratulations on your new book. What are the changes made to CGT in the Finance Act 2021 that practitioners should watch out for?
Thank you for that, very much appreciated. It’s hard to believe that this is the fourth edition of this text especially when you think of all we’ve been through during those years. The Finance Act 2021 which was signed into law by the President on 21 December 2021 so the book contains amendments to TCA 1997, s 604 which looks at the disposal of principal private residences and indeed transfers arising from certain mergers under the Companies Act 2014. It also looks at recent decisions of the Tax Appeals Commission, as well as in the Irish and UK courts.
It’s very hard to pick one case given that they all have significant impact on the taxpayers concerned. However, the volume of published decisions is to be welcomed as that can only increase our understanding of the application of the tax.
I think given that many start-ups and scaling companies can be very focussed on cash-flow and may not have the resources to pay significant salaries, so giving employees some “skin in the game” is one way of attracting talent to those companies. There are a number of changes to the scheme that were to be brought about by commencement order in the past that have yet to be commenced and would be beneficial. The exclusion of certain companies should be reviewed. The scheme should allow a company buy back of the shares from the employee and ensure that CGT treatment still applies.
I think the improvement to KEEP we discussed earlier would be significant in attracting talent for those companies. The R&D credit is one of our biggest tax expenditures and is a key relief in attracting such expenditure to Ireland. Improving that would be a key change and could be done by among others reducing the monetisation period of time for the credit would be significant.
I think it’s the constantly evolving nature of it, that what you know before budget day may no longer apply, the day after budget day. The sense of constant change brings an excitement to what you do as part of the day-job. So it’s never boring.
That it only applies to investment type transactions. If you have an asset and you sell it then Capital gain tax is in point. There are many reliefs from its application so that wasting assets like cars etc are not generally subject to its bite, but it is wide-ranging.
One could hope that the rate will decrease in order to help stimulate further investment. There will probably be changes coming due to international tax developments.
I do, but I have to say it is an honour to be associated with Bloomsbury’s leading titles. I still remember the email I got for from the publishers seven or eight years ago, out of the blue, asking whether I would want to take the helm on Irish Income Tax (formerly known as Judge). It was such an honour to be considered for such a title given that I grew up in tax terms, with it. So being asked to author it was something else. I then got the chance to write my own book in Capital Gains Tax before being asked to “take the wheel” of the Taxation of Companies (Formerly Feeney) which Minister Donohoe kindly wrote the foreword for. I have been allowed to stand on the shoulders of giants and I’m extremely grateful to Bloomsbury Professional to have been considered for the opportunity.
Tom Maguire's tax annuals, Irish Income Tax, Taxation of Companies, and Irish Capital Gains Tax, are available in hardback and eBook formats, as well as available as part of our Irish Tax online service on Bloomsbury Professional Ireland Online.