I am informed by the Revenue Commissioners that under the legislation governing the operation of Relevant Contracts Tax (RCT) the general position is that the obligation to operate RCT is placed on the principal contractor under the construction contract. A principal contractor must operate RCT on payments to subcontractors not only where the construction work being carried out relates to a third party construction project but also in a situation where the construction work is carried out on the principal contractor's private residence.
I am also informed by the Revenue Commissioners that the son of a builder would not have to register as a principal contractor and implement RCT solely because he was related to a person who was involved in the construction industry. However, section 531(1)(c) of the Taxes Consolidation Act, 1997 requires the operation of RCT where a person who is connected with a company carrying on a construction business undertakes construction operations. Therefore, a builder's son would only be obliged to register as a principal contractor and operate RCT in connection with the building of a warehouse on his land, if he (that is, the son) was connected with a construction company. In this context, "connected" requires the son or the son and persons connected with him (e.g. his father) to have a controlling interest in the construction company. This rule would not operate if the father's construction operation is unincorporated.
There is no discriminatory treatment in the RCT legislation against family members of those engaged in the construction industry. Indeed, the legislation is carefully worded to ensure that any such discrimination is avoided by ensuring that a connection created by a family relationship is, in itself, not sufficient to bring a person within the RCT provisions.