Dáil Éireann Debate, Tuesday - 22 October 2013
140. Deputy Micheál Martin asked the Minister for Finance if he will review with the Revenue Commissioners if the long version of form IT38 for capital gains tax can only be paid online; if this is the case, if he will review the impact on non-ROS registered taxpayers, not all of whom might have computer access; and if he will make a statement on the matter. [44430/13]
View answerI am advised by the Revenue Commissioners that Form IT 38 is the statutory return on which beneficiaries declare any gifts or inheritances they receive for Capital Acquisitions Tax (CAT) purposes and it is assumed that this is the tax to which the Deputy is referring. Chargeable gains for Capital Gains Tax purposes, on the other hand, may be returned on the Form CG1 or Form 11. Depending on the circumstances of the case, CAT can be a complex tax. The Commissioners advise me that there is a short form of IT 38 which may be submitted on line or in paper form, and this is used in the simpler straightforward cases for example where no relief/exemption/credit is claimed, apart from the small gift exemption or where the property included in the return was taken from only one disponer and is not part of a larger benefit or series of benefits.
On the other hand where the circumstances of the gift or inheritance taken by a beneficiary are complicated by factors such as them claiming the more complex reliefs from CAT or, where the benefit they are taking is not an absolute interest, taxpayers are obliged to complete the long version of the Form IT 38 that must be filed online through the Revenue Online Service (ROS). Because of the complexity, it is the Commissioners' experience that these type of cases are generally handled by a solicitor or tax practitioner and in these circumstances filing online should not present any difficulty.
In line with the Government's policy on e-Government and e-payments, Revenue's stated strategic objective is to establish the use of electronic channels as the normal way of providing services to taxpayers and this, it seems to me, is a reasonable approach. Filing and paying taxes online is easier, more accurate, more efficient and taxpayers get more time to file.
A taxpayer who is not using an agent such as a solicitor to handle the relevant gifts or inheritances and wishes to file the long form IT Form IT 38 themselves, will, I am advised find it much easier to do so on line than on paper. The design of ROS ensures that the online form is simpler and quicker to complete. As information is entered, the system progressively customises the screens that have to be completed, thus minimising the number of screens and options presented. In addition, ROS holds up-to-date rates of tax, indexed group threshold amounts and other key data that ensure the correct tax due is automatically calculated once certain details are input by the taxpayer. Calculating the CAT liability on paper returns is significantly more difficult for taxpayers than using ROS as they have to enter the figures on the Return form and compute the liability themselves.
In addition, using the online IT 38 Return results in speedier processing by the Revenue Commissioners which in turn, in the case of inheritances, ensures that the administration of Estates are quicker, more efficient and less costly for the Estate and the ultimate beneficiaries.
The Deputy refers to people who may not be ROS registered or have no computer access. Registration can be arranged in such cases, and there is a dedicated ROS Helpdesk available at tel:1890201106. In the unlikely circumstances of a more complex case not being handled by a solicitor, the taxpayer can make a case to Revenue to be excluded from their obligation to pay and file electronically if Revenue is satisfied that the taxpayer does not have the capacity to do so. A person who considers that he/she may qualify for an exclusion should apply in writing to the local Revenue district.
For this purpose, “capacity” means sufficient access to the Internet and, in the case of an individual, also means not prevented by reason of age, or mental or physical infirmity from making a specified return or paying any specified liabilities by electronic means. Where Revenue does not approve a request for exclusion, the taxpayer has a right to make a formal appeal to the Appeal Commissioners.
Finally, while the long form IT 38 must be filed electronically, the Revenue Commissioners confirm that taxpayers can pay their CAT liabilities either electronically through ROS or alternatively directly to the Collector General by cheque, for example.
