New CGT Clearance for Non-Residents
03 November 2022
In previous blogs, I talked about the secondary liability of solicitors in relation to capital gains tax liabilities when property in Ireland is sold by non-resident owners. That article is linked below at the bottom of this blog. Essentially, solicitors are potentially liable for the capital gains tax of non-resident clients when selling property in Ireland, particularly if they are in control of funds. Therefore the normal procedure in the past was that capital gains were paid and then one did not distribute the balance of sale proceeds to the client until a Notice of Assessment (NOA) issued from Revenue.
This was unsatisfactory because you never really knew when the NOA was going to issue. Also, there was no central system for this and one just submitted to the local office and waited to see what was the outcome.
Revenue have now introduced a new clearance system similar to the clearance system used for income tax cases in deceased cases. A link to the page from Revenue dealing with the new system is set out below. While the system has features similar to the deceased clearance arrangement for income tax (for example, once you submit you can distribute after 35 working days if there is no response from Revenue) a key difference is that the person applying for clearance must have a TAIN. Then the agent must be linked on ROS to the taxpayer. It should be noted that in particular this system only applies to real property. It doesn’t apply to other assets disposed of such as shares or disposals of other assets.
A submission for clearance is made through My Enquiries, through a new section called CGT / Non-residents. A detailed submission must be made to Revenue at the time of seeking clearance and this is fleshed out in the manual which can be obtained from the link below. One must include a range of documents, via My Enquiries, in particular, a CGT computation, copy contract of sale, the Form CG1, and other documents.
Once these are submitted, this constitutes an application for clearance. If no queries are raised it is possible to distribute after 35 working days.
Here’s the link to my previous blog on the area
Here is a link to the Revenue page on the issue
Hope this helps and if you have any probate, tax, capacity or will drafting queries please reach out to email@example.com