Income Tax Clearance – Update
18 January 2024
We would have previously blogged on this site about the income tax clearance procedure and the steps to take to deal with this. How to deal with the procedure is set out in the Revenue manual, a link to which is set out below. What is not mentioned on the manual and to the frustration of many solicitors is that in fact Revenue prefer for applications for income tax clearance to be made through a TAIN account. In the view of Revenue it is best to make the application after the deceased has been linked to a TAIN account. However, you would need to be inspired to know this, as it is not mentioned in the manual.
A new procedure/practice is now emerging which is also not mentioned in the manual. It is often the case the Revenue, once they have received the clearance request seek further information – and generally near the expiry of the 35 working day procedure. At this time Revenue send the following message
I should be obliged if you would provide the required documentation and information:
(i) Confirmation that the necessary due diligence has been undertaken and completion of the attached Due Diligence Questionnaire.
(ii) Submission of any outstanding tax returns.
(iii) Confirm if [Deceased Name] had a life interest in a Will or Trust.
(iv) Confirmation if there is any income arising from the estate during the administration period.
(v) Confirm how any properties or land belonging to the deceased have been utilised since the date of death. If a property has been sold / rented during the administration of the Estate it may be necessary to register the Estate for tax purposes and file a return in respect of Capital Gains/ Income Tax. An Estate number can be obtained by completing a Form TRl available on our website.
The above list is not exhaustive and Revenue reserves the right to request further information as required
For those who may recall, the above list is similar to wording that used to be issued by Revenue when one sent to them the CA24 looking for clearance. It appears now with this new wording, that Revenue are looking to double up the work. (its kinda like having their cake and eating it!). Not only are they requesting one to follow the steps set out in the Manual (ie completing the due diligence questionnaire and filing returns) but one now has to deal with this additional information. In particular one can see from the above wording that Revenue are seeking a copy of the signed due diligence questionnaire.
As can be seen above and this is more and more the case, Revenue are looking for estate income tax returns in addition to returns of the deceased. So one must register the estate for income tax and inform Revenue of any post death income. Accountancy sources have indicated to this office that Revenue will not issue income tax clearance in some cases until these steps are taken.
Unfortunately, it appears that the income tax clearance procedure is becoming more and more cumbersome. If one is forewarned about these additional information requests at least one can plan for dealing with them. Being prepared for the request will help to remove friction from this extremely laborious procedure.
Hopefully, this helps and if you have any tax, probate, or will drafting issues please email Colm Kelly at email@example.com or reach out on the website
Here is a link to the Revenue manual