The Gazette 1978

GAZETTE Correspondence CAPITAL GAINS TAX Following comment made at various meetings of Bar Associations, representations were made to Mr. G. Collcy, T.D., Tánaiste and Minister for Finance, to the effect that the administration in respect of the above tax should be centralised. The following reply has now been received from An Tánaiste: Oifig an Aire Airgeadais Baile Atha Cliath 2. 22 May 1978 Mr. James J. Ivers Director General The Incorporated Law Society of Ireland Solicitors' Buildings Dublin 7. Dear Mr. Ivers, I refer to your letter of 10 February about capital gains tax. You mentioned in your letter that it has been represented strongly to you by a number of solictors that the administration of the Capital Gains Tax Act should be centralised. I would not be in favour of this course for a number of reasons. The main reason is that the administration of the Capital Gains Tax Act is bound up with the adminis- tration of income tax and corporation tax and both these taxes are administered by the Inspectors of Taxes from various centres throughout the country. For example, taxpayers are required to make a single annual statutory return for the purposes of income tax and capital gains tax and the essential check for the purposes of capital gains tax is made by reference to the disposal of assets as disclosed by this document which is supplied to the relevant inspector of taxes. A centralisation of the capital gains tax administration, involving a separate capital gains tax return, could result in a duplication of queries in many cases and in unnecessary correspondence which would be troublesome to taxpayers, who would no longer be able to have their income tax and capital gains tax dealt with in the same tax office. In the case of corporation tax, the aggregate of the income and the chargcable capital gains of a company is assessed to corporation tax in one sum. The agreement of the assessment which is based on the examination of thd accounts of the company is one idivisible operation from which the capital gains aspect could not be divorccd. Furthermore, it is considered that the close monitoring of the 'roll over' provisions of Scction 28 of the Capital Gains Tax Act. which is necessary to ensure that the time limit for the making of assessments is not over- looked, can only be done effectively by the inspector who determines the annual profits or gains of the person or , company owning the asset involved. Another reason for adhering to the present administrative arrangements is that approximately eighty per cent of the cases in which capital gains arise are settled conveniently and expeditiously by negotiation locally between the inspector and the taxpayer or his agent, usually an accountant. Where, exceptionally, such agreement is not possible, the liability would fall to be

JULY-AUGUST

1978

determined by the Appeal Commissioners at an appeal hearing held locally at which the Revenue would be represented by the inspector of taxes and the taxpayer by his agent. The centralisation of the capital gains tax administration would, on the other hand, inevitably lead to considerable delays in the majority of cases, where, as stated, there is little or no delay at present. This would cause greater inconvenience to taxpayers and their agents than 'the multiple source of enquiry' to which you referred in your letter. Finally, mention was made in your letter of the rule of the Capital Taxes Branch of the Revenue Com- missioners. A relatively small number of cases are in fact referred either to the Valuation Office (mainly cases in which the market value as at 6 April, 1974, is taken as the base cost of land) or to the Capital Taxes Branch of the Revenue Commissioners (mainly cases in which a valuation of unquoted shares arises). Such valuations, particularly of unquoted shares, may involve detailed enquiries or negotiations in which event delay may be unavoidable. These delays in the small number of cases involved would occur whether the capital gains tax is administered locally or centrally, and certainly would not justify centralising the administration of the capital gains tax. Yours sincerely, George Colley, Tánaiste and Minister for Finance.

ANONIMITY

Killester, Fairyhouse, Ratoath, County Meath, Republic of Ireland. 4/5/1978.

Sir, Looking over the Gazette for March 1978,1 desire to refer to two items therein, and both of them, even as minutiae, will help contributors in future issues: (1) In a bracketed headnote under "Women and the Law" you explain that the author would rather remain anonymous for reasons "not altogether abstruse". If a thing is not altogether abstruse then it is not abstruse at all and ought to be told obviously. (2) In another Article, highly laudatory in its tone, the author of it merely puts his or her initials at the foot. Is this another case of abstrusencss? — or why cannot people reveal their identity? It is quite a coincidence that the first essay (page 31) is entitled "Go public, your privacy is dead". Yours truly, Michael C. Bcatty. 9 1