The Gazette 1982

CIA/E T N

JANUARY/FEBRUARY 1982

Correspondence

strongly urging the Society (to whom I am sending a copy) to take the matter up with the Revenue immediately and work out some agreed postion as a guide to its members. On a wider basis, I would urge also that the Society make immediate representations to the Minister for Finance with a view to preventing the introduction of further such items of outrageous legislation.

3rd December 1981

The Editor, Law Society Gazette, Blackhall Place, Dublin 7.

Yours sincerely

John F. Condon 9/10 Ely Place, Dublin 2.

Re: Assessment on Purchasers for Vendors' Land Dealing Tax

(See Note on this subject on page 17.)

Dear Sir, I have been trying unsuccessfully since April 1978 to induce the Society to make proper representations in regards to the impossible position in which Solicitors acting for non-resident Vendors are placed, by reason of the Revenue interpretation of Section 200 of the Income Tax Act 1967, as applied to Capital Gains Tax (See the March 1978 edition of the Gazette, which publishes a letter from the Revenue indicating that they would use this Section to assess a Solicitor for his client's unpaid Capital Gains Tax). Now, with the passing of the Finance Act 1981, we have what is potentially a worse problem - where a Solicitor is acting for a client who is purchasing from a non-resident Vendor. Section 29 of the Finance Act 1981 substitutes new Sections 20, 21, and 22 to the Finance (Miscellaneous Provisions) Act 1968. Section 21(2), in its substituted form, provides that if it appears to the Revenue Commissioners that a person, entitled to any consideration or other amount chargeable to tax under Section 20, is non-resident, they may direct that Section 434 of the Income Tax Act 1967 will apply to any payment forming part of that amount. In layman's terms, this means that the purchase of property from a non-resident Vendor could give rise to a charge to tax in the hands of the purchaser of 35% of the price paid. This puts the client (and his adviser) in an impossible position as:- 1) there is absolutely no provision in the legislation for obtaining an advance clearance that the Section will not apply to the purchaser 2) even worse, the purchaser has no reliable means of finding out if the person chargeable to tax under Section 20 is non-resident. He may be buying from a resident Vendor but, because of some "behind the scenes" transactions, the person chargeable to the tax could be non-resident, and 3) if it transpires that, subsequent to completion, a charge under Section 434 is made against the purchaser he has no obviops means of recovery against the person chargeable to tax. An indemnity has obvious limitations in this type of situation. Obviously, some limitation has to be put on the pratical operation of the Section or some advance prodecure for clearance will have to be worked out with the Revenue. I am asking the Gazette to publish this letter as a warning to colleagues, and I am at the same time

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