The Gazette 1990

j A nua R y / february

1990

GAZETTE

V A L UE A D D E D T AX S T A T E M E NT OF P R A C T I C E (VAT/1/90) 4th S C H E D U L E A N D O T H E R S E R V I C E S R E C E I V ED F R OM A B R O AD 1. The Revenue Commissioners have prepared an explanatory leaflet in regard to the VAT liability of recipients of certain services received from abroad. The leaflet describes the tax liability of persons in respect of such services and outlines the requirements with regard to registration and payment of tax. Copies of the leaflet and further information are available from - The Office of the Revenue Commissioners (VAT Branch) Castle House, South Great George's Street, Dublin 2, (Tel. 01-792777 Extns. 2440, 2441, 2442, 2443) or from any local Tax Office. 2. Any person who incurs a VAT liability in respect of services received from abroad and who fails to notify the local Tax Office of the liability or who fails to comply with the obligations in regard to regis- tration and payment of tax will be subject to the pursuit of the tax due with any attendant interest and penalties under the statutory powers which are at the disposal of the Revenue Commissioners. Any person who has not discharged a liability in respect of the payment of VAT on services received from abroad in the past should contact the local tax office with a view to regularising the position. The Revenue Commissioners will deal constructively with such cases. Dublin Castle, Dublin 2. If any problems arise in relation to the above please contact the Secretary of the Taxation Committee, Ms. Eileen Brazil. One instance would be Irish solicitors, involved in extracting an English Grant of Probate, would pay the English solicitors costs, say £200 - net of VAT. The Irish solicitors should bill his client for that £200 together with Irish VAT at 23%, total £246.00. • INHER I TANCE TAX Policies issued under Section 60 F.A. 1985. As amended by Secion 84 F.A. 1989. WARNING Proceeds of policies of life assurance issued under the above March, 1990.

sections are exempt from inherit- ance tax when they are payable in connection with the death of the life assured. From on and after the 30th May, 1985, it became the practice to issue two contingent policies in the case of a husband and wife, each life insured to survive the other. Since the 24th May, 1989, the same cover was available under a joint life and life of survivor policy, whereby the proceeds became pay- able on the death of the survivor, who was then deemed to be the disponer of the proceeds. The standard Will, and that re- commended by the Law Society, in the case of a husband and wife contains a fixed period (28 days/30 days) survivorship clause. In the event of that clause becoming effective by the surviving spouse dying within the period, the ex- emption benefit of a Section 60 Policy is lost because the claims for tax will arise under the Will of the first spouse to die, as disponer, while the proceeds are payable on the death of the survivor, the deem- ed insured and disponer in respect of those proceeds - the exempting connection is broken. For example:- H & W by their identical Wills leave everything to each other provided the other survives 30 days with a giftover to their only child, C absolutely. They put in place a joint (or contingent) policy under the provisions of Section 60 F.A. 1985 as amended to cover the tax exposure on the death of the survivor. They are involved in a car accident. H dies on the 28th day of February and W dies on the 28th day of March. H's estate = £350,000 W's estate = Nil Policy Cover = £74,000 By reason of the death within 30 days, the provisions of H's Will take effect and the proceeds became payable on W's death and pass under her Will. There is, accord- ingly, no exemption. Inherits:- from H £350,000 Tax £74,000 from W £74,000 Tax £40,700 C has lost £40,700 by reason of the events. (Contd. on p.66)

Barristers' professional indemnity insurance As and from 1st May 1990 all members of the Law Library will be required to have Professional In- demnity Insurance for a minimum prescribed amount, initially to be a minimum of £100,000 The Code of Conduct for the Bar of Ireland has been amended accordingly, by the insertion of a new paragraph (numbered 2.13) as follows: "Every practising barrister is obliged to have professional indemnity insurance for a mini- mum amount, which amount shall be prescribed from time to time by the Bar Council. It shall be professional misconduct for any barrister who is not so insured to advise on the law, draft legal documents or pleadings, or act as an advocate, for a fee. The scheme for professional insurance arranged by the Bar Council shall not be available for those who are not members of the Law Library. Those who are not members of the Law Library and who intend to practise must ' satisfy the Bar Council that they have appropriate insurance in force". *With reference to the second paragraph, virtually all practising barristers, whether Dublin-based or on Circuit, are members of the Law Library and therefore will be part of this new compulsory insurance scheme. All barristers listed in the Society's 1990 Law Directory are (as of November 1989) members of the Law Library. D

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