Thursday, 12 October 2017
Department of Finance
Tax Reliefs Eligibility
I am advised by Revenue that section 787 of the Taxes Consolidation Act (TCA) 1997 provides tax relief in respect of qualifying premiums to retirement annuity contracts. In order to qualify for relief, an individual must have a source of “relevant earnings” which, in broad terms, means income arising from a trade, profession or a non-pensionable employment. Under section 787, where full relief cannot be given in a tax year in respect of premiums paid for that year because of an insufficiency of net relevant earnings, the unrelieved amount is carried forward to the next year and treated as a qualifying premium paid in that year.
I am also advised that section 955 of the TCA 1997, which is concerned with the tax years up to and including 2012, sets out the time limits for the making and amendment of assessments. It provides that, in general, assessments must be made or amended within a period of 4 years of the end of the tax year in which an individual has made a return containing a full and true disclosure of all material facts necessary for the making of an assessment and that no additional tax is payable after the end of that period. It also provides that repayments shall not be made outside of the 4 year period from the end of the tax year for which such a return is made.
Under section 955, an assessment may be amended at any time in the following circumstances—
- where the return made does not contain a fulland true disclosure of all material facts necessary for the making of anassessment,
- to give effect to the determination of an appeal against an assessment,
- to take account of a fact or matter arising from an event that happens after the making of a return,
- to correct an error in calculation, or
- to correct any factual mistake so as to align the assessment with the position as dis-closed by a taxpayer.
In these specific circumstances, any additional tax must be paid by the taxpayer and any overpaid tax must be repaid by Revenue, notwithstanding the general 4 year time limit for making repayments.
This statutory limit is binding on Revenue as well as on the taxpayer. Without having the facts of the case presented by the Deputy, it would appear that in this instance the individual is outside the 4 year time limit in which to request a repayment.