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THE TAXATION REVOLUTION
By JOSEPH L. DUNDON, Vice-President
We are all far too busy with our day to day
concerns to take sufficient note of the revolutionary
changes in our system of taxation which are at
present taking place.
I wish to draw the attention of the Profession to
these changes, and to underline both the challenge
and the opportunity which they present. Very briefly,
the changes are:—
(1) The extension of income tax to farming profits.
(2) The introduction of Capital Gains ta*.
(3) The abolition of Estate Duty, and its replace-
ment by Wealth Tax, and Capital Acquisitions
Tax.
(4) A new system of Company Taxation.
No such radical change in taxation has taken place
in this country since the foundation of the State in
1922 and indeed the introduction of Estate Duty in
its present form in 1894 only covered a segment of
the area covered by the legislation now being enacted.
The reaction of the public here to these changes has
been fairly muted, principally because the vast
majority of the population consider that they will
not be aliected by these taxes. Whether this is so will
depend on Government Policy in the future, but it
is clear that, from past experience, tax systems once
introduced tend to be self-perpetuating, and it is
likely that, with inflation, more and more people will
be affected by these taxes, even if the thresholds are
not varied.
Apart from this the lack of publicity in regard to
the Capital Gains Tax Bill arises from the fact that
the Committee stage of the Bill is being dealt with
more or less by the experts in the Dail and is there-
fore not receiving any publicity in the daily news-
papers.
Over many years our Profession has tended to opt
out of most taxation matters with the exception of
Estate Duty, but if we were to adopt this attitude in
regard to these present changes, we would be doing a
great disservice both to our clients, and to ourselves.
In many cases a Solicitor is the first Adviser to be
consulted, particularly by members of the farming
community, who in the past have not been involved
with keeping accounts. To take one practical example,
Solicitors have often endeavoured to secure agree-
ment for low values on the transfer of farm land
from father to son, with a view to reducing liability
to stamp duty. To continue to do so may result, in
particular circumstances, in the transferee of a farm
having to pay an amount of capital gains tax on the
sale of all or part of the lands at some future date,
far in excess of the amount of stamp duty which can
be saved by keeping down the value of the lands on
the Transfer. There are many other such practical
examples of occasions when a working knowledge of
capital gains tax is of primary importance to every
Solicitor.
Wealth Tax and Capital Acquisitions Tax will,
between them, rcplace Death Duties. The Wealth Tax
Bill is at the time of writing having its second read-
ing before Dail Eireann, and the Capital Acquisitions
Tax has not yet been published. Each one of us would
be well advised to obtain copies of the Bills as soon
as they are available. Even at the expense of having
to plough through some fairly turgid prose, wc should
try to become familiar with the basic changes
envisaged.
The Incorporated Law Society hopes to organise
Seminars on these matters in June. The Institute of
Taxation of which some members of the Profession
are members, have already held the first part of a two
part Seminar on Capital Gains tax, and the second
part will be held on April 14th. Further information
can be obtained from the Secretary of the Institute
at 3, Fitzwilliam Place, Dublin 2. I understand that
the Institute plan to hold further Seminars on Wealth
Tax and Capital Acquisitions tax later in the year.
There is a great temptation to the busy Practitioner
to throw his hands in the air and say that be
cannot afford the time to study these changes, but in
my view, he does so at his peril.
The only consolation I can offer is that his
brethren in the Accountancy Profession will have to
go back to school also, and this presents our Profes-
sion with a golden opportunity to recover a great
deal of ground lost over the years due to lack of
familiarity with all aspects of taxation.
PUBLIC RECORD OFFICE OF IRELAND
The Deputy Keeper would appreciate the co-
operation of solicitors having space problems in
regard to pre-1922 documents in their custody. He
would ask them to consider depositing documents
in the Office and to write cir telephone:—
The Public Record Office of Ireland,
Four Courts, Dublin 7.
Tel. 778092 (Ext. 153)
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