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GAZETTE
MAY 1988
Sel f -assessment of Capi tal
Acqu i s i t i ons Tax
The Capital Taxes Branch of the Revenue Commissioners is
currently carrying out a pilot study on the self-assessment
of inheritance tax (the study is conf i ned to post Ma r ch 1984
cases). The results to date have been very encouraging. The
benefits for solicitors and their clients include much faster
settlement of cases and very significant reductions in
correspondence between the Revenue and solicitors.
Until the end of 1987, participation
in the study was largely confined to
a volunteer group of solicitors'
practices selected by the In-
corporated Law Society. We believe
that the benefits for solicitors of
participation are so significant that
we would now like to encourage as
wide a participation as possible. In
this article we describe the details
of the scheme as well as the
assurances in relation to claims for
potential negligence and exposure
to secondary accountability which
we are prepared to offer to
participating solicitors.
Background
Self-assessment of the direct
taxes, including Capital Acquisi-
tions Tax, was one of the most
s i gn i f i cant
r ecommenda t i ons
contained in the Fifth Report of the
Commission on Taxation. The
system works well in the United
States and a number of other
countries and is very cost effective
from both a revenue administration
and practitioner viewpoint. The
Capital Taxes Branch decided in
1987 to set up a pilot study to
explore the viability of a self-
assessment system for Capital
Acquisitions Tax. The planning and
operation of the pilot scheme has
involved very close co-operation
with the Incorporated Law Society.
Benefits for solicitors
The results to date have shown the
following benefits for solicitors
from self-assessment —
— Greater efficiency
— Significantly less correspon-
dence and lower compliance
costs.
— An assurance of speedy pro-
cessing of self-assessment
returns (over 50% of self-
assessed cases are dealt with on
the day of receipt in the Capital
Taxes Branch); priority has been
by
Don Tho r nh i l l,
Ph.D.,
M.Sc.(Econ.)
Assistant Secretary, Capital
Taxes & VAT Branches
Office of the Revenue
Commissioners
and
Andrew McLaughlin
B.A., Dip.Eur.Law,
Dip. Legal Studies
Assistant Principal, Capital
Taxes Branch and Manager,
Self-Assessment Unit
and will continue to be given to
these cases.
— Enhanced understanding of the
tax.
— Earlier administration of estates.
— Protection against claims for
negligence and assurances in
respect of secondary account-
ability.
An important feature has been the
guarantee of a high-speed turn-
around service. This includes the
handling of all aspects including the
issue of certificates of discharge.
The Valuation Office has also
agreed to process self-assessed
cases on a priority basis.
While at first sight self-
assessment wou ld appear to
increase costs for solicitors and
taxpayers because the assessment
computation would no longer be
done by Revenue, the experience
gained from the pilot study clearly
suggests that the opposite is the
case. The existing system of direct
assessment by Revenue on the
basis of returns gives rise to an
average of ten rounds of corres-
pondence per case. Thirty per cent
(30%) of returns submitted result
in nil liabilities. These figures
indicate a clear need for stream-
lining the system and for greater
efficiency. Self-assessment would
appear to be the logical answer. In
contrast to direct assessments by
Revenue, self-assessment holds
out the prospect of settlement of
V I EWPO I NT
(Contd. f r om
page
87)
Australia and Canada enabling
private citizens as well as
journalists to have access to a wide
range of official information. The
introduction of such legislation here
would ensure compliance wi th
A r t i c le 10 of t he European
Convention on Human Rights
which states that the right to
freedom of expression wh i ch
everyone has includes freedom to
hold opinions and to receive and
impart i n f o rma t i on and ideas
without interference by public
au t ho r i ty and regardless of
frontiers. An Official Secrets Act
limited to those matters which
really do affect the security of the
State or other vital interests would
be more seriously regarded than
the present Act.
It will however be difficult to
argue too strongly for a Freedom of
Information Act unless and until the
media, preferably by self-regulation,
establish a system to ensure that
the information obtained under it
will be used fairly and provide
proper machinery for those who
consider they have been unfairly
dealt w i th to have their complaints
properly examined.
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