The Gazette 1975

THE TAXATION REVOLUTION By JOSEPH L. DUNDON, Vice-President

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.

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.

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)

88