Capital Gains Tax

Just wondering if anyone has noticed that Revenue appear to be trawling through Income Tax Returns that are a couple of years old in an effort to find any liability that should have had interest attached to it. I have had 2 cases in the past week where a client disposed of property in 2007, returned the information on their 2008 Tax Return and paid the CGT in November 2008. Now the Revenue (2 years later) are coming back and saying the CGT should have been paid in 2007 and are hitting the client with an interest charge for the one year delay. In one of these cases the interest is amounting to over €100k. It seems a bit unfair that the tax was paid 2 years ago and now Revenue are looking for interest.

Is there a case to be made here for the taxpayer?

The issue here is was the disposal recorded in the correct period and was the CGT paid in the appropriate period (a) or (b) in the relevant year. If it was, then I can not see Revenue having any case and I would be asking them to state the basis for the charge.

However you mention disposals in 2007 being returned in 2008 returns and the CGT being paid in November 2008.
The rules for 2007 were that CGT on disposals in the period 01/01/07 to 30/09/07 were to be paid by 31/10/07 and CGT on disposals in the period 01/10/07 to 31/12/07 was to be paid by 31/01/08. Was the CGT payment made late therefore? ( reference here S.950-959 TCA 1997)

Also, you mention disposals in 2007 being returned on the 2008 tax return. Surely the 2007 disposal should have been returned on the 2007 tax return and filed by 31/10/08?

You mention interest of over €100K in that case, obviously the CGT paid was a substantial sum. I imagine they are looking at material CGT payments to see if they were paid on time and if not then to see if there is anything further to be collected.

Separately, but related, I've had a number of recent Revenue enquiries asking for listings of investment properties to be given, when purchased, disposed, rents etc. for clients. It appears they are taking more interest in those areas.

My apologies. I meant to say that the CGT was included on the 2007 Return which was filed in October 2008. The original CGT liability was in excess of €1 million. It would appear as though the original payment was late. It's just galling that we are only hearing about this now - nearly 2 years after the event.

It's not uncommon for interest charges to be raised more than 2 years after the original tax has been paid, for all taxes not just CGT

Revenue just seem to be behind when it comes to issues like this.

It's almost as if someone looks at the auld bank account and says, "oops getting a bit low we need to get in some funds". Then they go trawling to see what items haven't been followed up on.

They're doing the same in relation to underpayments of preliminary corporation tax.

Liamos said:

It seems a bit unfair that the tax was paid 2 years ago and now Revenue are looking for interest.

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Yes I should say it is unfair; unfair that the exchequer didn't get its tax revenue a year earlier, when it was due to be paid! Your client had the benefit of that amount of money for the year from when it fell due up to when they actually paid it - if I got millions of quid for disposing of something I'd make sure I paid a competent professional to make sure my tax liabilities were dealt with correctly and at the right time. I would most certainly not then feel unfairly treated if Revenue came knocking on my door because I hadn't adhered to the self assessment system properly; which brings me onto my other point - of course it might take 2 years for them to catch up, why wouldn't it?!