The 2010 Finance Act has introduced a fixed pay and file date for CAT (gift tax and inheritance tax) of 31 October. Previously, if a CAT return and payment was due, in respect of a gift or inheritance, the return had to be filed and the payment made, within 4 months of the valuation date.
- For all gifts and inheritances with a valuation date between 1 January and 31 August – the CAT return must be filed by 31 October of that year and any resulting CAT liability must be paid by that date.
- Where the valuation date arises between 1 September and 31 December the relevant date for filing and payment is 31 October in the next year.
It is not always possible to manipulate the valuation date (the valuation date will normally be the date of probate or the date of death) but where there is an element of control 1 September would appear to give the maximum amount of time before payment of 14 months.
The existing paper return (Form IT38) is being replaced with a simplified paper version where the beneficiary is not claiming any reliefs or exemptions except the small gift allowance.
Where any relief or exemption is being claimed the return must be filed electronically through ROS (access throught www.revenue.ie). A major advantage of ROS is that the system will calculate the correct CAT due based on the information entered on the return.
Remember that CAT is a Self Assessment tax. The obligation to make a return to the Revenue Commissioners rests with the person who receives the gift.
A surcharge will now arise in respect of late returns. A 5% surcharge applies subject to a maximum of €12,695 where the tax return is delivered within 2 months of the filing date. A 10% surcharge up to a maximum of €63,485 will be applied where the tax return is not delivered within 2 months of the filing date.
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