Introduction

Revenue’s investigation into the use of trusts and offshore structures starts on 1 September 2009. This investigation is targeting those persons who have not disclosed their trusts and offshore structures to Revenue and who have undeclared tax liabilities on these sources. Persons who have undeclared tax liabilities in relation to the use of these trusts / structures – either on the underlying funds and assets, or the profits and gains arising within, or disbursements made out of the trusts / structures – have an opportunity to make a qualifying disclosure to Revenue.

The investigation will cover all historic years for which there are tax issues.

Key Dates for Taxpayers – Qualifying Disclosure

Taxpayers have until 1 September 2009 to deliver a Notice of Intention to make a qualifying disclosure to Revenue. The deadline for making the follow-up Disclosure and Payment is 31 October 2009.
Taxpayers who are already under enquiry or who come within certain excluded categories are precluded from making a qualifying disclosure.

Where the rules are satisfied, the benefits of an unprompted qualifying disclosure will apply. The benefits are substantial mitigation of penalties, non-publication of the identity of the person and payment details, and non-prosecution.

Persons who do not strictly satisfy the rules are also encouraged to make a disclosure. They will not be entitled to the favourable treatment regarding penalties and non-publication, but Revenue will not initiate a criminal prosecution where a full disclosure and payment of undeclared liabilities is made.

In the event that a taxpayer has undeclared tax liabilities and fails to comply with the requirements to Disclose and Pay, Revenue reserves the right to consider initiating a criminal prosecution.

Third Party Reporting

Professional advisers, financial institutions and persons who, in the course of a trade / profession, have been concerned with the making of settlements / trust arrangements, involving non-resident trustees, in the period between 24 December 2003 and 30 April 2009, have until 1 September 2009 to deliver a return to Revenue.

The returns Form 8-S giving the names and addresses of the Irish resident / ordinarily resident settlors, non-resident trustees and the dates of the settlements should be sent to:

Office of the Revenue Commissioners,
Investigations & Prosecutions Division,
Special Projects Team,
5th Floor, Lansdowne House,
Ballsbridge,
Dublin 4.

The returns may be sent electronically by secure email to specialprojects@revenue.ie.

The onus is on the Third Party to deliver the return without any prompting or request from Revenue.

Further information on the reporting requirements, including the meaning of settlement, settlor and non-resident trustee, is available on the Revenue website. Copies of the returns Form 8-S are available from local tax offices and on the Revenue website.

Scope of Investigation

The Revenue investigation will focus on identifying undeclared tax liabilities by persons who have transferred or settled property, assets or funds to / on trusts or offshore structures. The term 'trusts and offshore structures' covers all categories of trusts [whether Irish or foreign] and offshore special purpose vehicles, entities, arrangements, agreements or rights – including, but not limited to, trusts, trust enterprises, foundations, establishments, offshore companies, nominee entities, employee / director benefit trusts and incentive plans, investment schemes / funds and investment partnerships.

The investigation will include an examination of the tax returns and reporting compliance requirements of the individual transferors and settlors and will cover all historic years for which there are undeclared tax liabilities.

The information received under the Third Party reporting process in relation to transfers and settlements of assets and funds will be examined and evaluated. The investigation may involve 'follow up' enquiries where this is considered necessary. In this connection, the legislation [section 896A Taxes Consolidation Act 1997] allows for the issue of a notice by a Revenue Authorised Officer on any person where there is reason to believe that the person has information relating to a settlement – whether the settlement was made before or after 24 December 2003 and whether the trustee is Irish or non-resident.

The legislative powers which are contained in the Taxes Acts may also be used in assisting with the investigation. For example, in seeking from taxpayers, financial institutions and other third Parties, the production of documentation, information and particulars that are relevant to the tax liabilities of the settlors and transferors of the assets and funds.

The automatic reporting of information under the EU Taxation Of Savings Directive and the exchange of information under the Tax Information Exchange Agreements in place will also be used in advancing the investigations and in ensuring the effective taxation of funds and assets channeled through intermediate structures, such as trusts, foundations and nominee companies.
 
Further Information – Qualifying Disclosure

Copies of the Notice of Intention and the Disclosure form SPT1 in relation to the Qualifying Disclosure Initiative are available from local tax offices and on the Revenue website.

A Revenue Helpline is available at 01 6329489 & 01 6329546, Monday to Friday, 8.30 am to 4.30 pm.
Enquiries may also be addressed to the Special Projects Team at the address shown above or by email to: specialprojects@revenue.ie

Where an adviser or taxpayer feels that a meeting with Revenue would be helpful in dealing with the taxation issues in complex or uncertain cases, a time and date for a meeting can be arranged by contacting the Helpline at the above phone numbers.