Assignment Details:

1. Interpret and apply current Irish tax legislation in relation to corporation tax and capital gains tax
2. Identify and evaluate various tax incentive schemes
3. Select and apply appropriate reliefs and exemptions to Capital Gains Tax computation tax

PART A

For the purposes of capital gains tax, market value is in certain situations substituted for the consideration, if any, given or received on the transfer of an asset.

REQUIRED:

Outline the circumstances where this rule applies.

PART B

Jane inherited a two-acre site in Co. Meath in January 2000. She obtained planning permission in January 2019. However, she did not develop the land. Now in July 2020, she has been made a very attractive offer for the land by a local developer who plans to build apartments on the site. Also, in June 2020, she sold shares at a loss and is planning to offset this loss against the gain on the land in Meath.

REQUIRED:

Write to Jane explaining what is meant by development land and describe the CGT restrictions that will apply to Jane should she sell the site to the developer and whether she will be able to offset the losses from the sale of the shares in June 2020 against the gain on the land.

PART C

Fergus Fallon, aged 50, worked for Sunrise Ltd for many years but was made redundant two years ago. He received a substantial payment of €250,000 when he left Sunrise Ltd. Since losing his job Fergus has tried to secure another job but with no success. He has now decided to set up a company in the area of Online Learning, selling courses to various customers across the EU and will invest the money he received from his redundancy into the company.
Fergus will own 100% of the share capital in his new company, Online Learning Ltd. He has contacted you for advice on the tax implications of setting up a company in Ireland. He needs advice on the best structure for his Irish operations and wishes to set it up in such a way that he may be able to sell the online learning business in 5 to 7 years’ time. He is anxious to minimize his tax liabilities as far as possible and would like to avail of as many reliefs as possible.

REQUIRED:

1. Advise Fergus on the tax implications of setting up a company in Ireland and advise him on any reliefs that are available for his start-up company.
2. Advise Fergus on any reliefs that may be available to him should he wish to sell the company in the future.