#17604 - Remittance - Revenue Law

Schedule D Case III charges are governed by s.18(2) TCA 1997 and in summary concerns “charges [to] untaxed interest and income from foreign property” (Taxworld) basically, income from investing abroad which is not subject to tax at the source. S.18(2)(a)-(f), provides indication as to the types of incomes which are subject to a Case III charge. It is important to, take time to evaluate some of the six categories due to the fact that each contain a certain distinguishing factor from the others. To begin with s.18(2)(a), the first chargable income is on “any interest of money, any annuity or other annual payment”, this is one of the more common of the six and thus is important. The term interest of money has been defined in the case of Re Euro Hotel (Belgravia) Ltd. [1975] to contain two key requirements to classify something as interest these are, “a reference amount and sums due”(Bowler Smith p.158). An annuity is also taxable under this case however, not as popular, the term annuity is defined in Foley v. Fletcher, which states that “an annuity represents the liquidation of a capital sum in return to a right to a future interest”. Such as something like a pension where you pay a sum into it and they give back an annuity sum at the end. An annual payment occurs then If you cannot tie an income to the previous too, this form of income is more general and can apply to things such as income distribution from a trust or in a more general term pure income profit (Re. Hanbury).

Annuities and annual payments take special tax treatments founded in s.237 & 238 of the Act.

Schedule D Case III can be beneficial for those whom are not Irish domiciled, Which simply means that anyone who does not consider themselves to be from Ireland and if you do not fall into this category of people then remittance under schedule D case III is not applicable and case III in general can be quite messy for those whom are subject to it, as the foreign possession dependent on its whereabouts may be subject to tax there. As domicile is such a concerning pre requisite it important to note that you domicile is something all individuals have be it by origin or choice, it mostly depends on someones nationality or where they spent most their life. Ireland has double taxation treaties with many countries which is beneficial to the Irish domiciled person with interests abroad as with double taxation, countries can agree to allow an individual to be subject to one countries tax as opposed to both. Subsequently if there is no double taxation treaty in place between one country and another country then the tax bill will be quite large for the Irish domiciled person. Under “[t]he Case III charge on interest from foreign securities and income from foreign possessions is modified in the case of non-domiciled persons and Irish citizens not ordinarily resident in the State so that the charge is confined to the sums actually remitted to the State under s. 71 TCA 1997,” (Maguire).

Firstly it is important to mention some recent shortenings of the remittance basis, in 2006 the FA blocked off the remittance basis for employment income where duties were carried out in Ireland (class notes) reason for this was that it had become very popular for foreign nationals to come to Ireland working with multinational countries, getting paid their wage in the tax haven country, had the ability to bring in as much as they needed an were only taxed on that only. In 2010 it was also introduced that Irish people whom were non-ordinarily resident could not be qualified for remittance basis. Also as has been mentioned s.6 FA 2013 introduced the anti-avoidance provisions, to stop those creating loopholes around the remittance basis. The mentioned section also amended s.71(2) to entitle “an individual resident but not domiciled in the State to be taxed in respect of his foreign source income taxable under Sch D Case III on the remittances into the State out of that income, instead the full amount of the income arising from the foreign sources”. (Maguire 13.401).

Remittance then in a broad general sense is the bringing in of money to Ireland, however it is not as easy as that to define, as seen through its problematic statutory definition in s.71 (3) which has been the cause of great grappling amongst the court in dealing with its meaning, when it provides that Case III charges are “to be computed in such a case on the full amount of the actual sums received in the State from one of four sources; remittances payable in the State; property imported, money or value arising from property not so imported; and money or value so received on credit or on account in respect of such...