Do you need to submit an Income Tax/Capital Gains Tax return?

Throughout the year, we receive reminders through the national media that we may be required to file a tax return (Form 11) by 31 October. Many of us will dismiss the reminders on the basis that we do not fall into the category of individuals who are required to file the income tax/capital gains tax return.

However, it may be wise to take stock and consider if there is a requirement to file a Form 11 and to consider the necessary details to be included. Failure to submit an income tax return on time may lead to a surcharge of 5% or 10% of the tax payable depending on how late the return is.

Who is a chargeable person?

For income tax purposes, a chargeable person is an individual who is required to file an income tax return (i.e. Form 11).

It is generally recognised that self-employed individuals and directors with more than a 15% shareholding in a company are chargeable persons and are required to file the annual Form 11. Individuals who are in receipt of PAYE income only (and are not proprietary directors) are not generally required to file a Form 11. In addition, those with PAYE income and small amounts of other income may not be required to file on the basis that the other income can be taxed through the payroll by adjusting tax credits, or where the income may be taxed at source.

The main purpose of this article is to highlight that there are many other ways in which an individual, who would not otherwise be obliged to file an income tax return, becomes a chargeable person. For the avoidance of doubt, a taxpayer is considered to be a chargeable person and therefore required to file an income tax return once they fall into one or more of the following categories:

Receipt of trading income	Income from a business, trade, profession or vocation.
PAYE income, and other non-PAYE income over €5,000 (net)	Non-PAYE income greater than €5,000 from other sources refers to income after deducting capital allowances, expenses and losses carried forward. If an individual has PAYE income and if their other (net) non-PAYE income is over €5,000, they may be a chargeable person e.g. a landlord, who also earns a salary, and whose net rental profit is greater than €5,000. The net rental profit in this instance refers to rental income less expenses, capital allowances and losses. If the net rental profit is €5,000 or less, the taxpayer should still inform Revenue of this income so that it is taxed by having it effectively coded into the taxpayer’s tax credits.
PAYE income, and other non-PAYE income over €30,000 (gross)	Non-PAYE income in this scenario refers to gross non-PAYE income greater than €30,000 from other sources. It is the total income for a year of assessment before deducting capital allowances and losses e.g. a landlord whose gross rental income is, say €40,000, but their net rental income after deduction of expenses, capital allowances and losses is only €2,000 – they may still be a chargeable person as the gross rental income is greater than €30,000. If the gross rental profit is €30,000 or less, the taxpayer should still inform Revenue of this income so that it is taxed by having it effectively coded into the taxpayer’s tax credits.
Other income (dividends, deposit interest, rental income etc)	Other non-PAYE Income includes dividends, deposit interest, rental income, covenants, estate income, maintenance payments, investment undertakings and untaxed income. If a taxpayer does not have PAYE income, the de-minimis amounts of €30,000 (gross income) and €5,000 (net income) do not apply as it is not possible to have the other income coded onto the taxpayer’s tax credits.
Proprietary directors	A “proprietary director” is a director who is the beneficial owner of the company, or is able, either directly or indirectly, to control, more than 15% of its ordinary share capital.
Share options granted	A share option is a right that your employer grants you to acquire shares in the company. You are considered a 'chargeable person' for the year in which you exercise, assign, or release a share option.
Foreign income	Foreign income chargeable to tax in the Republic of Ireland, e.g. a foreign pension.
Opened a foreign bank account in the tax year	Individuals should be aware that opening an online bank account that is regulated by a foreign authority could constitute the opening of a foreign bank account for Form 11 reporting purposes. The simple act of opening an online bank account such as the popular Revolut or N26, which is regulated by a foreign authority makes an Irish resident a chargeable person and therefore bound to file a Form 11, even if any income earned by them was taxed through the PAYE system.

If the taxpayer is using Revenue Online Service (ROS) to file their tax return, they are now required to confirm why they are filing a Form 11 and what deems them to be a chargeable person.

Foreign bank accounts

For individuals who are generally in receipt of PAYE income, particular care should be given when considering foreign bank accounts. Opening a foreign bank account deems a taxpayer to be a “chargeable person” for self-assessment purposes in the year in which the bank account is set up. Full details of the bank account, including details of money deposited, must be disclosed.

In addition to this, it is worth noting that foreign currency may be considered a chargeable asset in itself and as such should be considered for CGT purposes.

Capital Gains Tax

Capital Gains Tax (CGT) is an important aspect of the Form 11. Any disposals of assets should be reported on the Form 11. This information should include both the consideration received for the asset and the category of the asset which was disposed of. Any gains or losses should also be detailed on the Form 11.

Any CGT due relating to disposals in 2023 should be paid by the relevant due dates, which are:

Disposal Date	Due Date
Between 1 January 2023 and 30 November 2023	15 December 2023
Between 1 December 2023 and 31 December 2023	31 January 2024

Additionally, if the taxpayer is claiming a CGT relief in respect of a disposal, this should be disclosed in the relevant section of the Form 11.

Chargeable Assets Acquired

Details of any chargeable assets acquired during the tax year and the consideration paid for same should be included on the Form 11.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars private client team below:

Staff Member	Position	Email	Telephone
Alan Murray	Tax Partner	amurray@mazars.ie	01 449 6480
Siobhán O’Moore	Tax Director	somoore@mazars.ie	01 449 6418
Adrian Farragher	Tax Manager	adrian.Farragher@mazars.ie	01 449 4447

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