Comprehensive Taxation Report: Application of Irish Taxation Principles and Computations

Assignment Instructions

The Written Assessment should be written at the conclusion of the course, once all
sessions have been completed. The submission date is approximately two weeks after the
final session of the course; please check the LMS for the exact date.

The goal of the report is to apply your knowledge of course concepts, models and practices
in your own context thought the completion of multiple real-life scenarios which will cover
all the primary tax heads including income tax, capital gains tax, capital acquisitions tax,
corporation tax and VAT with the overall overarching objective as being to clearly
demonstrate the application of the course learning outcomes:

1. Demonstrate how the Irish Tax System operates including the main sources of tax
legislation.

2. Develop technical capabilities to prepare tax computations and returns across a
range of tax heads for both individuals and companies.

3. Identify and evaluate tax planning opportunities to minimise tax liabilities for both
individuals and companies. For this assignment, you should clearly demonstrate your ability to:
● Identify and calculate the taxable incomes, associated benefit-in-kind calculations,
commencement to trade provisions and other relevant tax deductions and personal
credits.
● Demonstrate your knowledge and practical application of capital gains tax
calculations, reliefs and exemptions.

● Demonstrate your understanding of capital acquisitions tax, the associated
calculations, exemptions, and reliefs.

● Apply theoretical VAT computational rules in determining an individual’s liability to
VAT while demonstrating general knowledge on VAT deductibility and place of supply rules.

● To analyse and interpret a set of circumstances to determine the optimum trading
structure as being to trade as an individual or via a corporate structure. Conclusion

● Summarise the key points covered.

● Reflect on the importance of accurately identifying and applying tax principles.

Final Report How-To Guide

References

● List all sources used in APA/Harvard Referencing or your preferred citation style.
By following this structure, you can effectively demonstrate your ability to identify and apply critical elements in a taxation assignment.

Format

● Submit your document in Word format
● Include Title Page
● Word count guide: 3,000 – 3,500 words +/- 10% (Excluding reference list)
● Font Type: Calibri or Arial
● Font Size: 11
● Line Spacing: 1.5
● Page numbers: include at the bottom of each page
● Referencing style: Harvard (preferable, or another you are familiar with, provided it
is used consistently and correctly)

Suggested Layout:

Each case study should contain the following

1. Introduction – identify and introduce the change to be implemented, briefly explain
the background and set context.

2. Body of the report – to include appropriate headings/subheading appropriate for
each individual case study.

3. Conclusion

4. Overall References for the entire assignment.

CASE STUDY INSTRUCTIONS:

You are required to do Case Study 1 and choose one of the remaining two case studies
outlined below for your written report and apply all relevant criteria outlined in this
assessment brief to developing and analysing this case study.

CASE STUDY 1 – PETER & AVA (Mandatory):

Peter (aged 45) and Ava (aged 52) are both Irish residents, domiciled and jointly assessed
for tax purposes.

INCOME TAX

Peter is employed as a sales manager within a multinational company. Details of his
income and other benefits from this employment for 2024 are as follows:

Final Report How-To Guide

● Gross salary for the year €145,000, from which PAYE of €50,640 was deducted.

● The use of a new electric company car purchased on 1 May 2024 for €70,000 with
Peter’s mileage being was 28,000km in this period, of which 20% are personal.

● The company pays medical insurance on behalf of Peter and his family. The total
premium paid to the medical insurance company on behalf of the family on 1
August 2024 was €3,200. This is net of tax relief of €1,000.

● Peter was given a total of €640 to cover working from home costs in 2024 (this
represented a payment of €3.20 per day).

● Peter contributes 10% monthly from his salary to his pension fund. In addition to
this, he paid an additional voluntary contribution of €35,000 to his pension on 20
February 2024.

Ava commenced to trade as a counsellor on 1 April 2021 and had tax adjusted profits from
her business as follows:
● 1 April 2021 to 31 March 2022 €75,000
● 1 April 2022 to 31 March 2023 €95,000
● 1 April 2023 to 31 March 2024 €40,000
In addition, the couple had the following sources of income during 2024:

● Rental income from a residential apartment that the couple own jointly of €27,000
per annum.

● The tenancy was registered with the Residential Tenancies Board (RTB). Insurance
of €1,800, ○ Maintenance costs of €2,400 and local property tax of €175 were paid for
2024.

○ Mortgage interest paid for 2024 was €4,400.
○ Dividend income from shares that Ava owns in an Irish company of €160 was
received on 2 February 2024 (final dividend for the financial year ended 31 December 2023).
○ Irish deposit interest from the couple’s savings account in 2024 was €900 (net).
Details of other expenditures for 2024 are as follows:

● Medical expenses €4,000, including €1,000 for physiotherapy for Ava following a
car accident during the year and routine dental work costing the family €120.

● The couple were reimbursed €1,200 by their medical insurance company.
Requirement: Compute the income tax liability for both Peter and Ava for 2024.

Final Report How-To Guide

CAPITAL GAINS TAX

Peter and Ava made the following disposals of assets during 2024:

(i) In May 2024, she sold an antique painting for €2,150 having purchased it in July
1999 for €1,400. She paid €2,000 in March 2001 for professional restoration and
refurbishment work on the painting.

(ii) In September 2024, she sold her home in Galway to her sister for €250,000. The
market value of the house at the date of disposal was €320,000. Ava had acquired the house by way of inheritance from her uncle in September 1991 when the market value was €118,000. She lived in the house until September 2011, at which time she was transferred to the Dublin office by his employer. She moved back into the house in late August 2019 and remained living there until the date of the sale.

(iii) In July 2024, Peter sold 4 acres out of his 10-acre site for €50,000. The site had
originally cost €30,000 in November 1997. The market value of the remaining 6 acres at the date of disposal was €40,000.

(iv) In March 2024 Peter sold a painting for €12,800. Ava gifted the painting to Peter
in June 2009 for their 10th wedding anniversary. The market value at that date was €6,800. Ava bought the painting in June 2001 for €4,000 from an art dealer she met while on holiday in Rome.

Requirement:

Compute the Capital Gains Tax liability for both Peter and Ava for 2024 AND discuss the
reasoning and theoretical concepts to support your answer for each part referenced (i) to
(iv)

CASE STUDY 2

Please note that Case Study 2 has two parts, Part A and Part B. If you choose to use
this case study as part of your assessment, you will have to include Parts A and B.

PART A – PADDY:

Paddy died suddenly on 20 January 2024 and his estate was valued at € 755,000. Paddy
left €405,000 to his mother Mary, €100,000 to his sister Pauline (to be received free of
tax) and the remainder of the estate to his son Joe (age 12) towards his reasonable
support, maintenance, and education.

In December 2020, Paddy inherited a property with a taxable value of € 375,000 from the
estate of his father, David. In December 2019, Joe inherited € 250,000 on the death of his mother.

Final Report How-To Guide No prior gifts or inheritances have been received by either Mary or Pauline.

Requirement:

Calculate the Capital Acquisitions Tax due for Mary, Pauline and Joe as a result of Paddy’s
death, on the basis that any available reliefs are claimed. Clearly explain the reasoning behind your approach and all calculations.

PART B – HELEN:

Helen died on 31 July 2024 and made the following provisions in her will: To her son Marcus
A holiday home in Galway, Ireland with a market value of €275,000. Marcus has previously
received the following benefits:

● 30 November 1990 a gift from his mother Helen of €42,000.
● 17 October 1999 a gift from a friend of €30,000.
● 21 April 2004 an inheritance from his father of €200,000.

To her son-in-law Walter

An investment property in Dublin. The investment property had a market value of
€400,000 subject to a mortgage of €150,000. In accordance with the terms of the will
Walter agreed to take over the mortgage. Walter is the husband of Helen’s deceased
daughter Nora. Walter previously received an inheritance from his father in 1999 of
€120,000.

Requirement:

Calculate the Capital Acquisitions Tax for both Marcus and Walter, on the basis that any
available reliefs are claimed. Clearly explain the reasoning behind your approach and all
calculations.

CASE STUDY 3 – JESS:

Jess Burke is a well-established retailer of home furniture in Kildare and had the following
sales and purchases for May / June 2024. Jess accounts for VAT on the cash receipts basis.

Sales

Invoices issued €135,000
Cash received €190,000
Sales to other VAT registered business in the EU €37,000

Expenses

Purchase of furniture from Irish businesses €15,000
Purchase of Category B motor car using 70% business use €12,000
Purchase of Petrol €1,000
Client entertainment (Note 2) €3,000

Final Report How-To Guide

Legal fees (Note 3) €4,000
Hotel costs for food and drink for various sta� meetings €1,500
Electricity €2,500
Purchase of Computer from Germany for Business use €5,000

Note 1: All sales are INCLUSIVE of VAT while all purchases are EXCLUSIVE of VAT.
Note 2: The client entertainment resulted in a 20% increase in sales.
Note 3: Jess received an invoice for the legal fees in June but did not pay the invoice until
July.

Requirement:

Calculate the VAT liability for Jess Burke for May/ June 2024.

Additional Guidance

Evidence of wider reading will greatly enhance your evaluation and analysis throughout.
Any quotes from external sources should be properly referenced. Choose a referencing
style and use it consistently. Poor referencing may affect your grade, and lack of
referencing makes the integrity of your entire assessment questionable. We recommend
that you use the Harvard Referencing Style, which is well documented in the UCD Library
pages: https://libguides.ucd.ie/harvardstyle.

How You Will Be Assessed

The following rubric describes how the essay will be assesse