Replacing the letter of no audit

Revenue has published a Tax & Duty Manual (“TDM”) dealing with legal personal representatives (“LPRs”) obtaining clearance to distribute the estate after the death of a taxpayer which replaces the requirement to obtain a letter of no audit from Revenue in each case.

In short, where the LPR has carried out due diligence on the deceased and makes a complete and accurate submission to Revenue prior to notifying Revenue of their intention to distribute the estate, Revenue has 35 working days in which to address whether income tax and CGT for the pre death and estate administration period will be queried or audited. It should be noted that Revenue will require a return to be submitted for the year of the death of the taxpayer in all cases. “Due diligence” requires that the previous ten years of activity by the deceased taxpayer be reviewed prior to submission. While this may place a considerable burden on LPRs and their professional advisors, particularly where the LPR is not familiar with the deceased’s tax and financial affairs pre death, it is something that Revenue has insisted on to ensure complete disclosure is made.

If Revenue does not reply within 35 working days, the LPR may proceed to distribute the estate. If on subsequent review a liability arises, such liability will not be sought from the LPR. This is a similar procedure to that provided for when notifying of Revenue prior to distributing to a foreign beneficiary in their TDM  Part 02 The Statement of Affairs (Probate) and is welcomed as a mechanism to allow the estate be finalised in a timely manner.

This TDM came about as a result of the diligent work on behalf of the profession and the clients we serve over a long period of time by the solicitor members of the TALC Direct Committee. While not every issue raised by solicitor members was taken on board to the extent desired, this is an improvement on the unsatisfactory regime that it replaces where practitioners had concerns with the timing of the issuance of letters of no audit.

Practitioners are advised to read the TDM in detail before advising clients on the appropriateness of availing of same.