Practitioners should be aware of the updates to Section 80 Finance (No. 2) Act 2023 (amending section 46 Capital Acquisitions Tax (Consolidation) Act 2003 (CATCA03)).

With effect from 1 January 2024, practitioners should be aware that certain loans,

• taken from specified family members such as from the beneficiary’s parents, civil partners, lineal ancestors or descendants, siblings, aunts and uncles and siblings of the civil partner of a parent; and/or

• between the beneficiary and a specified family member’s company or vice versa;

will be reportable for CAT under a return to be filed by the beneficiary. These are loans that exceed €335,000 (in aggregate of all these loans) on at least one day in the relevant calendar year where there is a free use element to such loans, such that a gift has been taken under section 40(2) CATCA03 (the free use section).

In effect, this captures any such loan that is interest free, at a reduced interest rate or where no interest has in fact been paid before six months after the end of the calendar year in which the loan was in existence. The reporting in accordance with the new legislation must take place in the usual manner (the free use element is deemed to be a gift taken) at 31 December if, by the following 30 June, there has been no payment of sufficient interest and the reporting for this must take place on or before the following 31 October.