On account of the changes to Tax and Duty Manual (TDM) Part 45-01-05 made in March 2025 the Taxation Committee is updating its previously published Practice Notes Dealing with disposals of property for non-resident vendors (25 September 2018) and New process for dealing with non-resident vendor: requests for clearance to distribute sales proceeds (25 October 2022).

Under the provisions of Sections 1034, 1035 and 1043 of the Taxes Consolidation Act, 1997, a non-resident person may be assessed and charged to income tax and capital gains tax in the name of any representative of any kind including a solicitor in the State. The Taxation Committee’s standing advice to solicitors is to withhold the proceeds of sale until clearance is available from Revenue.

An online application process for clearance requests by representatives was introduced by Revenue in October 2022 to manage applications for clearance to distribute sale proceeds to non-resident vendors of disposals of land or buildings in the state. TDM 45-01-05 sets out the requirements for submission of a valid clearance request.

Disposals of property the subject of a secured charge

TDM 45-01-05 has now been updated further by Revenue in March 2025 and the Taxation Committee wishes to draw the attention of solicitors to the updated TDM and in particular to Revenue’s requirements outlined in section 4.1 relating to disposals of property the subject of a secured charge. As outlined in the TDM in relation to disposals where there are insufficient sale proceeds remaining following redemption of a secured charge to discharge the Capital Gains Tax liability, in lieu of full payment of the CGT liability, the representative will be required to include confirmation that the taxpayer has signed up to a phased payment arrangement.

Accordingly, practitioners are advised that if acting for a non-resident person who is disposing of property the subject of a secured charge they should ensure that they can satisfy in full Revenue’s requirements for submission of a valid clearance request as outlined in the updated TDM 45-01-05. The practitioner will therefore be required to ascertain at the outset of the transaction whether they will have sufficient funds to discharge the Capital Gains Tax liability allowing for redemption of the secured charge from the proceeds of sale. If funds will be insufficient to also discharge the Capital Gains Tax liability they will need to be either be put in funds to cover any deficit by their client or they will require confirmation that the client has signed up to a phased payment arrangement. The Taxation Committee advises solicitors that they ensure that they can satisfy these requirements before execution of Contracts takes place.

Disposals where the solicitor is not possessed of funds

The updated TDM 45-01-05 does not apply to voluntary disposals/disposals where the solicitor is not possessed of funds (Section 2 refers). Such disposals will require clearance from Revenue and will be dealt with by Revenue on a case-by-case basis. Accordingly, practitioners should contact Revenue at the outset of such a transaction to ascertain Revenue’s clearance requirements and before a Deed is executed.

Recommendations

The Taxation Committee recommends that solicitors obtain an irrevocable retainer and authority signed by their client at the outset of the transaction referencing the requirements set out in TDM 45-01-05 at the outset of the transaction.

The Taxation Committee recommends that if another representative of the client is submitting the application for clearance i.e. their accountant or chartered tax advisor that the solicitor should obtain confirmation in writing from said representative that (1) a complete and accurate submission was made to Revenue (2) that clearance has been granted by Revenue in accordance with TDM 45-01-05 and (3) a copy of the clearance application submitted to Revenue together with all accompanying documentation and Revenue’s reply message(s) should be requested by the solicitor for their file.

Given the potential implications for solicitors arising from the provisions of Sections 1034, 1035 and 1043 of Taxes Consolidation Act 1997, the Taxation Committee recommends that solicitors satisfy themselves at the commencement of a transaction whether a vendor is resident or non-resident. While the Law Society of Ireland Pre Contract Questionnaire for Property Sale queries whether the vendor is resident in Ireland for tax purposes, it is recommended that a Declaration from the client also be obtained. If a solicitor has any concerns in relation to the accuracy of the Declaration they can request that the client or their agent furnish them with a Certificate of Residency which can be obtained from Revenue.