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:

● 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 expenditure 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.

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 o�ce by his employer. She moved back into the house in late August 2019 and remained living there until the date of 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.

No prior gifts or inheritances has 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

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.

Answers to Above Questions on Irish Tax System

Answer 1: 

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