Ireland's leading tax advisers discuss their clients' main concerns over the past year in the September/October edition of Business Plus magazine. Suzanne O'Neill, Tax Partner, and Brian Kelly, Tax Director, share their insights on the tax issues top of mind for RSM's mid-market clients.
As seen in Business Plus magazine, September 2021
Our team is enjoying remote working and, post-pandemic, we are committed to hybrid working in the long term. Our firm has evolved since joining the RSM network. Today, 47% of our clients are globally active companies, and our goal is to be advisers of choice to middle-market leaders in Ireland. We have focused on rethinking the role of a partner. It’s 50% about client service excellence and 50% about delivering the talent experience. That has greatly assisted in making remote working successful.
Over the course of this year, we have seen clients moving away from Brexit-related concerns as companies get to grips with the new scenario. We now find them moving on issues such as the OECD global minimum corporation tax rate, the upcoming introduction of the Interest Limitation Rules, and the transfer-pricing changes from last year’s Budget.
Government should be mindful of the sectors hardest hit by the pandemic and consider a more focused extension of the tax debt-warehousing arrangements. Businesses that have availed of this scheme will have to plan their cash flows out from 2022/23 onwards. It will be important that any repayment plan is realistic and that the agreed payment dates and amounts are met.
The tax reliefs that support the transfer of family businesses are generous, in principle. The issue is within the detailed complexity, which can negate the value of the reliefs, such as investment assets held within the trading company or sizeable cash on the balance sheet, which possibly do not reflect the nature of a modern business of scale.
Retirement Relief on a sale to a third party (or, indeed, a liquidation on retirement) is only suitable for a small business with consideration not substantially exceeding €750,000. Where the value of a company exceeds this level, it may be possible to reduce the value of the business to avail of the relief by factoring in pension planning or rectifying circumstances where a spouse may be involved in the business, but not a shareholder. It is worth having a conversation around exit planning at least 10 years before the planned exit date.