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Revenue issues guidance for APSS trustees on Form 1 return

By October 28, 2021No Comments

APSS trustees under the same obligation to file as any other trustees

Further to the June 2021 update of the Revenue Share Schemes Manual and correspondence to individual trustees/IPSA members, Revenue has issued IPSA with further guidance on the completion of the Form 1 return by trustees of approved profit-sharing schemes (APSS).

The 2020 Form 1 must be filed by 31 October 2021 unless the trust can avail of the Revenue concession extension date of 17 November 2021.

Revenue require that the trustees of an APSS trust, like any other trustees, file an annual income tax return known as Form 1 (Trust & Estates). The Form 1 requires the trustees to declare the  income and capital gains of the trust for a tax year.

The majority of APSS trusts will have no income or gains accruing to the APSS trust itself as typically all the shares held by the trustee will have been appropriated to participants. IPSA had sought Revenue guidance, in circumstances where the APSS trust did not have income or capital gains in the tax year, as how to ensure the Forms 1 could be completed correctly to reflect a Nil return position (on the basis the Form 1 is not specifically designed for share schemes reporting).

Revenue provided the following guidance:

  • A “Nil” return can be submitted where there are no income or capital gains of the trust. However, as there is not a “Nil” filing option at present, the Form 1 should be completed as follows:
    • The Form 1 should be filed and the trustees should note that the additional line item detail of the APSS has been provided/declared on the Return of Information Form ESS1 for the tax year. It is sufficient to tick the NO box for the “Distributions and Transfers” and enter a note in the Address box (this is a free text box) that the relevant data has been submitted on the Form ESS1.
    • A recommendation has been made to update the Form1 guidance notes for next year.

IPSA has asked Revenue to consider introducing a “Nil” filing option in the Form 1 for future years. This would make completing and filing the Form 1 a lot quicker and simpler for APSS trustees.