The 1995 stub period reserve rules deny a reserve in the year of emigration and the immediately preceding year. From discussions between Revenue and Finance, it seems that the lookback aspect of the rule was based on a misperception that a year-end was triggered for emigrating individuals, not just emigrating corporations and trusts. As a result, Revenue will administratively allow emigrating taxpayers to claim the reserve for the year preceding emigration, even if the taxpayer emigrated before the prior year's return was filed.
Revenue still requires the income inclusion of the reserve balance in the year of emigration.
If the taxpayer fails to file for that year, it is expected that Revenue will reassess and deny the reserve for the prior year.