SCHEDULE 1 - Stamp Duties on Instruments

Overview

This schedule lists in alphabetical order the various instruments which are within the charge to stamp duty if they are executed in the State, or no matter where they are executed, if they relate to Irish property or to matters or things done or to be done in the State (see section 2(1)). Readers are reminded that in determining the liability of an instrument to duty regard is had to what the instrument does rather than the name the parties to it give to it.

AGREEMENT for a Lease, or for any letting.

Certain agreements for a lease or for a letting are chargeable to stamp duty as if they were an actual lease - see section 50.

AGREEMENT for sale of property.

Certain contracts or agreements for the sale of property are chargeable to stamp duty as if they were an actual conveyance or transfer on sale of the property - see sections 31 and 36.

ANNUITY.

• Section 32 applies to the purchase of an annuity.
• Where there is a conveyance in consideration of an annuity section 42 applies.

ASSIGNMENT.

These instruments are chargeable as conveyances on sale e.g. assignment on sale of a leasehold interest, assignment on sale of a policy of insurance.

ASSURANCE.

“Insurance” includes “assurance” - see definition of “policy of insurance” in section 1.

BILL OF EXCHANGE.

“Bill of exchange” is defined in section 1. See also sections 23, 25 and 27 and the exemptions contained in this head of charge.

The head of charge applies to instruments i.e. cheques, drafts or orders which are drawn (i.e. written) on an account in the State.

BILL OF SALE.

See Part 7.

This head of charge relates only to goods. In the normal course goods are transferred by delivery i.e. no instrument is required to transfer title to goods from one person to another.

An absolute bill of sale transfers title to goods without delivery and is chargeable to stamp duty as if it were a conveyance on sale.

Bills of sale must be registered. There is an obligation on the registrar to ensure that they are duly stamped before registration and anyone registering a bill of sale which is chargeable to stamp duty but not duly stamped is liable to a penalty (see section 129).

Bills of sale are governed by The Bills of Sale (Ireland) Act, 1879, and The Bills of Sale (Ireland) Act (1879) Amendment Act, 1883. These Acts only apply in limited circumstances: they do not apply where possession of the goods is intended to be given i.e. where there is delivery. Taxi plates and tour buses are a typical example of the type of goods the sale or mortgage of which are governed by these Acts.

BOND in relation to any annuity on the original creation and sale of that annuity.

A bond is a promise under seal. See section 32.

CHEQUE.

The definition of “bill of exchange” in section 1 includes cheques. Cheques are, therefore, chargeable to stamp duty under the “BILL OF EXCHANGE” head of charge.

CONTRACT.

Certain contracts or agreements for the sale of property are chargeable to stamp duty as if they were an actual conveyance or transfer on sale of the property - see sections 31 and 36.

CONVEYANCE or TRANSFER on sale.

Definition of “conveyance on sale”

“Conveyance on sale” is defined in section 1 as including—

• every instrument (see section 1), and
• every decree or order (including a decree or order for, or having the effect of an order for, foreclosure) of any court or of any commissioners,
• whereby—
  • any property, or
  • any estate or interest in any property,
• on the sale or compulsory acquisition of that property or that estate or interest,
• is transferred to or vested in,
• a purchaser, or any other person on such purchaser’s behalf or by such purchaser’s direction.

“Property” is anything which can be bought and sold. It includes real property (i.e. land and buildings) and personal property e.g. goods. An “estate in property” includes a freehold estate (e.g. fee simple, life estate) and a leasehold estate. An “interest in property” includes—

• easements (i.e. rights over the property of another) such as rights of way and rights in respect of water, light or air,
• profits à prendre (i.e. rights to take something off the land of another) such as a right to fell timber, shooting rights or fishing rights, and
• rentcharges (e.g. A charges her land with a payment of €1,000 p.a. to B).

It is not necessary that the property be transferred to the purchaser - it could, for example, be transferred to a nominee or to a sub-purchaser.

Provisions relating to conveyances on sale

See Chapter 2 of Part 5. See also Parts 6 and 7 which contain reliefs and exemptions from the charge.

Heads of charge

There are 3 “CONVEYANCE or TRANSFER on sale” heads of charge in Schedule 1:

• CONVEYANCE or TRANSFER on sale of any stocks or marketable securities.

“Stock” and “marketable security” are defined in section 1. There is an exemption from the 1% duty on stock transfer forms executed on or after 24 December 2008 where the consideration paid is €1,000 or less. In the case of a gift, the value of the stocks or marketable securities is substituted for the consideration. In addition to the reliefs and exemptions contained in Parts 6 and 7 the transfer of certain foreign loan securities is specifically exempted from stamp duty under this head of charge.

• CONVEYANCE or TRANSFER on sale of a policy of insurance or a policy of life insurance where the risk to which the policy relates is located in the State.
  
  “policy of insurance” and “policy of life insurance” are defined in section 1. Section 62 contains the rules for determining the location of risk. See also section 130.
  
  The creation of a policy of insurance is chargeable to stamp duty under the “POLICY OF INSURANCE other than Life Insurance where the risk to which the policy relates is located in the State.” head of charge. The stamp duty charge in respect of life assurance policies taken out or varied on or after 1 January 2001 has been abolished. This head of charge catches the assignment of an existing policy of insurance or life insurance.
  
  If a policy is assigned by way of voluntary disposition inter vivos and it has a surrender value the duty is 0.1% of the surrender value. If, however, there is no surrender value no duty is chargeable under this head of charge.

• CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance.
  
  This head of charge is considered under the following headings:
  • Consideration,
  • Rate of Duty,
  • Mixed Property,
  • Consanguinity Relief,
  • Instruments to which this head of charge applies,
  • Deemed Conveyances on Sale, and
  • Stamps Required.

1. Consideration

Stamp duty is chargeable on the amount of the consideration if the consideration is solely Irish money. If the consideration is expressed in a foreign currency or if it consists of stocks or marketable securities or debts (see sections 9, 40 and 41, respectively) with or without any money consideration then stamp duty is chargeable on the value of the consideration.

The consideration is the actual consideration and not the consideration recited in the instrument if that consideration differs from the actual consideration.

Where the transfer is by way of voluntary disposition inter vivos stamp duty is chargeable on the market value of the property transferred (see section 30).

Special provisions apply where—

• the conveyance on sale is combined with a building agreement for a dwellinghouse or apartment (see section 29),
• the conveyance on sale is an order for foreclosure (see section 39),
• the consideration is payable periodically (see section 42),
• part of the consideration consists of covenants to improve the property being transferred (see section 43),
• the consideration cannot be ascertained (see section 44),
• the consideration has to be apportioned (see section 45),
• there are sub-sale arrangements (see section 46),
• there is more than one instrument of conveyance or transfer (see section 47), and
• valued-added tax is included in the consideration (see section 48).

2. Rate of Duty

Larger transaction or series of transactions

Because the duty applicable to a particular instrument in the case of residential property depends on the amount or value of the consideration paid - the greater the amount or value of the consideration the higher the duty applicable - a stamp duty liability could easily be reduced or avoided by the simple expedient of breaking what is in effect one transaction into a number of smaller transactions. To ensure that this does not happen this head of charge provides that the lower rate of duty of 1% only applies to the first €1,000,000 of the consideration where the transaction being effected by that instrument does not form part of a larger transaction or of a series of transactions. Where the transaction does form part of a larger transaction or series of transactions the duty which will then apply will be based on the aggregate amount or value of the consideration.

Determination as to whether a transaction is part of a larger transaction or series of transactions

It is often difficult to decide whether a particular transaction is part of a larger transaction or series of transactions. The rule is that there must be some form of interdependence involved (e.g. default by the purchaser on one purchase would enable the vendor to pull out of all the purchases) but this interdependence need not be contractual (e.g. the purchaser gets a lower price by virtue of agreeing to buy 2 properties rather than one). Generally, in the case of sales by private treaty where there are a number of sales between 2 parties at or about the same time, irrespective of whether there is a single contract or several contracts, there is a strong presumption that each individual conveyance must form part of a larger transaction or series of transactions. Sales at auction, on the other hand, where the property is sold in separate lots are regarded as separate transactions.

Exchanges of property

Where property is exchanged (see section 37) each conveyance or transfer comprised in the exchange is regarded as a separate transaction i.e. it is not regarded as part of a larger transaction or series of transactions.

Apportionment of consideration

Where consideration has to be apportioned a higher duty may apply in the case of residential property – see examples in section 45(1), (2) and (3).

3. Mixed Property

In a mixed property situation, the residential part is not aggregated with the non-residential part for the purposes of determining the stamp duty (see head of charge and section 7(c)). A mixed property includes a property part of which is residential and part of which is non-residential (e.g. living quarters over a shop) or 2 properties one of which is residential and the other non-residential (e.g. a shop and a house).

4. Consanguinity Relief

Transfers of non-residential property between certain blood relatives qualify for a reduced rate of stamp duty up to 31 December 2014. The reduced rate is half the rate of stamp duty which would otherwise apply.

This relief is extended:

• to 31 December 2015 in respect of transfers or conveyances of farmland by a person of any age and
• from 01 January 2016 to 31 December 2017 in relation to transfers or conveyances of farmland but only where the individual transferring/conveying the farmland has not reached the age of 67 at the date of transfer/conveyance

The individual to whom the land is transferred/conveyed must farm the land or lease it for a period of not less than 6 years to someone who farms the land.

The person farming the land must do so on a commercial basis and with a view to the realisation of profits for not less than 50% of the person’s normal working time or be the holder of a qualification set out in Schedule 2, 2A or 2B to the Act.

Revenue accepts for the purpose of this relief that “normal working time” including on-farm and off-farm working time approximates to 40 hours per week. This will enable farmers with off-farm employment to qualify for the relief provided they spend a minimum average of 20 hours working per week working on the farm. Where anyone can show that their “normal working time” is somewhat less than 40 hours a week, then the 50% requirement will be applied to the actual hours worked – subject to the overriding requirement that the farm is farmed on a commercial basis and with a view to the realization of profits.

The Revenue Commissioners also accept that the relief is available where the land is leased to a partnership / to a company, where the partners / main shareholder and a working director (as appropriate) satisfy the above conditions.

Where the conditions set out above are not complied with at any time the standard rate of duty as detailed in paragraph 4 will apply together with interest and (where appropriate) penalties from the date compliance with any of the conditions ceased.

In order to qualify for the relief the following 3 conditions must be satisfied:

1. the person (or each of them if there is more than one) becoming beneficially entitled to the property transferred must be related to the person (or each of them if there is more than one) previously so entitled in one of the following ways i.e. as a—
   1. lineal descendant (child, grandchild, etc.),
   2. parent,
   3. grandparent,
   4. step-parent,
   5. husband (see also section 96),
   6. wife (see also section 96),
   7. brother of a parent (uncle),
   8. sister of a parent (aunt),
   9. brother,
   10. sister,
   11. lineal descendant of a parent (step-brother or step-sister),
   12. lineal descendant of a husband (step-child),
   13. lineal descendant of a wife (step-child),
   14. lineal descendant of a brother (nephew or niece),
   15. lineal descendant of a sister (nephew or niece),
   16. civil partner (see also section 96),
   17. civil partner of a parent, or
   18. lineal descendant of a civil partner.

For the purposes of stamp duties chargeable on conveyances or transfers of land—

• section 27 of the Adoption Act, 1952, provides that an adopted person is considered to be the child of the adopter(s) and not the child of any other person,
• section 45 of the Finance Act, 1972, as amended by section 214 of the Finance Act, 1992, provides that a child adopted under a foreign adoption law is deemed to be related to any other person as if s/he were a child of the adopter(s) and not the child of any other person,
• section 39 of the Finance Act, 1960, provides that a person who was 21 years of age or more on 1 January, 1953, and who proves to the satisfaction of the Revenue Commissioners that from the age of 7 years or earlier s/he was cared for and maintained at their own expense, during the period defined by that Act, by a married couple other than his or her parents (if s/he was born to his parents in lawful wedlock) is considered to be a child of that couple and not the child of any other person.

With effect for all instruments executed on or after 14 January, 1988, section 74 of the Finance Act, 1988 (now section 8 of the Taxes Consolidation Act, 1997) provides that any relationship between persons is to be construed in accordance with section 3 of the Status of Children Act, 1987. Section 3 provides that the relationship between every person and his father or mother (or either of them) will, unless the contrary intention appears, be determined irrespective of whether his father or mother are or have been married to each other, and all other relationships will be determined accordingly. Section 3 also protects the position of an adopted person by deeming him or her to be, from the date of the adoption, the child of the adopter or adopters and not the child of any other person or persons;

For conveyances or transfers of land, executed on or after 31 March 2006, “lineal descendant” includes a foster child. A foster child is a person, being a transferee, who, prior to the date of execution of the instrument in respect of which relief from duty is claimed, has resided with, was under the care of and was maintained at the expense of the transferor throughout—

• a period of 5 years, or
• periods which together comprised at least 5 years,

prior to that person reaching 18 years of age but only if the claim for relief is not based on the uncorroborated testimony of one witness (see definition of “lineal descendant” in section 1).

2. Each of the transferees must be related to each of the transferors.

3. Consanguinity relief does not apply to sub-sales - see section 46(5).

5. Instruments to which this head of charge applies

In addition to the deemed conveyances on sale (see 6. below) examples of other instruments which are chargeable under this head of charge if they are on sale are as follows:

• an assignment of a leasehold interest,
• surrender of a lease by a tenant to his or her landlord where the landlord pays the tenant to accept the surrender,
• a declaration of trust by a vendor in favour of a purchaser,
• an assent in favour of a purchaser,
• a conveyance of property by the executors of a will in discharge of a pecuniary legacy,
• instruments creating an interest in property,
• release by life tenant of his or her life interest to the remainderman,
• release by remainderman of his or her remainder interest to life tenant,
• release of a rentcharge (e.g. A charges her land with a payment of €1,000 p.a. to B),
• appointment under a general power of appointment,
• demise by tenant of the whole of the term of his or her lease,
• payment of a sum of money in consideration of the release of an annuity.

6. Deemed Conveyances on Sale

Certain instruments are chargeable to stamp duty as if they were conveyances on sale - see sections 30 to 38.

7. Stamps Required

In addition to money stamps the instrument may also need to be impressed with a denoting stamp (see section 11).

COUNTERPART.

These instruments are chargeable under the “DUPLICATE or COUNTERPART of any instrument chargeable with any duty” head of charge.

COVENANT in relation to any annuity on the original creation and sale of that annuity.

A covenant is a promise under seal. See section 32.

DRAFT for money.

The definition of “bill of exchange” in section 1 includes drafts. Drafts are, therefore, chargeable to stamp duty under the “BILL OF EXCHANGE” head of charge.

DUPLICATE or COUNTERPART of any instrument chargeable with any duty.

See section 13. If the original instrument is not chargeable with stamp duty (i.e. it does not come within the charge or it is exempt or relieved from duty) then the duplicate or counterpart is not liable either. A duplicate or counterpart must be impressed with a denoting stamp (see section 11).

Duplicates and counterparts are liable to a fixed duty of €12.50. However, if the amount of ad valorem duty chargeable on the original instrument is less than €12.50 the amount of duty to which the duplicate or counterpart is liable is limited to the amount of duty paid on the original.

EXCHANGE.

See section 37. An exchange of stocks or marketable securities for other stocks or marketable securities is a conveyance on sale (see section 40).

INSURANCE.

These instruments are chargeable under the “POLICY, etc.” head of charge.

LEASE.

Provisions relating to leases

See Chapter 4 of Part 5 and Part 7.

Meaning of “lease”, “rent”, “premium” and “indefinite”

“Lease” is not defined but essentially it means that the tenant must get exclusive possession of the property. Neither is “rent” or “premium” defined. Basically “rent” means the sum paid for the exclusive use of the land while the “premium” is a sum of money other than rent paid for the granting of a lease. Payments such as service charges (e.g. charges in respect of electricity, up-keep of common areas) are not rent unless expressly stated in the lease to be recoverable as rent. “Indefinite” means periodical e.g. weekly, monthly, yearly.

Instruments within the charge

This head of charge deals only with the creation of a lease of immovable property or rights relating to such property. Leases of movable property such as motor cars or machinery are not liable to stamp duty. Where the lease is of a dwellinghouse for a period not exceeding 35 years or for an indefinite term and the rent does not exceed €30,000 p.a. (€19,050 p.a. for instruments executed before 13 March 2008) that lease is exempt from stamp duty (see paragraph (1)).

Stamp duty is chargeable both on the rent and on any premium (or fine) payable (see section 7(b)).

Calculation of duty on rent

In the case of rent duty is chargeable on the annual average rent. The rate of duty applicable is dependent on the term of the lease.

Example 1

A lease is granted for a term of 20 years. The rent for the first 10 years is set at €30,000 p.a., for the next 5 at €40,000 p.a. and for the balance at €45,000 p.a.

10 years x €30,000	=	€300,000
5 years x €40,000	=	€200,000
5 years x €45,000	=	€225,000
		€725,000

⇒ the annual average rent is €36,250 (i.e. €725,000 ÷ 20).

Example 2

A lease is granted for a term of 20 years. The rent for the first 5 years is set at €30,000 p.a. and for the next 5 years at €40,000 p.a. The rent payable in year 11 and subsequent years will be set in accordance with a rent review clause. The average annual rent is calculated on the rent and for the years as declared:

5 years x €30,000	=	€150,000
5 years x €40,000	=	€200,000
		€350,000

i.e. the average annual rent is €35,000 (i.e. €350,000 ÷ 10).

Rent payable in advance is chargeable as rent and not as a premium.

A lease for a definite term of less than a year bears the same rate of duty as a lease for a year i.e. 1%.

Calculation of duty on premium

In the case of a premium the rates are similar to those set out in the “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance” head of charge (see commentary above). Consanguinity relief does not apply.

The consideration for stamp duty purposes is consideration which consists of money, stock or security (see paragraph (3) of head of charge) or the value of any produce or goods (see section 51) which forms part of the consideration.

Rent review clause

A rent review clause is chargeable under paragraph (5). However, if the Revenue Commissioners are not satisfied about the genuineness of the rent expressed in the lease and how the rent review clause is expressed to operate they may invoke section 55.

Option to renew

A lease with an option to renew is chargeable only in relation to the original specified term.

Stamps Required

In addition to money stamps the instrument may also need to be impressed with a denoting stamp (see section 11)

ORDER for the payment of money.

The definition of “bill of exchange” in section 1 includes orders for the payment of money and, consequently, such orders are chargeable under the “BILL OF EXCHANGE” head of charge.

PARTITION or DIVISION.

See section 38.

POLICY OF INSURANCE other than Life Insurance where the risk to which the policy relates is located in the State.

See sections 59, 61 and 62 and Part 7.

RELEASE or RENUNCIATION of any property, or of any right or interest in any property.

See section 63.

If the effect of the release is to convey property, or any right or interest in property, to another person then the release is chargeable as a conveyance. If the release is on sale then it is chargeable as a conveyance on sale.

SHARE WARRANT issued under the provisions of the Companies Act, 1963, and STOCK CERTIFICATE TO BEARER, and any instrument to bearer issued by or on behalf of any company or body of persons formed or established in the State and having a like effect as such a share warrant or such a stock certificate to bearer, expressed in the currency of the State.

See section 64, 65 and 66 and Part 7.

Section 95 of the Companies Act, 1963, provides that the re-issue of a debenture or the issue of another debenture in its place is to be treated as the issue of a new debenture for the purposes of stamp duty.

SURRENDER of any property, or of any right or interest in any property.

See section 67.

If the effect of the surrender is to convey property, or any right or interest in property, to another person then the surrender is chargeable as a conveyance. If the surrender is on sale then it is chargeable as a conveyance on sale.

TRANSFER.

These instruments are chargeable under the “CONVEYANCE or TRANSFER” heads of charge.

Relevant Date: Finance Act 2014