Revenue Note for Guidance

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Revenue Note for Guidance

Section 32 As to sale of an annuity or right not before in existence

If the sale of an annuity or other right which did not previously exist is effected by actual grant or conveyance then that grant or conveyance is a conveyance on sale for the purposes of the Stamp Duties Consolidation Act, 1999. However, if the annuity or other right which did not previously exist is merely secured by a bond or other instrument then that bond or other instrument is deemed to be a conveyance on sale.

An annuity is a payment which is made yearly or for a fraction of a year e.g. monthly, quarterly. The “right” must be one which is capable of being completed by grant or conveyance i.e. it must be a property right. The terms of the annuity or the right must be secured i.e. set out in an instrument.

Example 1

A agrees to pay B an annuity of €10,000 during B’s lifetime in consideration of a lump sum payment by B to him of €80,000. The instrument creating the annuity is chargeable as a “conveyance on sale” and the stampable consideration is €80,000. The rate of duty is 2%.

Example 2

A enters into a written covenant with B not to open his shop before 9 a.m. any day for the next 2 years in consideration of which B pays A €10,000. As the “right” cannot be completed by grant or conveyance the covenant does not fall within this section.

Relevant Date: Finance Act 2014