Revenue Note for Guidance

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Revenue Note for Guidance

Section 44 Procedure to apply where consideration, etc., cannot be ascertained

Stamp duty is chargeable on sales of property by reference to the amount of the consideration paid.

(1) This section provides that where the consideration for a sale of property cannot be ascertained, and the transfer would otherwise attract duty by reference to the amount of the consideration, duty is to be charged by reference to the value of the property. In other words, the Revenue Commissioners can rely on the value of the property where the consideration cannot be ascertained.

Example

A owns and manages a successful company. B offers to buy A out on terms that the consideration for A’s share is to be linked to the performance of the company in the following 5 years, during which A is to continue as manager. The consideration is expressed in terms of a formula related to after-tax profits. Had this section not been enacted the Revenue Commissioners would not have been able to charge ad valorem duty on the share transfer because the consideration was unascertainable. As a result of this section the Revenue Commissioners can charge duty on the value of the shares being transferred.

(2) This section does not apply to cases covered by section 29(4)(a). Section 29(4)(a) provides for a method of calculating duty on certain new houses or apartments where the price of the building work cannot be ascertained (the section provides for a multiple of 10 to be applied to the site value in such cases).

This section over-turns the contingency principle in so far as it related to conveyances on sale.

Relevant Date: Finance Act 2014