PART 7 EXEMPTIONS AND RELIEFS FROM STAMP DUTY

Overview

Certain instruments are exempted from the charge to stamp duty or bear a reduced amount of duty. This Part contains details of those instruments.

Prior to the termination of the adjudication process for instruments executed on or after 7 July 2012, in order to benefit from an exemption or relief the instrument may or may not have had to be presented for adjudication to the Revenue Commissioners. For ease of reference this Part distinguished between those instruments where adjudication (see section 20) was compulsory in order to benefit from an exemption or relief - see Chapter 1 - and other instruments - see Chapter 2.

For instruments executed on or after 7 July 2012, a self-assessed stamp duty return must be filed under the e-stamping system in order to benefit from an exemption or relief provided for in Chapter 1. In the case of an exemption or relief provided for in Chapter 2 a self-assessed stamp duty return is required to be filed in respect of certain instruments which operate as a sale/voluntary disposition/lease of land. (see – Regulation 4 and Schedule 1 of the STAMP DUTY (E-STAMPING OF INSTRUMENTS AND SELF-ASSESSMENT) REGULATIONS 2012 (S.I. No. 234 of 2012)).

Exemptions and reliefs from stamp duty may be either general or specific. If the exemption or relief is general then the instrument is not liable to duty under any head of charge in Schedule 1. A specific relief or exemption, on the other hand, relates only to a particular head of charge in Schedule 1. This means that if the instrument is liable under another head of charge it will be chargeable under that other head.

In addition to the various exemptions and reliefs from stamp duty detailed in Chapter 1, paragraph (5) of 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 in Schedule 1 contains a relief for transfers of non-residential property, executed prior to I January 2015, between certain blood relatives and civil partners (i.e. consanguinity relief).

In addition to the exemptions contained in Chapter 2, exemptions from stamp duty are also to be found in—

• sections 31(3), 31B(5), 36, 39(2), 42(3), 43, 52(1), 73, 75, 75A and 146(3);
• the following heads of charge (i.e. these are specific exemptions):
  • “BILL OF EXCHANGE”,
  • “CONVEYANCE or TRANSFER on sale of any stocks or marketable securities”,
• miscellaneous Acts - see Appendix 2.

CHAPTER 1

Instruments in respect of which a self-assessed stamp duty return must be filed under the e-stamping system in order to obtain exemption or relief

Section 79 Conveyances and transfers of property between certain bodies corporate

Summary

This section grants a relief from stamp duty on certain transfers of property between Irish and/or non-Irish associated bodies corporate. While “body corporate” is not defined it would include limited and unlimited companies, foreign companies, industrial and provident societies, building societies and incorporated associations. The relief is confined to instruments chargeable as conveyances or transfers on sale or by way of gift i.e. it does not extend to leases. Where it is applicable no stamp duty is payable in respect of the particular transfer. A self-assessed stamp duty return must be filed under the e-stamping system in relation to instruments in respect of which relief is sought under this section.

Details

(1) Instruments to which the section applies will not be liable to stamp duty under or by reference to the following heads of charge in Schedule 1:

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

The following conditions must be satisfied before relief will be granted:

• (3) the instrument, in respect of which relief is sought, must convey or transfer a beneficial interest in property from one body corporate to another;
• (3) at the time of (i.e. immediately before) execution of the instrument the transferor and transferee must be associated with each other to the extent that—
  • one body corporate was the beneficial owner of not less than 90% of the ordinary share capital (previously “issued share capital” for instruments executed before 6 February 2003) of the other body corporate, or a third body corporate was the beneficial owner of not less than 90% of the ordinary share capital (previously “issued share capital” for instruments executed before 6 February 2003) of both the transferor and the transferee, and
  • (4), (8) in addition, valuable rights in relation to entitlement to dividends and entitlement to assets on a winding-up must have attached to the shares i.e.
    • one body corporate is beneficially entitled to not less than 90% of any profits available for distribution (being profits available for distribution as defined in section 414 of the Taxes Consolidation Act, 1997) to the shareholders of the other body corporate, or a third body corporate is beneficially entitled to not less than 90% of any profits available for distribution to the shareholders of the transferor and the transferee, and
    • one body corporate is beneficially entitled to not less than 90% of any assets of the other body corporate available for distribution (being assets available for distribution as defined in section 415 of the Taxes Consolidation Act, 1997) to its shareholders on a winding-up, or a third body corporate is beneficially entitled to not less than 90% of any assets available for distribution to the shareholders of the transferor and the transferee on a winding-up.
      (3), (4) Beneficial ownership or entitlement may be—
      • direct,
      • through another body corporate or other bodies corporate, or
      • partly directly and partly through another body corporate or other bodies corporate;
• (5) the instrument must not have been executed under an arrangement whereby—
  • the consideration (or any part of it) was to be provided or received directly or indirectly by an unassociated company, or
  • the beneficial interest in the property was previously conveyed or transferred by an unassociated company, or
  • the transferor or transferee were to cease to be associated.
    The scope of the expression “arrangement” includes the involvement of a non-associated company in the transaction. However, in practice, the relief will not be denied where the consideration (or any part of it) is borrowed from a financial institution as part of an independent commercial transaction;
• (2) Adjudication has been abolished for instruments executed on or after 7 July 2012 and a self-assessed stamp duty return is required to be filed under the e-stamping system to claim this relief.

(3A) “ordinary share capital” means all the issued share capital of a body corporate other than capital the holders of which have a right to a dividend at a fixed rate, but have no other right to share in the profits of the body corporate.

(7) The relief will be clawed back in any case where—

• it is subsequently found that the exemption was not properly due, or
• the transferor and transferee ceased, within 2 years of the date of the conveyance or transfer, to be associated.

(7) Where the relief is clawed back because it was granted on the basis of false information interest at the rate of 0.0219 per cent per day (see section 159D) is chargeable from the date of the conveyance to the date the stamp duty is paid. Where the transferor and transferee cease to be associated interest is payable at the rate of 0.0219 per cent per day (see section 159D) from the date they ceased to be associated to the date the stamp duty is paid.

(9) Relief will be granted to foreign bodies corporate which do not have a capital structure based on share capital provided that they have a capital structure which is equivalent to a share capital structure and also comply with all other conditions of the relief.

(10) Relief under this section is not allowed in respect of a conveyance or transfer of shares (executed on or after 31 January 2008), in a case where the preceding transfer of some or all of those shares had the benefit of an exemption from stamp duty under section 75 (relief for intermediaries) and to the extent of the consideration paid for those shares under this section that is attributable to the shares that had the benefit of the exemption under section 75.

Relevant Date: Finance Act 2014