Revenue Note for Guidance

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Revenue Note for Guidance

Section 85 Certain loan capital and securities

This section contains a number of exemptions from stamp duty.

Details

(1) Section (1) contains the definition of “loan capital”.

(1A) Section (1A) contains the definition of an “enhanced equipment trust certificate” which means loan capital issued by a company to raise finance to acquire, develop or lease aircraft.

(2)(A) Subsection (2)(a)(i) grants an exemption from stamp duty on the issue of Government loans and Subsection (2)(a)(ii) grants an exemption from stamp duty on the issue of loan capital. Both the exemption in subsection (2)(a)(i) and (ii) apply regardless of the form - bearer and non-bearer - in which the loan capital or loans are issued.

(2)(b) The transfer of loan capital of a company or other body corporate which—

  • (2)(b)(i) is not convertible to Irish registered shares;
  • (2)(b)(ii) is not convertible to other loan capital having a right of conversion to Irish-registered shares;
  • (2)(b)(iv) is issued for a price which is not less than 90% of its nominal value, and
  • (2)(b)(v) is not linked, wholly or partly, and directly or indirectly, to an equity index or equity indices. For transfers of loan capital made before 13 March 2008 the condition was that it was not linked to stock exchange or inflation indices (e.g. the ISEQ index, the Consumer Price Index: however, benchmarks used to set interest rates such as Dibor - the Dublin inter-bank offer rate - were not, in the Revenue Commissioner’s view, indices within the meaning of this section),

is exempt.

(2)(c) Where the loan capital comprises securities issued by a qualifying company (as defined in section 110 of the Taxes Consolidation Act, 1997) as part of certain schemes of securitisation subsection (2)(c) provides that the issue or transfer of these securities is exempt from stamp duty and exemption is not subject to the conditions set out in subsection (2)(b). Securitisation of mortgages operates typically by a bank or building society transferring its portfolio of mortgages to another company for cash. The transferee company raises this cash by issuing bonds to the public who receive a stream of interest payments over time and have a readily marketable security. The bank benefits by having more funds to lend for further mortgages.

(2)(d) The issue, transfer or redemption of an enhanced equipment trust certificate is not chargeable to stamp duty.

Relevant Date: Finance Act 2014