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2013 Finance Act – Part 10 – Irish Tax System



This is the final post in a ten-part Worldwide Tax Blog Series.  Due to the amount of changes it is not possible to detail each individual provision so I decided to focus on a cross section of amendments to give a general overview.  The legislative provisions I have selected will have an affect on most if not all Irish individuals whether resident and domiciled or resident and non-domiciled; employed or unemployed; retired or still working; self employed or PAYE workers; corporate structures or individuals, etc.

Finance Act 2013 contains the legislative provisions for a number of changes to the Irish tax system under all the main tax heads including Income Tax, Corporation Tax, Capital Gains Tax, Excise, Value Added Tax, Stamp Duty and Capital Acquisitions Tax.

Universal Social Charge – Part 1

The Remittance Basis for Income Tax – Part 2

The Remittance Basis for Capital Gains Tax – Part 3

Taxation of Certain Social Welfare Benefits – Part 4

Mortgage Interest Relief – Part 5

Donations To Approved Bodies – Part 6

Farm Restructuring Relief – Part 7

FATCA – The US Foreign Account Tax Compliance Act – Part 8

Close Company Surcharge – Part 9

Stamp Duty – Part 10

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10. STAMP DUTY

Finance Act 2013 introduced anti-avoidance measures to target “resting in contract” and other structures used in relation to certain land transactions.

The main points are as follows:

1.  Where a contract or agreement for the sale of land or an interest in land is entered into where (1) 25% or more of the consideration is paid under the contract or agreement and (2) an electronic or paper return along with the relevant stamp duty payable hasn’t been filed and paid within thirty days then the contract or agreement is chargeable to stamp duty as if it were a conveyance or transfer of interest in the land.
2.  Where stamp duty is paid on a contract and a conveyance is ultimately completed there is a provision for crediting the stamp duty paid on the contract against any stamp duty that would be payable on the conveyance.  The conveyance must be made “in conformity with the contract.”
3.  If the contract or agreement is rescinded or annulled, the stamp duty will be returned provided this is shown to the satisfaction of the Revenue.
4.  There are no exclusions from the charge for tax incentive properties.
5.  Where a landowner (1) enters into an agreement with another person that allows that individual to enter onto the land to carry out developments on the land and (2) 25% or more of the market value of the land is paid to the landowner other than as consideration for the sale or all or part of the land, then the agreement is chargeable with stamp duty as if it were a conveyance.
6.  An agreement for land leases exceeding thirty five years will be stampable as if they were actual leases made for the term and consideration mentioned in the lease agreements where 25% or more of the consideration specified in the agreement for lease has been paid.
7.  This legislation is applicable to all instruments executed on or after 13th February 2013 with the exception of instruments executed solely “in pursuance of a binding contract or agreement entered into before 13th February 2013.”
8.  Where the agreement for lease has been stamped, stamp duty on the lease will be limited to €12.50.

What is meant by developments?

1.  The construction, demolition, extension, alteration or reconstruction or any building on the land or
2.  Any engineering or other operation in, on, over or under the land to adapt it for materially altered use.

CONCLUSION

This has been a very comprehensive Finance Act with many far reaching amendments. Over the next few weeks I will be focusing on areas significantly affected by the 2013 Finance Act as they deserve more detailed explanations to properly outline the changes to the Irish tax system.

 

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Since founding Accounts Advice Centre in Dublin in 1996, Claire McNamara has established a reputation for successfully advising businesses, corporate and personal tax clients. Her knowledge spans various sectors and her experience includes corporate transactions, inheritance tax planning, International Tax Treaties, personal tax as well as advising on issues affecting non domiciled individuals and offshore clients. She constantly delivers a value added service and efficient tax management solutions to high net worth private clients, property owners, executives, entrepreneurs, entertainers and members of various professions.

As a Chartered Tax Adviser, Claire has considerable experience in professional practice and will personally help you to deal with all your tax affairs competently, professionally and successfully. She has also lectured extensively in taxation on courses for the main professional accountancy qualifications including A.C.C.A., A.C.A. and C.P.A. and is actively involved in preparing students for the Irish Tax Institute’s CTA qualification.

Claire has effectively handled a number of Revenue Audits and Appeals on behalf of her diverse client base and has successfully negotiated solutions resulting in substantial differences to the eventual tax liability, surcharge and penalties.

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4 thoughts on “2013 Finance Act – Part 10 – Irish Tax System

  1. […] 2013 Finance Act – Part 7 – Irish Tax System This is a ten-part Worldwide Tax Blog Series on a cross section of amendments in the Irish Tax System and a general overview: Universal Social Charge – Part 1 The Remittance Basis for Income Tax – Part 2 The Remittance Basis for Capital Gains Tax – Part 3 Taxation of Certain Social Welfare Benefits – Part 4 Mortgage Interest Relief – Part 5 Donations To Approved Bodies – Part 6 Farm Restructuring Relief – Part 7 FATCA – The US Foreign Account Tax Compliance Act – Part 8 Close Company Surcharge – Part 9 Stamp Duty – Part 10 […]

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