Irish Revenue Clarifies Stamp Duty Law

by Robert Lee, Tax-News.com, London

26 January 2009

The Irish Revenue has released a statement clarifying existing exemptions on transactions of stocks or securities from stamp-duty when their value is under EUR1,000, enacted within the 2008 Finance Act.

The Finance (No.2) Act 2008, which was enacted on December 24, 2008, includes the following provision in section 87 which has been introduced in order to reduce the administrative burden on taxpayers and their agents by removing certain low yielding instruments from the stamping process.

According to the statement, any instrument executed on or after December 24, 2008 which transfers stock or marketable securities on sale where the amount or value of the consideration is EUR1,000 or less, is exempt from stamp duty. To avail of the exemption (from the maximum stamp duty charge of EUR10) the instrument must be certified as follows:

"It is hereby certified that the transaction effected by this instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to stocks or marketable securities exceeds EUR1,000."

The certificate should be inserted on the stock transfer form and signed by the transferee. Where the stock transfer form is duly certified, the form will not need to be presented to Revenue for stamping and should be forwarded directly to the company registrar (i.e. the person who maintains the share register of the company and not the Registrar of Companies).

A similar treatment will apply in relation to an instrument which operates as a gift of stocks or marketable securities with the substitution of the value of the stocks or marketable securities for the amount or value of the consideration for the sale.

Where the consideration for a particular transfer of stocks or marketable securities is EUR1,000 or less but the transfer does form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to stocks or marketable securities exceeds EUR1,000, the instrument will be chargeable to ad valorem stamp duty at 1% and must be submitted to Revenue for stamping. The same applies to a gift in similar circumstances with the substitution of the value of the stocks or marketable securities for the amount or value of the consideration for the sale.

The change does not affect electronic transfers of stocks or marketable securities. Accordingly, ad valorem stamp duty at 1% will continue to be chargeable on transfers effected in CREST regardless of the amount or value of the consideration for the sale concerned.

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