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19 1973

FINANCE ACT, 1973

Chapter II

Stamp Duty on Capital Companies

Interpretation (Chapter II).

67. —In this Chapter, save where the context otherwise requires—

capital company” means—

(a) a company incorporated with limited liability, or a limited partnership formed under the law of the State or a company or partnership which is incorporated or formed in any other Member State and which, under the law of that State, corresponds to any such company or partnership, or

(b) any other company, firm, association or legal person the shares in whose capital or assets can be dealt in on a stock exchange, or

(c) any other company, firm, association or legal person operating for profit whose members have the right to dispose of their shares to third parties without prior authorisation and are responsible for the debts of the company, firm, association or legal person only to the extent of their shares;

Member State” means a Member State of the European Economic Community;

operative date” means the 1st day of August, 1973, or the date of the passing of this Act, whichever is the later;

registrar” means the registrar of companies within the meaning of the Companies Act, 1963;

stamp duty” means the stamp duty imposed by section 68 of this Act;

statement” means the statement required to be delivered under section 69 (1) of this Act;

third country” means a State which is not a Member State;

transaction” means a transaction to which section 68 (1) of this Act applies;

a reference to stamp duty paid means stamp duty paid to the Revenue Commissioners.

Charge of stamp duty.

68. —(1) This section applies to the following transactions taking place on or after the operative date—

(a) the formation of a capital company;

(b) the conversion into a capital company of a company, firm, association or legal person which is not a capital company;

(c) an increase in the capital of a capital company by the contribution of assets of any kind other than an increase in capital through capitalisation of profits or of reserves, whether temporary or permanent reserves, but including the conversion of loan stock of a capital company into share capital;

(d) an increase in the assets of a capital company by the contribution of assets of any kind in consideration, not of shares in the capital or assets of the company, but of rights of the same kind as those of members of the company such as voting rights, a share in the profits or a share in the surplus upon liquidation;

(e) the transfer from a third country to the State of the effective centre of management of a capital company whose registered office is in a third country;

(f) the transfer from a third country to the State of the registered office of a capital company whose effective centre of management is in a third country;

(g) the transfer from a Member State to the State of the effective centre of management of a capital company which is not considered to be a capital company in the other Member State;

(h) the transfer from a Member State to the State of the registered office of a capital company whose effective centre of management is in a third country and which is not considered to be a capital company in the Member State from which the registered office is being transferred.

(2) Where, at the date of a transaction, or as a result thereof—

(a) the effective centre of management of the capital company is in the State, or,

(b) if the effective centre of management of the capital company is in a third country, the registered office of the capital company is in the State,

there shall be charged on the statement required to be delivered pursuant to this Chapter a stamp duty (in this Chapter referred to as stamp duty) and the Stamp Act, 1891, shall, subject to the provisions of this Chapter, apply in relation to the said duty as if the said duty were imposed by that Act.

Statement to be charged with stamp duty.

69. —(1) Where any transaction takes place, a statement of the assets, liabilities and expenses referred to in section 70 of this Act shall be delivered to the registrar—

(a) in the case of the formation of a capital company which is to be incorporated under the Companies Act, 1963, or formed under the Limited Partnerships Act, 1907, before the incorporation or registration thereof, and

(b) in any other case, within 30 days after the date of the transaction,

and the statement shall be charged with stamp duty at the rate of £1 for every £100 or part of £100 of the amount determined in accordance with the said section 70;

Provided that in the case referred to in paragraph (a) of this subsection, the statement shall be charged with stamp duty of not less than £1:

Provided also that, in the case referred to in paragraph (a) of this subsection, if there is difficulty in ascertaining the exact amount in respect of which stamp duty is chargeable, the statement shall be charged in the first instance with stamp duty at the rate aforesaid in respect of such amount as the Revenue Commissioners consider appropriate and, if afterwards—

(i) it is established that too little duty has been paid, the additional duty shall be payable and be treated as duty in arrear, and

(ii) it is established that too much duty has been paid, the excess shall be repaid by the Revenue Commissioners with interest at the rate of 9 per cent. per annum.

(2) In the case of neglect to deliver within 30 days after the date of a transaction the statement required under subsection (1) of this section to be so delivered, the capital company concerned shall be liable to pay to the Revenue Commissioners interest at the rate of one pound per cent. upon the amount of duty chargeable and a like sum for every month after the first month during which the neglect shall continue.

(3) Interest on the additional duty payable under subsection (1) (i) of this section shall be charged at the rate of 9 per cent. per annum from the date of the transaction which gave rise to the charge for duty until the date of payment of the duty.

(4) Save in the case of the capital companies specified in section 73 of this Act, the registrar shall not incorporate a capital company which is to be incorporated under the Companies Act, 1963, or register a capital company which is to be formed under the Limited Partnerships Act, 1907, until the statement referred to in subsection (1) of this section in relation to the company is stamped.

Amount on which stamp duty chargeable.

70. —Stamp duty shall be charged—

(a) in the case of a transaction specified in paragraph (a), (c) or (d) of section 68 (1) of this Act, in respect of the amount of the actual value, at the date of the transaction, of the assets of any kind contributed or to be contributed in

connection with the transaction by the members of the capital company concerned after the deduction of the liabilities attaching to such assets and assumed by the capital company and of the expenses incurred by the capital company in connection with such contribution;

(b) in the case of a transaction specified in paragraph (b), (e), (f), (g) or (h) of section 68 (1) of this Act, in respect of the amount of the actual value, at the date of the transaction, of the assets of any kind of the capital company concerned after the deduction of its liabilities on that date and of the expenses incurred by the company in connection with the transaction:

Provided that, in any case, the amount in respect of which stamp duty is charged shall not be less than the actual value or the nominal value (whichever is the greater) of the shares (if any) in the company concerned allotted to the members of the capital company in connection with the transaction or belonging to the members of the capital company immediately after the transaction:

Provided also that, in arriving at the amount of the actual value in respect of which the duty is charged, there shall be excluded the amount of any assets aforesaid contributed in connection with the transaction by a member with unlimited liability or the share of such a member in the assets of the company.

Abolition of certain stamp duty and relief in respect of certain payments of stamp duty.

71. —(1) (a) In the case of any transaction specified in section 68 (1) of this Act which took place on or after the 1st day of January, 1973, stamp duty shall not be chargeable, under section 8 of the Finance Act, 1899, on any statement of the amount proposed to be secured by an issue of loan capital (within the meaning of that section) or under a provision to which this subsection applies, on any instrument, and, in any case where such duty has been paid since the 1st day of January, 1973, in respect of any such transaction the duty so paid shall, on the application of the person who paid the duty, be repaid to that person.

(b) In this subsection “provision to which this subsection applies” means any provision made by or under statute which charges any trust deed or other document securing loan capital (within the meaning of the said section 8) with the stamp duty payable in respect of a mortgage or marketable security.

(2) In the case of any transaction stamp duty shall not be chargeable on any statement under—

(a) section 112 or 113 of the Stamp Act, 1891, in respect of the nominal share capital of a limited company, or

(b) section 11 of the Limited Partnerships Act, 1907, in respect of amounts contributed by limited partners.

(3) In the case of any transaction specified in section 68 (1) which took place or takes place on or after the 1st day of January, 1973, and before the operative date (in this subsection referred to as the relevant period), and in respect of which statements were required to be delivered under either of the acts referred to in subsection (2) of this section and the stamp duty chargeable thereon has been paid, the company that paid the duty may, at any time before the 1st day of August, 1975, deliver statements of the kind specified in section 69 (1) of this Act in respect of all transactions which took place during the relevant period in relation to the capital company and stamp duty shall be charged thereon as if the 1st day of January, 1973, were substituted for the operative date in section 68 of this Act and, if the stamp duty previously paid exceeds the amount of stamp duty charged on the statement, the amount of the excess shall be repaid to the capital company.

(4) Where, under the provisions of sections 112 or 113 of the Stamp Act, 1891, stamp duty has already been paid in respect of the nominal share capital of any capital company and stamp duty again becomes payable under this Chapter by the capital company in respect of any part of that capital that was not issued on the operative date, there shall be allowed, as a deduction against stamp duty, so much of the stamp duty already paid as bears the same proportion to the total stamp duty already paid as the increase in the issued share capital (in so far as it represents the said share capital which was not issued) bears to the nominal share capital in respect of which the stamp duty has already been paid, and, for the purpose of this section, the nominal share capital in respect of which stamp duty has already been paid shall, in any case where there was a reduction in nominal share capital by way of relief under section 21 of the Finance Act, 1965 , be deemed to be such share capital as would have been chargeable to duty if there had been no such reduction.

(5) Where, on the operative date, there is included in the share capital of a capital company referred to in subsection (4) of this section shares which are not fully paid up, the total amount remaining to be paid up on those shares at that date shall be treated, for the purposes of that subsection, as nominal share capital which was not issued at that date.

(6) The statement required to be delivered pursuant to this Chapter in respect of a transaction specified in section 68 (1) (c) of this Act shall, in any case where, within the period of four years immediately before the date of the transaction and on or after the operative date, there has been a reduction in the issued capital of the capital company concerned as a result of losses sustained by the company, be charged at the rate of zero per cent. in respect of so much of the amount determined in accordance with section 70 of this Act as corresponds to the reduction in issued capital or to so much of the reduction in issued capital to which the rate of zero per cent. had not been applied in respect of an earlier transaction occurring since the reduction in capital.

Reconstructions or amalgamations of capital companies.

72. —(1) If, in the case of a transaction, a capital company or a capital company which is in the process of being formed (in this section referred to as the transferee company) acquires either—

(a) the undertaking or part of the undertaking of another capital company (in this section referred to as the transferor company), or

(b) share capital of another capital company to an extent that, after that transaction, but not necessarily as a result of that transaction, the transferee company owns at least 75 per cent. of the issued share capital of that other company (in this section referred to as the transferor company),

then, subject to the provisions of this section, stamp duty on the statement delivered in accordance with section 69 (1) shall be charged at the rate of zero per cent. (in this section referred to as the reduced rate):

Provided that, where the percentage referred to in paragraph (b) of this subsection is reached by means of two or more transactions, the reduced rate shall apply only to the transaction whereby this percentage is achieved and to any transaction subsequent to the achievement and retention of that percentage.

(2) Subsection (1) of this section shall apply only where the consideration for the acquisition (except such part thereof as consists of the transfer to or discharge by the transferee company of liabilities of the transferor company) consists—,

(a) where the undertaking or part of the undertaking of the transferor company is acquired, of the issue of shares in the transferee company to the transferor company or to holders of shares in the transferor company; or

(b) where shares of the transferor company are acquired, of the issue of shares in the transferee company to the holders of shares in the transferor company in exchange for shares held by them in the transferor company,

with or without a payment in cash, provided that the payment in cash does not exceed 10 per cent. of the nominal value of the shares in the transferee company which are comprised in the consideration.

(3) The statement, which by virtue of this section is charged at the reduced rate, shall become chargeable with stamp duty at the rate specified in section 69 of this Act if the transferee company does not retain, for a period of five years from the date of the transaction in respect of which stamp duty at the reduced rate was charged, at least 75 per cent. of the issued share capital of the other company and all the shares which it held following that transaction, including the shares acquired whether by way of a transaction or otherwise before that transaction and held at the time thereof:

Provided, however, that the reduced rate shall continue to apply if the transfer, as a result of which the shares in question were not held for a period of five years, was either—

(a) a transfer forming part of a transaction which would of itself qualify for the reduced rate pursuant to subsection (1) of this section, or

(b) a transfer in the course of the liquidation of the transferee company.

(4) Where, by reason of subsection (3) of this section, stamp duty becomes chargeable at the rate specified in section 69 of this Act when the transferee company concerned within a period of five years from the date of any transaction in respect of which stamp duty was charged at the reduced rate—

(a) ceases to retain at least 75 per cent. of the issued share capital of the transferor company concerned, or

(b) disposes of any of the shares of the said transferor company which it held after the transaction to which the reduced rate was applied,

then the statement which was delivered to the registrar pursuant to section 69 (1) of this Act in relation to the transaction in respect of which stamp duty was charged at the reduced rate shall be charged

with stamp duty at the rate which would have been charged in the first instance if subsection (1) of this section had not applied to the transaction and the statement thus charged shall have applied to it the provisions of this Chapter save that, for the purposes of subsections (2) and (3) of section 69 of this Act, the date of the transaction shall be the date on which the event specified in paragraph (a) or (b), as the case may be, of this subsection occurred.

(5) This section shall apply only where the effective centre of management or the registered office of the transferor company concerned is in a Member State.

Exemption for certain companies.

73. —Stamp duty shall not be charged in the case of a transaction that is effected by—

(a) a capital company which is formed for the purpose of and carries on exclusively the business of supplying a public service such as public transport or port facilities, or supplying water, gas or electricity, and not less than fifty per cent. of the issued capital of which is owned by the State or a local authority, or

(b) a capital company whose objects are exclusively cultural, charitable or educational:

Provided that the statement which is required to be delivered in pursuance of section 69 (1) of this Act in relation to such transaction shall not be deemed to be duly stamped unless it has, in accordance with the provisions of section 12 of the Stamp Act, 1891, been stamped with a particular stamp denoting that it is not chargeable with stamp duty.

Appeals in certain cases.

74. —A person who is dissatisfied with a decision of the Revenue Commissioners under this Chapter on the amount of the actual value of any assets referred to in section 70 of this Act may—

(a) in the case of stocks, shares or other securities which are not dealt in on a stock exchange, appeal to the Appeal Commissioners (within the meaning of section 33 of the Finance Act, 1972 ) against the decision and the said section 33 shall, with any necessary modifications, apply to an appeal under this paragraph as if the appeal were an appeal under that section,

(b) in the case of land, appeal against the decision in the manner prescribed by section 33 of the Finance (1909-10) Act, 1910; and so much of Part I of that Act as relates to appeals shall, with any necessary modifications, apply to an appeal under this paragraph as if the appeal were an appeal under that section.

Recovery of stamp duty and furnishing of information.

75. —(1) Stamp duty and the interest thereon shall be recoverable from the capital company concerned and, in any case where the capital company is not a body corporate, shall be recoverable from the members of the capital company jointly and severally.

(2) All statements used for the purpose of this Chapter shall be in such form and contain such particulars as may be required by the Revenue Commissioners and every person accountable for stamp duty shall, if so required by the Revenue Commissioners, verify such particulars and deliver to them such evidence as they may require relating to any transaction or to any company concerned in any such transaction.