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31 1999

STAMP DUTIES CONSOLIDATION ACT, 1999

PART 8

Companies Capital Duty

Interpretation (part 8).

[FA1973 s67]

114. —(1) In this Part, except where the context otherwise requires—

“capital company” means one of the following, namely—

(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,

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

(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 Community;

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

“stamp duty” means the stamp duty imposed by section 116 ;

“statement” means the statement required to be delivered under section 117 (1);

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

“transaction” means a transaction to which section 116 (1) applies.

(2) In this Part, except where the context otherwise requires, reference to stamp duty paid means stamp duty paid to the Commissioners.

Restriction of application (Part 8).

[FA1973 s67A, s67B and s67C]

115. —This Part shall not apply to—

(a) any undertaking for collective investment in transferable securities (UCITS) to which Council Directive 85/611/EEC of 20 December, 1985 (OJ No. L375, 31/12/85), and any Directive amending that Council Directive, relates,

(b) any investment company to which Part XIII of the Companies Act, 1990 , relates, or

(c) any investment limited partnership within the meaning of section 3 of the Investment Limited Partnerships Act, 1994 .

Charge of stamp duty.

[FA1973 s68]

116. —(1) This section applies to the following transactions:

(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 on 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) Stamp duty shall be charged on the statement required to be delivered under this Part where, at the date of a transaction, or as a result of the transaction—

(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,

and the provisions of this Act shall, subject to the provisions of this Part, apply in relation to this duty as if it were imposed by section 2 .

Statement to be charged with stamp duty.

[FA1973 s69]

117. —(1) Where any transaction takes place, a statement of the assets, liabilities and expenses referred to in section 118 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 of that capital company or partnership, 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 per cent of the amount determined in accordance with section 118 but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £.

(2) Notwithstanding subsection (1), in the case referred to in paragraph (a) of subsection (1)

(a) the statement shall be charged with stamp duty of not less than £1;

(b) 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 specified in subsection (1) in respect of such amount as the 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 Commissioners with interest at the rate of 6 per cent per annum.

(3) Simple interest shall be payable by means of penalty on so much of the stamp duty charged on the statement required to be delivered under subsection (1)(b) as remains unpaid after the expiration of one month from the date of the transaction which gave rise to the charge for duty, and such interest shall be payable at the rate of 1 per cent for each month or part of a month for which duty so remains unpaid and it shall be chargeable and recoverable in the same manner as if it were part of the duty.

(4) Interest on the additional duty payable under subsection (2)(b)(i) shall be charged at the rate of 1 per cent per month or part of a month from the date of the transaction which gave rise to the charge for duty until the date of payment of the duty.

(5) 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) in relation to the company is duty stamped or in the case of a capital company specified in section 120 the statement has, in accordance with the provisions of section 20 , been stamped with a particular stamp denoting that it is not chargeable with stamp duty.

Amount on which stamp duty chargeable.

[FA1973 s70]

118. —(1) Stamp duty shall be charged—

(a) in the case of a transaction specified in paragraph (a), (c) or (d) of section 116 (1), 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 116 (1), 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.

(2) Notwithstanding subsection (1)

(a) the amount in respect of which stamp duty is charged shall not be less than the nominal value 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;

(b) 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 referred to in subsection (1) 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.

Reconstructions or amalgamations of capital companies.

[FA1973 s72]

119. —(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 “acquiring company”) acquires either—

(a) the undertaking or part of the undertaking of another capital company (in this section referred to as the “target 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 acquiring company owns at least 75 per cent of the issued share capital of that other company (in this section referred to as the “target company”),

then, subject to this section, stamp duty on the statement delivered in accordance with section 117 (1) shall be charged at the rate of zero per cent (in this section referred to as the “reduced rate”).

(2) Notwithstanding subsection (1), where the percentage referred to in paragraph (b) of subsection (1) is reached by means of 2 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.

(3) Subsection (1) of this section shall apply only where the consideration for the acquisition (except such part of the consideration as consists of the transfer to or discharge by the acquiring company of liabilities of the target company) consists—

(a) where the undertaking or part of the undertaking of the target company is acquired, of the issue of shares in the acquiring company to the target company or to holders of shares in the target company, or

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

with or without a payment in cash, but where there is a payment in cash that payment shall not exceed 10 per cent of the nominal value of the shares in the acquiring company which are comprised in the consideration.

(4) 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 117 if the acquiring company does not retain, for a period of 5 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 target company and all the shares which it held following that transaction, including the shares acquired whether by means of a transaction or otherwise before that transaction and held at the time of the transaction.

(5) Notwithstanding subsection (4), 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 5 years, was either—

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

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

(6) Where, by reason of subsection (4), stamp duty becomes chargeable at the rate specified in section 117 when the acquiring company concerned within a period of 5 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 target company concerned, or

(b) disposes of any of the shares of the target 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 117 (1) 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) had not applied to the transaction and the statement thus charged shall have applied to it this Part except that, for the purposes of subsections (3) and (4) of section 117 , the date of the transaction shall be the date on which the event specified in paragraph (a) or (b), as the case may be, occurred.

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

(8) For the purposes of this section, a company, partnership, firm, association or legal person that is considered to be a capital company in another Member State shall be deemed to be a target company notwithstanding that it is not considered to be a capital company.

Exemption for certain companies.

[FA1973 s73]

120. —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 50 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.

Appeals in certain cases.

[FA1973 s74]

121. —A person who is dissatisfied with a decision of the Commissioners under this Part on the amount of the actual value of any assets referred to in section 118 may—

(a) 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 section as if the appeal were an appeal under that section,

(b) in the case of assets other than land, appeal against the decision to the Appeal Commissioners (within the meaning of section 850 of the Taxes Consolidation Act, 1997 ) and the provisions of Chapter 1 of Part 40 (Appeals) of the Taxes Consolidation Act, 1997 , shall, with any necessary modifications, apply as they apply for the purpose of income tax.

Recovery of stamp duty and furnishing of information.

[FA1973 s75]

122. —(1) Stamp duty and the interest on such duty 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 Part shall be in such form and contain such particulars as may be required by the Commissioners and every person accountable for stamp duty shall, if so required by the 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.