PART IV

Stamp Duties

Chapter I

Special provisions relating to uncertificated securities

101. —(1) (a) In this Chapter—

“the Act of 1891” means the Stamp Act, 1891;

“certificated securities” means securities other than uncertificated securities;

“Commissioners” means the Revenue Commissioners;

“market maker” means a person who—

(i) holds himself or herself out at all normal times in compliance with the rules of the Irish Stock Exchange Limited or the London Stock Exchange Limited as willing to buy and sell securities at a price specified by him or her, and

(ii) is recognised as doing so by the Irish Stock Exchange Limited or the London Stock Exchange Limited;

“member firm” means a member firm of the Irish Stock Exchange Limited, or of the London Stock Exchange Limited, which is not acting in the ordinary course of business as a market maker in securities of the kind concerned;

“relevant period” means the period between the 1st day of September, 1996, and the 31st day of March, 1997, or any subsequent period of 6 months ending on the 30th day of September or the 31st day of March;

“securities” means any stocks or marketable securities;

“the Stamp Acts” means the Stamp Act, 1891, and every other enactment relating to stamp duty;

“uncertificated securities” means any securities, title to which is, by virtue of the Companies Act, 1990 (Uncertificated Securities) Regulations, 1996 (S.I. No. 68 of 1996), transferable by means of a relevant system.

(b) In this Chapter, “generate”, “instruction”, “operator”, “operator-instruction”, “relevant system” and “system-member” have the same meanings, respectively, as they have in the Companies Act, 1990 (Uncertificated Securities) Regulations, 1996.

(c) In this Chapter, references to title to securities include any legal or equitable interest in securities.

(2) This Chapter applies in relation to instruments executed on or after the 1st day of September, 1996.

102. —(1) Where a transfer of title to securities through a relevant system is effected by an operator-instruction, that operator-instruction shall, for all purposes of the Stamp Acts, be deemed to be an executed instrument of conveyance or transfer of such securities and the date of execution shall be taken to be the date the operator-instruction is generated.

(2) Where an operator-instruction is generated in connection with the transfer through a relevant system of an equitable interest in securities, that transfer shall be deemed for the purposes of subsection (1) to have been effected by that operator-instruction.

(3) Where no operator-instruction is generated in connection with the transfer through a relevant system of an equitable interest in securities, that transfer shall, for the purposes of this Chapter, be deemed to have been effected by an operator-instruction generated on the date of the transfer.

103. —Where an operator-instruction is, by virtue of the provisions of section 102 , chargeable with stamp duty under or by reference to the Heading “CONVEYANCE or TRANSFER on sale of any stocks or marketable securities” in the First Schedule to the Act of 1891, the rate at which the duty is charged under that Heading shall be the rate of 1 per cent. of the consideration for the sale to which that operator-instruction gives effect:

Provided that—

(a) where the transfer operates as a voluntary disposition intervivos, the reference in this section to the amount or value of the consideration for the sale shall, in relation to the duty so chargeable, be construed as a reference to the value of the securities transferred,

(b) where the calculation results in an amount which is not a multiple of one penny, the amount so calculated shall be rounded to the nearest penny, and any half of a penny shall be rounded up to the next whole penny.

104. —In relation to a charge for stamp duty arising by virtue of section 102 —

(a) the definition of “accountable person” in subsection (1) of section 122 of the Act of 1891 shall be construed as if the reference, in the Table to that definition, to the vendee or transferee were a reference to the transferee,

(b) notwithstanding section 1 (3) of the Act of 1891 the operator-instruction which is charged to stamp duty by virtue of section 102 shall not be required to be stamped and, accordingly—

(i) any duty so charged shall be due and payable and shall be paid to the Commissioners on the date on which that operator-instruction is generated, and

(ii) that operator-instruction shall for the purposes of section 1 (4) of that Act and notwithstanding section 74 (2) of the Finance (1909-10) Act, 1910, be deemed to be duly stamped with the proper stamp duty when such duty and any penalty relating to such duty has been paid to the Commissioners:

Provided that, where an agreement referred to in section 105 is in force between the Commissioners and an operator, any duty paid in respect of that operator-instruction in accordance with such agreement shall be deemed to have been paid to the Commissioners on the date on which it became due and payable,

(c) subject to paragraph (d), section 15 of the Act of 1891 shall apply with the modification that the penalties imposed for not duly stamping the operator-instruction, which is charged to stamp duty by virtue of section 102 within a particular period of the date of first execution, shall be imposed for non-payment of the stamp duty within that period, and with any other necessary modifications,

(d) sections 2, 3, 5, 6, 11, 12, 14, 15 (4) and 17 of the Act of 1891 shall not apply,

(e) (i) if at any time it appears that for any reason no duty, or insufficient duty, has been paid to the Commissioners, they shall make an assessment of such amount of duty or additional duty as, to the best of their knowledge, information and belief, ought to be charged, levied and paid and the accountable person shall be liable for the payment of the duty so assessed,

(ii) if at any time it appears that for any reason an assessment is incorrect, the Commissioners shall make such other assessment as they consider appropriate, which assessment shall be substituted for the first-mentioned assessment,

(iii) section 13 of the Act of 1891 shall apply to an assessment under this paragraph as if it were an assessment mentioned in that section,

(f) any reliefs or exemptions from stamp duty which are conditional on an instrument being stamped in accordance with section 12 of the Act of 1891 with a particular stamp denoting either that it is not chargeable with any duty or that it is duly stamped shall apply notwithstanding such condition not having been complied with.

105. —The Commissioners may enter into an agreement with an operator, in such form and on such terms and conditions as they think fit, in relation to the collection of stamp duty and the payment of such duty to the Commissioners.

106. —(1) Section 102 shall not apply or have effect—

(a) to the extent that it would give rise to a charge to stamp duty under any of the following Headings in the First Schedule to the Act of 1891—

(i) “CONVEYANCE or TRANSFER of any kind not hereinbefore described.”,

(ii) “DEED of any kind whatsoever, not described in this schedule.”, or

(iii) “MARKETABLE SECURITY.”,

(b) in respect of a transfer of title to securities to a purchaser in completion of a contract for sale to the extent to which the interest transferred has, subsequent to that transfer, been re-transferred in completion of a separate contract for sale made by that purchaser prior to that transfer to that purchaser:

Provided that both contracts were due for completion on the same day and are in fact completed within 25 days after the making of whichever of those contracts was earlier in priority.

(2) Stamp duty shall not be chargeable under or by reference to any Heading in the First Schedule to the Act of 1891 other than the Heading “CONVEYANCE or TRANSFER on sale of any stocks or marketable securities” on an instrument effecting a transfer of securities if the transferee is a system-member and the instrument is in a form which will, in accordance with the rules of the system, enable certificated securities to be converted into uncertificated securities so that title to them may become transferable by means of the relevant system.

(3) Stamp duty shall not be chargeable on any instrument of transfer whereby any securities upon the sale thereof are transferred to a market maker acting in the ordinary course of business as a market maker in securities of the kind concerned or to a person acting as nominee of such market maker.

107. —(1) Stamp duty shall not be chargeable on any instrument of transfer whereby any securities upon the sale thereof are transferred to a member firm acting on its own behalf in the ordinary course of that member firm's business or to a nominee of such member firm:

Provided that if and to the extent that the member firm does not transfer those securities to a bona fide purchaser before the expiration of the period of one month from the date of the transfer, hereinafter in this section referred to as “the specified period”, the member firm shall pay to the Commissioners within 14 days after the expiration of the specified period the amount of ad valorem duty which would have been chargeable on the transfer if this section had not been enacted.

(2) If any member firm fails to pay any sum due to the Commissioners under the proviso to subsection (1), that sum, together with interest thereon at the rate of 1.25 per cent. per month or part of a month from the first day after the expiration of the specified period to the date of payment of that sum and, by way of further penalty, a sum equal to 1 per cent. of the duty for each day the duty remains unpaid, shall be recoverable from the member firm as a debt due to the Minister for Finance for the benefit of the Central Fund.

(3) Where the provisions of subsection (1) apply in relation to a transfer of securities to a member firm, the member firm shall within 30 days of the end of the relevant period within which the transfer is made deliver to the Commissioners a statement in writing or in such other manner as the Commissioners may agree to in writing—

(a) showing in respect of each such transfer—

(i) full details in relation to the type, nominal value, description and amount of the securities comprised in the transfer;

(ii) what part, if any, of the securities comprised in the transfer has been transferred by the member firm to a bona fide purchaser within the specified period and what part of the securities has not been so transferred;

(iii) the date of the transfer and, if any part of the securities has been transferred to a bona fide purchaser within the specified period, the date on which that part was so transferred;

(iv) the amount of stamp duty (if any) payable by virtue of the proviso to subsection (1) and the date of payment;

(b) certifying in respect of each such transfer that—

(i) the member firm was acting on its own behalf in the ordinary course of that member firm's business, and

(ii) any securities transferred in respect of which the stamp duty has not been paid were transferred on sale to a bona fide purchaser within the period of one month after the date of the transfer,

and shall produce such further evidence by way of statutory declaration or otherwise in relation to the matters aforesaid as the Commissioners require.

(4) A member firm which fails to deliver a statement within the period specified in subsection (3), shall be liable to a fine of £1,000.

(5) Section 42 of the Finance Act, 1920, section 35 of the Finance Act, 1935 , and section 32 of the Finance Act, 1961 , are hereby repealed.

108. —(1) Where an instruction is entered or is caused to be entered in a relevant system by a system-member, and the effect of that instruction is that no stamp duty is calculated by the relevant system, that system-member shall retain evidence in legible written form, or readily convertible into such a form, for a period of 3 years from the date of such instruction, in sufficient detail to establish that the related operator-instruction is not chargeable with stamp duty, and the system-member shall make any such evidence available to the Commissioners upon request.

(2) A system-member who fails to comply with the provisions of subsection (1) shall be liable to a fine of £1,000.

(3) Where a system-member fraudulently or negligently enters or causes to be entered an incorrect instruction in a relevant system and such incorrect instruction gives rise to an underpayment of stamp duty, or results in a claim for exemption from duty to which there is no entitlement, that system-member shall incur a fine of £1,000 together with the amount, or twice the amount in the case of fraud, of the difference between the duty so paid, if any, and the duty which would have been payable if the instruction had been entered correctly:

Provided that a system-member shall be deemed to have acted negligently for the purposes of subsection (3) if it comes to the system-member's notice, or it would have come to the system-member's notice if the system-member had taken reasonable care, that an incorrect instruction has resulted in an underpayment of stamp duty, unless the system-member notifies the Commissioners accordingly, in writing, without unreasonable delay.

(4) An incorrect instruction to which subsection (3) applies shall be deemed to be the production of an incorrect document for the purposes of section 94 (2) (d) of the Finance Act, 1983 .

109. —(1) Where on a claim it is proved to the satisfaction of the Commissioners that there has been an overpayment of duty in relation to a charge to duty by virtue of section 102 , the overpayment shall be repaid.

(2) A claim under this section shall—

(a) be made within a period of 6 years beginning on the date on which the payment was made,

(b) set out the grounds on which the repayment is claimed,

(c) contain a computation of the amount of the repayment claimed,

(d) if so required by the Commissioners, be supported by such documentation as may be necessary to prove the entitlement to a repayment of the amount claimed, and

(e) if the claim arises by virtue of the operation of section 106 (1) (b)—

(i) it shall be made on a form prescribed by the Commissioners, and

(ii) it shall not be made to the Commissioners before the 21st day of the month following the month in which the overpayment of duty arose.

(3) Where the claimant is not resident in the State and has no branch or agency in the State the Commissioners may require the claimant, as a condition for obtaining a repayment, to appoint and maintain a tax representative in the State who shall be personally liable to the Commissioners for any loss of duty arising out of an incorrect claim.

(4) A person shall not be a tax representative under this section unless that person—

(a) has a business establishment in the State, and

(b) is approved by the Commissioners.

110. —(1) The Commissioners may make such regulations as seem to them to be necessary for the purpose of giving effect to this Chapter and of enabling them to discharge their functions in relation to administration, assessment, collection, recovery and repayment thereunder.

(2) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

111. —Section 150 of the Finance Act, 1995, is hereby amended—

(a) in subsection (1)—

(i) by the insertion of the following definition before the definition of “equivalent stock”:

“‘collateral stock’, in relation to a stock borrowing, means stock which is transferred to the lender by way of security for the performance of the undertaking referred to in paragraph (b) of the definition of ‘stock borrowing’;”,

(ii) by the substitution of the following definition for the definition of “stock borrower”:

“‘stock borrower’ means a member firm or a market maker within the meaning of paragraph (a) of subsection (1) of section 101 of the Finance Act, 1996, or a nominee of such member firm or market maker;”,

and

(iii) by the substitution of the words “broker and dealer or market maker” for the words “broker or dealer” in paragraph (a) of the definition of “stock borrowing”,

and

(b) by the substitution of the following subsection for subsection (2):

“(2) Stamp duty shall not be chargeable—

(a) on a stock borrowing or on a stock return, or

(b) on the transfer of collateral stock to the lender.”.