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GAZETTE
sioners are more likely to
agree a market value in res-
pect of a tax liability charge-
able maybe at 3% for Stamp
Duty purposes than in
respect of a Gift Tax or a
Capital Gains Tax liability,
which may be charged at a
rate of maybe 30%. No
problem should arise if a
practitioner makes it quite
clear to the Revenue Com-
missioners that he requires
a market value agreed for all
tax purposes.
It should be noted that
we are speaking here of the
open market value of im-
movable property. Different
considerations would apply
in the case of a transfer of
private company shares
where differing legislative
provisions might apply for
valuation purposes.
(ii) The market value of the
property when it was acquired
by A is necessary for Cap-
ital Gains Tax purposes. If
the property was acquired
prior to 6th April, 1974 the
market value at that latter
date is also necessary.
(iii) The question of whether
the property has develop-
ment value can be important.
This is particularly so for
Capital Gains Tax purposes,
where the rate of tax and
indexation may be affected.
It should be noted that de-
velopment value has no
relevance for Capital Ac-
quisitions Tax purposes in
the sense that lands that
have development value are
still agricultural property
and, as such, are entitled to
agricultural relief if applic-
able in the circumstances of
the particular case.
(iv) If the property to be
transferred includes a dwel-
ling house it may be exempt
from Capital Gains Tax
under Section 25 Capital
Gains Tax Act 1975 if it is
A's main residence. In such
a case an apportionment of
market value would be nec-
essary for Capital Gains Tax.
(B) Regarding the Transferor
(Disponer):
(i) The
consanguinity
between the Transferor and
the Transferee is very
relevant;
(a) The amount of Stamp
Duty chargeable may be
reduced by one-half if the
appropriate consanguinity
certificate is included in the
transfer. (See Paragraph 4
of the Head of Charge 'con-
veyance or transfer on sale'
in the First Schedule as
amended to the Stamp Act
1891).
In this connection a
common problem must be
high-lighted. Where, for
example, the Transferor
transfers property to his son
and to the son's wife, the
provisions of Paragraph 4
do not apply, as the son's
wife has no consanguinity
to the Transferor. This prob-
lem cannot be overcome by
two transfers, that is, one
from the Transferor to his
son of the entire property
followed by a transfer by
the son of that property into
the joint names of himself
and his wife because, in
that case, the overall duty
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payable would be the same.
However, if the family home
is involved, the second
transfer would be exempt to
that extent and therefore a
Stamp Duty saving might
be obtained. If two transfers
are used, the anti-avoidance
provisions of Section 8
Capital Acquisitions Tax Act
1976 should be kept in
mind.
(b) For Capital Acquisi-
tions Tax purposes the class
thresholds and the "favour-
ite nephew" relief are based
on consanguinity.
(c) For Capital Gains Tax
purposes the relief afforded
by Section 27 Capital Gains
Tax Act 1975, as amended
by Section 8 Capital Gains
(Amendment) Act 1978 is
confined to children, includ-
ing favourite nephews and
nieces of the Transferor.
(d) The provisions of the
Status of Children Act 1987
may be relevant (see
Sections 3 and 27 of that
Act).
(ii) The Age of the Trans-
feror: This is relevant for
Capital Gains Tax purposes.
The reliefs provided by
Section 26 Capital Gains
Tax Act 1975 and also
Section 27 as already men-
tioned apply only where the
Transferor is over 55 years
of age at the date of the
transfer.
(iii) How long hes the
Transferor owned the
Property? This is relevant
for Capital Gains Tax pur-
poses as the rate of tax and
indexation may be affected.
Furthermore, the reliefs
under Section 26 and 27 of
the Capital Gains Tax Act
already mentioned are not
available unless the qualify-
ing assets have been owned
by the Transferor for the
period of not less than 10
years ending with the date
of the disposal.
(iv) Does the Transferor
wish to reserve rights to
himself or to others? Such
a provision would affect
Stamp Duty and Gift Tax. A
deduction could be claimed
for Stamp Duty purposes
179