The Gazette 1991

GAZETTE

DECEMBER 1991

which include the donor and the

solicitor or other adviser employed

or concerned in or about the

preparation of the instrument or

accompanying statement, may

remain liable to any variation in

stamp duty without time limit.

Private company shares

This type of transaction is fraught

with difficulty and very often the

divergence in values between the

official value per share and the

submitted value can be astro-

nomical. No longer can the parties

to an instrument rely on the

Revenue Commissioners to settle a

reasonable value because of the

surcharges. The submitted value

must be a reasonable estimate of

the market value and if it falls short

of the ascertained value to an

extent greater than the require-

ments for the. surcharges, the

Revenue may impose those

surcharges. It is no longer sufficient

to submit the estimated value or

the price at the last sale. Each

transaction will require an

independent valuation.

Partnerships

Some partnership agreements still

contain clauses relating to future

sale of goodwill viz., the surviving

partners agreeing to purchase the

interest of a deceased partner from

his personal representatives or on

retirement or expulsion of a partner,

forbidding his acting in an area for

a reasonable period. All these

reflect an element of goodwill

which is incapable of valuation at

partnership deed stage. Accord-

ingly, the Revenue Commissioners

may insist on section 104 Finance

Act, 1991 (procedure to apply where

consideration cannot be ascertained)

being applied and, if appropriate,

may stamp the deed and impose the

surcharge if necessary.

These are areas which, up to now,

never gave rise to problems for

stamp duties but now, because of

the compulsory nature and other

factors, must be considered in all

cases.

Miscellaneous

The foregoing are only some

examples where problems arise.

Now it is necessary to examine

each document, even of the most

innocuous nature, to ascertain if

there are any transfers or other

stampable transactions relating to

any " p r o p e r t y" whatsoever.

Intangibles such as goodwill,

benefit of contracts and intellectual

property, will be subject to stamp

duty at contract stage. Employ-

ment agreements, management

agreements, for example, where

they include an element of

purchase by the new employer, of

the benefit of a previous contract

with the old employer, foreign loans

secured on Irish property and all

such, which could be termed

"innocent" documents from a

stamp duty point of view, must be

investigated by the professionals to

ascertain the stamp duty position.

This leaves trustees, personal

representatives and persons

secondarily liable for CAT in a very

invidious situation vis a vis both

taxes. At least for capital acquisi-

tions tax, there is the availability of

the Green Certificate under section

48 (As amended) CATA, 1976 but

this applies only after the period of

two years from the date of the gift

or inheritance, although the

Revenue Commissioners are willing

to consider it within the two years

and wijl certainly do so if there is

no argument as to values, e.g.

quoted stocks and shares etc.

However, the certificate now

becomes more urgent, particularly

with stamp duty in view. It will be

necessary to obtain this "green

certificate" in all areas where the

trustees etc. have an exposure. At

least this will copper-fasten the

values in the absence of fraud or

failure to disclose material facts. If

the trustee or personal representa-

tive has been acting bona fide, it is

anticipated that the Revenue will

raise no problems with them once

the certificate has issued.

The Future

The Revenue must now consider

some form of discharge from stamp

duty and, it is submitted, that the

Revenue Commissioners should

consider combining the stamp duty

and capital acquisitions tax

discharges in the Green Certificate

or similar certificate.

Some form of practical protection

for the professional and innocent

donor must be obtained. If a

professional is acting bona fide, he

should not be penalised for any

inadvertence or negligence on the

part of the taxpayer.

As in the income tax code, there

must be an appeal to the Appeal

Commissioners, for stamp duty. If

Doyle Court Reporters

Principal: Áine O'Farrell

Court and Conference Verbatim Reporting

Specialists in Overnight Transcription

2, Arran Quay, Dublin 7.

Tel: 722833 or 862097

(After Hours)

Fax: 724486

L^ceUence in (Reporting since 1954

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