The Gazette 1991

DECEMBER 1991

GAZETTE

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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