The Finance Act 2012 (2012 Act) has introduced a number of changes to the stamp duty rules under S.I. No. 234 of 2012. Section 107 of the 2012 Act introduced changes to stamp duty to place it on a self-assessment basis in respect of instruments executed on or after the 7th July 2012.
The Finance Act 2012 (2012 Act) has introduced a number of changes to the stamp duty rules under S.I. No. 234 of 2012. Section 107 of the 2012 Act introduced changes to stamp duty to place it on a self-assessment basis in respect of instruments executed on or after the 7th July 2012.Deeds will not be adjudicated as the case was previously, the stamp duty certificate will issue straight away and the e-stamp can be attached to the instrument and lodged in the Property Registration Authority straight away. The Revenue Commissioners will replace the old system of adjudication whereby they adjudicated every instrument and now will have the right to audit any of the instruments up to six years after the deed was stamped. The inference being that some deeds will never be adjudicated. If an instrument is audited they can require a valuation and a certified copy of the deed in question.
If an instrument is being adjudicated and the documents are in the Property Registration Authority, the original deed will not be required by Revenue Commissioners and if the self-assessment was adjudged too low, once the amount is paid a letter of discharge will issue from the Revenue Commissioners which can be sent to the Property Registration Authority if necessary. The main advantage of the new system is that e-stamps will issue immediately and if there is an issue it will not require the dealing in the Property Registration Authority to cease while the Revenue Commissioners conduct an adjudication.
An example of this would be a transfer where consanguinity relief was being claimed between two related companies. The adjudication which previously could take a number of months will not be necessary and the e-stamp will issue straight away and the transfer can be lodged in the Property Registration Authority. If the transfer is part of Revenue Commissioners audit they will require supporting documentation such as the valuation and a certified copy of the transfer. If there is a shortfall in the duty paid the Revenue Commissioners will issue a letter of discharge in respect of this, the result being that the Property Registration Authority application can proceed from the date the document is stamped and Revenue Commissioners will only require a certified copy of the deed if an audit query arises.
Whilst these changes will be a welcome relief to practitioners in that they will be able to proceed with lodgements in the Property Registration Authority on the day that the purchaser stamps his, her or its deed, it is crucial to ensure that a proper assessment has been made so that in the event of an audit by the Revenue Commissioners the adjudication will take place without any issues and to avoid penalties and interest.
In the absence of adjudication the number of audits is likely to increase. Practitioners need to consider what documentation the Revenue Commissioners could require for an audit and accordingly should retain these documents on file. These documents may include a valuation at the date of transfer, a certified copy of the deed and evidence from their client in relation to any reliefs they may be claiming.