Withholding Tax in Land Deal

M

mickeyg

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A colleague of mine is buying about 15 acres of land. The vendor lives and works in the UK. Colleague wants to complete deal asap but delays keep cropping up. Last one was the need for the vendor to apply for a PPS.
Now the delay is due to vendor having a need for a Tax Clearance Certificate from the Irish Revenue. This presumably is in order for full amount of money to be paid over without the deduction of tax at source.

Can any legal eagle out ther confirm that this is the correct procedure in this circustance and that the solicitor involved in this conveyancing transaction is obliged to withhold tax if a Tax Clearance Cert. is not provided?
How long should it take for a Tax Clear. Cert to issue??

Many Thanks
 
Can any legal eagle out ther confirm that this is the correct procedure in this circustance and that the solicitor involved in this conveyancing transaction is obliged to withhold tax if a Tax Clearance Cert. is not provided?
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Yes, this is the case.

How long should it take for a Tax Clear. Cert to issue??
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Depends on the individual tax office and how busy they are. Could be a matter of days, or it could take weeks.
 
As a follow on to the above, does anyone know if you likewise need a vendors Tax Clearance cert if buying his/her PPR when its above some threashold value?
R
 
CGT threshold is E500K - on or over that cannot complete without a CGT clearance cert. From vendors perspective, does not matter if its PPR or not. Still need clearance.

mf
 
MFI,
Do you mean if the value of the transaction is €500k. or greater a CGT Clearance Cert is required in order to complete??
Is this Cert obtained from the local tax office or the Collector General's office?
Any idea on how long it might take to receive??

Thanks
 
Just to clarify one point: it is technically possilbe to complete without a CGT cert IF the Vendor is happy for the purchaser's solicitor to deduct 15% and pay it to Revenue. If there is a big CGT bill anyway (especially at this time of year), the Vendor might be happy enough to do this.
 
Oh, I see. its just a CGT clearance cert thats required. I presume its Revenue confirming that the vendor property is their PPR and then no CGT deducted. Its not a general tax compliance cert or anything like that?
R
 
Does the 15% withholding apply to the deposit also where a CGT Clearance cert is not available?
 
Not sure what you mean by this. The deposit is never released to the vendor until the sale is complete. Their solicitor is obliged to hold it in trust or as stakeholder until then.
 
mickeyg said:
Does the 15% withholding apply to the deposit also where a CGT Clearance cert is not available?
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15% WHT applies to the gross sales proceeds - so would therefore apply to the deposit but not at the stage the deposit is paid.

THis WHT is similiar to RCT in that it serves to ensure Revenue are made aware of a "potential" CGT receipt to them before it actually happens
 
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