Irish Times gets it wrong on share transfers?

C

ClubMan

Registered User
Messages
49,245
Today's IT answered a question about the transfer of shares from a mother to son and the taxes arising. The answer was simply that 1% stamp duty would apply. This is wrong as far as I know. Consanguinity relief would mean that 0.5% stamp duty would apply but also the transfer would trigger a CGT liability for the mother.
 
Does consanguinity relief apply to non-property transfers?

From the [broken link removed]

Doesn't specifically mention that shares are excluded, but seems that way to me.
 
ClubMan said:
Consanguinity relief would mean that 0.5% stamp duty would apply but also the transfer would trigger a CGT liability for the mother.
Click to expand...
Consanguinity relief applies only to the conveyance or transfer of any property other than stocks or marketable securities

And, true, CGT may arise and CAT, however, any CGT payable may be credited against the CAT liability as the two taxes arise on the same event.
 
the quality of advice is generally pretty poor
 
I belive Clubman is correct and there is a reduced stamp duty rate on transfers of shares between family members - need to see if I can find the definite wording
 
bazermc said:
any CGT payable may be credited against the CAT liability as the two taxes arise on the same event.
Click to expand...
How so since presumably any CGT liability arises on the part of the donor while any CAT liability arises on the part of the recipient and, as such, one cannot be set against the other?
 
efm said:
I belive Clubman is correct and there is a reduced stamp duty rate on transfers of shares between family members - need to see if I can find the definite wording
Click to expand...

There is no reduced rate where shares are invloved:

"Consanguinity relief applies only to the CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance head."
 
The donor pays CGT on the disposal.
The recipient gets a full credit for the CGT against their CAT liability.

I don't know the section of the act, but it is a fairly intrinsic aspect of capital taxes planning. It sounds odd, but it's true.

Brendan
 
ClubMan said:
How so since presumably any CGT liability arises on the part of the donor while any CAT liability arises on the part of the recipient and, as such, one cannot be set against the other?
Click to expand...

True different taxes are payable by the donee and donor there still is a credit available as the two liabilities arise on the "same event"

If for example you wanted to give your son cash and you had shares to sell. Instead of selling the shares for cash and gifting the net after tax cash you would instead transfer the shares and let your son sell them the CAT/CGT credit would be available on the same event
 
Brendan said:
I don't know the section of the act

Brendan
Click to expand...

Section 104 CAPITAL ACQUISITIONS TAX CONSOLIDATION ACT 2003 states:


" (1) Where gift tax or inheritance tax is charged in respect of property on an event happening on or after the date of the passing of this Act, and the same event constitutes for capital gains tax purposes a disposal of an asset (being the same property or any part of the same property), the capital gains tax, if any, chargeable on the disposal is not deducted in ascertaining the taxable value for the purposes of the gift tax or inheritance tax but, in so far as it has been paid, is deducted from the net gift tax or inheritance tax as a credit. against the same; but, in relation to each asset, or to a part of each asset, so disposed of, the amount deducted is the lesser of—
(a) an amount equal to the amount of the capital gains tax attributable to such asset, or to the part of such asset, or
(b) an amount equal to the amount of the gift tax or inheritance tax attributable to the property which is that asset, or that part of that asset.
(2) For the purposes of any computation of the amount of capital gains tax to be deducted under this section, any necessary apportionments are made of any reliefs or expenditure and the method of apportionment adopted is such method as appears to the Commissioners, or on appeal to the Appeal Commissioners, to be just and reasonable."
 
efm said:
I belive Clubman is correct and there is a reduced stamp duty rate on transfers of shares between family members - need to see if I can find the definite wording
Click to expand...
[broken link removed] any use?
 
It does sound odd alright! Is this only in the case of related donors/recipients or also unrelated donors/recipients?
 
Originally Posted by Clubman
[broken link removed] any use?
Click to expand...

That's the very one ! - I was sure that it existed because my wife transfered shares into her brothers name and only had to pay 0.5% stamp
 
So - in spite of what various Revenue summaries quoted by others here say consanguinity relief is indeed available on share transfers between related parties? Anybody still disagree?
 
No-the legislation quoted by yourself above appears to back up your claim, and the Revenue summary is unclear as opposed to conclusive, the onlt requirement appears to be that the company is registered in Ireland.

The CAT/CGT offset rings true from any tax courses I have taken.
 
CCOVICH said:
No-the legislation quoted by yourself above appears to back up your claim,
Click to expand...

The legislation quoted is not completely quoted, hence this missunderstanding.

The particular quote above, by clubman, is contained in Schedule 1 of the Stamp Duty Consolidation Act 1999, under the heading
"CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance."

This effectively means that the relief is only available on conveyances or transfers of that kind, which specifically excludes shares.
 

So the Irish Statute Book is incorrect/incomplete?
 
How would efm's wife have obtained consanguinity relief? Self assessment/Revenue error?
 
No The Irish statute book is correct, although not up to date, that does not matter in this case.

You need to scroll up to where that paragraph begins and you will see the heading
"Conveyance or transfer on sale of any property other than stocks or marketable securities".
And below it has 15 paras dealing with rates etc.... the last being the half rate or blood relative relief as I learned it. As a result para 15 only applies to items falling withing the para heading

Another section deals with the "conveyance or trasnfer on sale of any stocks or marketable securities", this does not give such relief. FYI it is just before the section thats deals with property other than shares
 
CCOVICH said:
So the Irish Statute Book is incorrect/incomplete?
Click to expand...
I presume bazermc means that my partial extract doesn't tell the full story? Quite possible - I find it very difficult to make sense of SIs at the best of times.

Post crossed with bazermc's.

Update: I don't get it though. The extract that I posted does seem to cover shares. [broken link removed] and I can't see that it obviously precludes consanguinity relief in the case of stocks/shares. If anybody (bazermc?) can quote precisely where this is the case then I would be very interested. As I say - I find a lot of this stuff gobbledygook!
 
You must log in or register to reply here.
Menu
Log in
Register