My mother owns some agricultural land.
I am trying to establish a 10 year lease (needs to be > 7 years) on this land for a nominal value in order to avail of a particular scheme with the department of agriculture.
The nominal value (X) per year is well below the market rent (Y) available (based on a valuation report). There is a specific reason for this, i.e. the lease has to be for a nominal value (I am financially compensating my mother for this).
The leases are now about to be signed. After that I intended to get the lease stamped with the Revenue Commissioners. As far as the solicitor is concerned, the stamp duty payable will be 1% of the annual market rent (Y).
I checked with our accountant and he says that because the lease is below the market rent (Y), then the stamp duty payable will be calculated as (1% of X) + (3% of (Y-X) * 10 years). I rang the Revenue and they were of the same opinion. If this is true, then the stamp duty payable would be considerable.
The department of agriculture says they do not care if the lease is stamped. They are not necessarily saying that I do not need to get the lease stamped from a Revenue perspective.
X is €2000 approx annually
Y is €9500 approx annually
1% of Y = €95
(1% of X) + (3% of (Y-X) * 10 years) = €2270
I have two questions:
1) Am I liable for 1% of the annual rent X or the much larger amount which our family accountant thinks? My solicitor still disputes it and thinks it 1% of Y (i.e. 1% of the annual market rent).
2) If it is true, then do I have to stamp the lease with the Revenue? As far as the department is concerned, they said they do not care. I only want to use this lease to submit an application for one particular scheme (closing date next month). I was therefore of the opinion that I would not bother getting the lease stamped, but the solicitor does not like this idea.
Any advice would be welcome on this matter.
I am trying to establish a 10 year lease (needs to be > 7 years) on this land for a nominal value in order to avail of a particular scheme with the department of agriculture.
The nominal value (X) per year is well below the market rent (Y) available (based on a valuation report). There is a specific reason for this, i.e. the lease has to be for a nominal value (I am financially compensating my mother for this).
The leases are now about to be signed. After that I intended to get the lease stamped with the Revenue Commissioners. As far as the solicitor is concerned, the stamp duty payable will be 1% of the annual market rent (Y).
I checked with our accountant and he says that because the lease is below the market rent (Y), then the stamp duty payable will be calculated as (1% of X) + (3% of (Y-X) * 10 years). I rang the Revenue and they were of the same opinion. If this is true, then the stamp duty payable would be considerable.
The department of agriculture says they do not care if the lease is stamped. They are not necessarily saying that I do not need to get the lease stamped from a Revenue perspective.
X is €2000 approx annually
Y is €9500 approx annually
1% of Y = €95
(1% of X) + (3% of (Y-X) * 10 years) = €2270
I have two questions:
1) Am I liable for 1% of the annual rent X or the much larger amount which our family accountant thinks? My solicitor still disputes it and thinks it 1% of Y (i.e. 1% of the annual market rent).
2) If it is true, then do I have to stamp the lease with the Revenue? As far as the department is concerned, they said they do not care. I only want to use this lease to submit an application for one particular scheme (closing date next month). I was therefore of the opinion that I would not bother getting the lease stamped, but the solicitor does not like this idea.
Any advice would be welcome on this matter.