The Finance (No. 2) Bill 2008 confirms various measures announced on Budget Day (see E-Alert Oct 2008 here and introduces a number of additional measures.
- Instruments which have not been presented for stamping within the required 30 day period can for a period of 56 days following the passing of the Bill into law, be delivered to the Revenue Commissioners together with the duty and interest relating to such duty and no further penalties will be payable.
- The Bill amends certain anti-avoidance legislation which was introduced by Finance Act 2007 (relating to resting on contract, licence agreements and agreements for lease) but these measures required a ministerial order to bring them into operation and such ministerial order has not to date been made. Details of the Finance Act 2007 anti-avoidance measures as set out in an earlier e-alert April 2008 here. The Bill proposes to exclude from the anti-avoidance legislation certain contracts for the sale of an interest in land entered into solely in connection with a Public Private Partnership arrangement and certain contracts or agreements for the sale of relevant interest in certain categories of tax incentive buildings. A report commissioned by the Government from Goodbody Economic Consultants after the passing of Finance Act 2007 pointed out that the anti-avoidance measures contained in Finance Act 2007 could affect many National Road Authority PPP contracts and Local Authority PPP contracts thereby increasing the costs of such projects. The proposed exclusions for the anti-avoidance legislation contained in the Bill and the reduction in the top rate of stamp duty for commercial property from 9% to 6% announced in the Budget could indicate a shift in thinking within the Department of Finance in favour of bringing the anti-avoidance legislation into effect sooner rather than later.
- A further amendment to anti-avoidance legislation is to provide that with effect from 20 November 2008 exchanges of property come within the ambit of Section 34 SDCA 1999. Prior to 20 November 2008 this section provided that where in connection with or in contemplation of a sale of property a vendor enters into an agreement to grant a lease for a term exceeding 35 years or enters into a contract to give other rights in relation to the property, the subsequent conveyance of the property with the benefit of that contract or agreement would be charged by reference to the value of the property and in ascertaining such value of the property the value of the agreement for grant of a lease or for the grant of other rights, is to be disregarded.
The purpose of the amendment to Section 34 contained in the Bill is to ensure that Section 34 would operate where such contract or agreement is entered into in contemplation of or in connection with an exchange of property as well as a sale of property.
4. The Bill also introduces further technical changes to the framework legislation which precedes the introduction of e-stamping. These changes will be of interest chiefly to practitioners.