Tax Appeals Commission Orders Revenue to Refund €43,496 in Stamp Duty
The Tax Appeals Commission (TAC) has ruled that the Revenue must refund a taxpayer €43,496 in stamp duty following a property transfer involving a €6 million property. This decision was made by appeals commissioner Clare O’Driscoll, who determined that the correct amount of stamp duty payable by the taxpayer for the transfer of one quarter of the property was €11,777. O’Driscoll found that the stamp duty assessment issued by Revenue in 2008, amounting to €55,723, was incorrect.
The case involves a man and his father who purchased lands consisting of five plots of registered and unregistered lands as tenants in common in 2006. In 2008, the father executed a deed of transfer, transferring a one-quarter share of the property to his son. This resulted in the appellant holding a three-quarter share of the property, while the father retained a one-quarter share. At the time, the properties were valued at €6 million, and the father and son had a joint mortgage debt of €4.95 million.
The appellant’s solicitor estimated that the equity of redemption on the property was €1.04 million, and the one quarter transferred had an equity value of €261,705. Taking into account consanguinity relief, the solicitor calculated that the stamp duty payable by the client was €11,777, based on a rate of 4.5% on the 25% share of €261,705. However, during the TAC hearing, the taxpayer argued that the transfer of the one-quarter share of the property was a gift from his father, as no consideration was passed between them.
Revenue, on the other hand, contended that the correct stamp duty to be applied was €55,723. They argued that, taking into account consanguinity relief and a stamp duty rate of 4.5%, this amount was based on one quarter, or €1.23 million, of the outstanding mortgage debt of €4.95 million. However, O’Driscoll found that Revenue’s assessment was incorrect, as the deed of transfer did not result in the appellant assuming an additional one quarter of the outstanding mortgage debt. She also determined that the deed of transfer did not affect the joint liability of the appellant and his father for the mortgage debt in relation to the property.
This ruling by the TAC highlights the importance of accurate stamp duty assessments and the need for Revenue to ensure that calculations are based on the correct factors. The taxpayer in this case was able to successfully argue that the stamp duty payable was significantly lower than initially assessed, resulting in a substantial refund.
It remains to be seen whether this decision will have any wider implications for other taxpayers who may have been incorrectly assessed for stamp duty in similar circumstances. The TAC’s ruling sets a precedent that could potentially lead to further appeals and refunds in cases where the correct amount of stamp duty payable has been miscalculated.
Overall, this case serves as a reminder for both taxpayers and Revenue to carefully consider the relevant factors when assessing stamp duty, and to seek professional advice if there are any doubts or discrepancies. The TAC’s decision emphasizes the importance of fairness and accuracy in the tax system, ensuring that taxpayers are not burdened with unnecessary and incorrect charges.