The Tax Appeals Commission (TAC) has ordered that Revenue refund a taxpayer €43,496 in Stamp Duty from a property transfer involving a €6m property.
This follows appeals Commissioner, Clare O’Driscoll finding that the correct amount of Stamp Duty payable by the taxpayer on the deed of transfer of one quarter of the €6m property is €11,777.
Ms O’Driscoll found that Revenue’s stamp duty assessment issued to the taxpayer of €55,723 in 2008 was incorrect.
In the case, the man in 2006 with his father purchased lands consisting of five plots of registered and unregistered lands as tenants in common.
In 2008, the appellant’s father executed a Deed of Transfer in favour of the appellant whereby he transferred a one quarter share of the property to his son.
The effect of the Deed of Transfer was that the appellant held a three-quarter share of the property and the appellant’s father held a one-quarter share.
In 2008, the properties were worth €6 million and father and son had a joint mortgage debt of €4.95 million on the property.
As a result, solicitor for the appellant 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.
The solicitor computed the €11,777 stamp duty liable by his client as the transaction qualified for consanguinity relief and that a Stamp Duty rate of €11,777 or 4.5 per cent on the 25 per cent share of €261,705 applied.
At the TAC hearing, the tax-payer argued that no consideration passed from him to his father on foot of the Deed of Transfer and therefore the transfer of the one quarter share of the property to the appellant was a gift from his father.
Revenue contended that the correct stamp duty to be applied was €55,723, which allowing for consanguinity relief and a Stamp Duty rate of 4.5 per cent, is based on one quarter or €1.23 million of the outstanding mortgage debt of €4.95 million.
Ms O’Driscoll found that Revenue was incorrect to issue the €55,723 assessment after finding that the Deed of Transfer did not result in the appellant assuming an additional one quarter of the outstanding mortgage debt.
Ms O’Driscoll also found 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.
