Eugene Regan (Fine Gael)
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Will the Minister of State clarify the provisions in stamp duty legislation? I understand they do not provide for Revenue to accommodate a phased payment system for individual taxpayers who have a liability but who due to economic difficulties cannot make the repayment on a lump sum basis. Revenue provides such an accommodation in other areas of taxation for taxpayers who get into difficulty. The standard response on stamp duty is there is no provision within existing legislation to permit staged payments.

Revenue issued a circular in December 2008 entitled, Case Decision Escalation Framework, which stated the Commissioners would be understanding and accommodating regarding taxpayers who get into particular financial difficulties and they could work with them once the taxpayer was open and forthcoming on his or her position. It stated, "Revenue is disposed to working with such businesses and taxpayers to find a way through these difficulties provided there is a positive and honest engagement with Revenue and the fundamentals of the underlying business are sound". The circular refers to individual taxpayers in recent times experiencing particular difficulties meeting their tax payment obligations and states, "The Collector General has decided that some additional considerations to those that normally or generally apply may arise in determining how Revenue will respond in these type of situations" and reference is made to the case decision escalation framework procedure.

I am aware of a number of cases of individuals in difficulty such as one first-time buyer owing stamp duty. He did not occupy the property because he lost his job and had to emigrate and find work abroad. There is a willingness on the part of Revenue in most cases to accommodate individuals who encounter problems meeting their tax liabilities and where Revenue recognises the cases are bona fide, the taxpayer is given time to make phased or staged payments and the matter is resolved. However, no such provision relates to stamp duty and staged payments are not permitted.

Martin Mansergh (Tipperary South, Fianna Fail)
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Timely payment of taxes and duties by specified dates is a fundamental requirement of our tax system and is provided for in the legislation governing all taxes and duties, including stamp duties. It is not considered appropriate to legislate for financial payment difficulties that individual taxpayers may face in particular circumstances in the payment of taxes or duties. The Revenue Commissioners are charged with the collection of taxes and duties by the specified due dates for payment and the tax code provides that interest charges, and in appropriate cases penalties, will be incurred by taxpayers who fail to pay their taxes and duties on a timely basis.

Revenue, under its "care and management" powers, will in certain circumstances be prepared to consider suspending enforcement action where tax is due but unpaid and will instead accept phased payment arrangements in circumstances where compliant taxpayers are experiencing genuine short-term cash flow difficulties but who otherwise have sound businesses and would be expected to honour the phased payment schedule and ultimately be able to pay their taxes in full. Revenue will consider such cases on an individual basis by reference to the facts and in accordance with a strict but uniform approach, which will in all cases involve payment of statutory interest on all late payments.

Details of Revenue's approach, which recognises the genuine difficulties faced by some taxpayers in the current economic climate, are set out on the home page of its website, www.revenue.ie, under the heading, "Tax Payment Difficulties". Furthermore, the recently published Finance Bill contains provision for a significant reduction in the rate of interest charged on overdue taxes, including overdue stamp duty. Stamp duty is, however, somewhat different from other taxes in that it is paid on instruments, for example, deeds of conveyance, which are stampable on the expiration of a 30-day period after the instrument is first executed. Generally, a person entering into a transaction that involves payment of stamp duty on an instrument knows in advance what the stamp duty liability will be. Accordingly, on entering into a transaction giving rise to stamp duty that person must make arrangements for timely payment not only of the consideration payable on the transaction to the other party but also of the stamp duty payable to Revenue.

Stamp duty is also different in that an instrument that is not correctly stamped cannot be used for any purpose. For example, it will not be accepted by a bank as a security for a mortgage, by the Property Registration Authority for title purposes, and it cannot be tendered in evidence in court proceedings. An instrument will not be stamped by Revenue until the full stamp duty is paid. Interest, charges and penalties arise if the instrument is not stamped on time, but Revenue has power under section 14 of the Stamp Duty Consolidation Act 1999 to remit a penalty in certain exceptional circumstances.

It is not considered appropriate to legislate in a general way for taxpayers experiencing tax payment difficulties. Each case will depend on its own facts and circumstances. In the case of stamp duty, there are additional complicating factors with such a legislative approach because it is a tax on instruments and that payment is linked to such matters as registration of title and evidential requirements.

Eugene Regan (Fine Gael)
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First-time buyers who are exempt from stamp duty are aware of the position on entering into the transaction, which the Minister of State said is important, and they know their liability is zero. However subsequently, due to unforeseen circumstances, if they find themselves in difficulty and it is not practical for them to remain the occupier of the property they purchased, they must pay the duty because they no longer occupy the property having notified the liability to Revenue but there is no facility for the Commissioners to accommodate staged payments. That is the issue and the Minister of State's reply does not address such a scenario.