Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

305. To ask the Minister for Finance the cost of exempting IREF funds from stamp duty on the transfer of shares; and if he will make a statement on the matter. [28335/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Finance Act 2016 contained a number of measures in relation to IREFs, including Stamp Duty exemptions intended to facilitate the transfer of a business out of an IREF and into a legal structure in which it would be more normal to see such a business conducted. 

These Stamp Duty exemptions are:

- Section 739V (5) of the Taxes Consolidation Act (TCA) 1997, in respect of a transfer of the business of an IREF into a company before 1 July 2017, and

- Section 739W (6), in respect of a transfer of the property rental business of an IREF into a REIT before 31 December 2017. 

These provisions provide for the new legal structure to step into the shoes of the IREF. As such, it was not anticipated that there would be any tax cost associated with these Stamp Duty exemptions.

These exemptions apply to the transfer of IREF assets, which broadly speaking are assets that derive their value from Irish property.  While such assets may include shares that derive their value from Irish property, it is considered more likely that IREF assets are real property and loans that derive their value from Irish property. 

There are other Stamp Duty exemptions pre-dating Finance Act 2016 that may be available to an IREF that comes within the meaning of “investment undertaking” in section 739B TCA 1997. These are:

- Section 88 Stamp Duties Consolidation Act (SDCA) 1999, in relation to transfers of stock and securities of investment undertakings.

- Section 88D SDCA 1999, in relation to the re-organisation of investment undertakings.

I am informed by Revenue that there is no requirement to file a Stamp Duty return in relation to the exemptions provided for by sections 739V and 739W TCA 1997 and sections 88 and 88D SDCA 1999. There is, therefore, no basis on which to provide a cost for such exemptions.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

306. To ask the Minister for Finance the cost of exempting IREF funds from VAT on property management fees; and if he will make a statement on the matter. [28336/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am informed by the Revenue Commissioners that the information furnished on VAT returns does not require the yield from particular trades or activities to be separately identified, the VAT incurred on property management fees is not readily identifiable. Therefore, it is not possible to provide the cost of exempting IREF funds from VAT on property management fees.

The Deputy may wish to note that Irish VAT law provides that the management of an undertaking specified in paragraph 6(2) of Schedule 1 of the VAT Consolidation Act 2010 is an exempt activity.  Paragraph 6(4) of Schedule 1 sets out that the management of that undertaking can consist of “any one or more of the 3 functions listed in Annex II of Directive No. 85/611/EEC of the European Parliament and Council (being the functions included in the activity of collective portfolio management) where the relevant function is supplied by the person who has responsibility for carrying out that function in respect of the undertaking”. Annex II provides for a non-exhaustive list of the functions which are included in the activity of management of special investment funds and of investment companies. However, property management services are not included on that list.