Maman Poulet | Clucking away crookedly through media, politics and life

Tax Amnesty 2009 – what you didn’t know we had one?

March 20th, 2009 · 16 Comments · dodgy solicitors, Irish Politics, Michael Lynn

Did you know there was a tax amnesty last month? Country on it’s knees, social welfare being difficult to claim, cuts in public services, banks being bailed out… but if you owned land and had not paid stamp duty on it don’t worry – a deal was done and there’s been a unseemly rush to get it all sorted and landowners who ‘forgot’ to pay have been let off.

Simon Carswell reports today in the Irish Times about this ‘stamp duty incentive scheme’ and the amounts collected by Revenue in the past month.

THE REVENUE Commissioners has collected an additional €7.5 million since the end of last month in stamp duty and interest for the late processing of transactions under a special penalty amnesty.

This brings the total collected by the Revenue to €37.5 million under its “stamp duty incentive scheme? to encourage solicitors to present old deeds for stamping before the introduction of electronic stamping later this year.

Solicitors who availed of the Revenue’s “incentive scheme? avoided penalties of up to 30 per cent of the duty payable.

The Revenue has collected €30.3 million in stamp duty and interest of €7.19 million under the amnesty for solicitors and clients.

Most of the instruments stamped late were deeds for property where, for example, the client may not initially have been able to afford the stamp duty.

Solicitors are normally charged a €25 penalty, interest and a surcharge penalty of up to 30 per cent of the stamp duty owing after 12 months if a deed is not stamped within 44 days of the transaction.

An accountancy source told me last month about Revenue offices staying open till midnight to allow solicitors to pay stamp duty on lands/properties purchased by their clients under a scheme – ok lets call it an amnesty and stop talking in Revenue speak. I’m not a tax accountant or in the property purchasing or legal business so bear with me and join in the comments to help me get around this gift to property developers/magnates.

Electronic conveyancing is coming in later this year – the Land and Conveyancing Bill 2006 having become an act. Things had to be gotten in order for this to happen – someone/everyone bar me knew there was a lot of land deals out there that had not had stamp duty paid on them.

Enter the Finance Act (No.2) 2008 – which brought in a 56 day waiver of penalties from date of enactment for all executed but unstamped documents provided the documents are presented for stamping along with the appropriate stamp duty and interest. So things were very busy in the Revenue Stamp Duty Section in the middle of February when the 56 days were almost up.

Still with me?? Good! I’m going to explain why you should be interested now!

Some of the land we are talking about here was purchased maybe 10 years ago – so how could the sale have been legally completed if the stamp duty had never been paid. We’re talking about a sizeable amount of money – which without an amnesty should have incurred penalties and interest. Also mortgages would have been arranged for many properties/developments and if there is one thing I’ve learnt from Michael Lynn it’s that solicitors have to give undertakings to banks about properties that the purchase is legal and complete.

So I’m wondering
a) How come the Revenue Commissioners allowed this to go on for so long – ie lands being purchased and no stamp duty being paid?
b) Can the Law Society explain how their members conducted sales of property which were not complete and how they could give undertakings to banks on the purchase of land where the stamp duty had not been paid?
c) Can the government explain why property developers and the rest get an amnesty on fines and interest on not paying their stamp duty aka obeying the law?

What else should I be wondering? I know people won’t be surprised that the builders have their paths eased to the taxman under this government – remember that on April 7th when we all being screwed again. The Government can go on about e-conveyancing and getting thing in order all they want – this smells of rotten pork barrel politics Irish style.

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