Many activities in the financial services sector, particularly those based in Ireland but focused internationally, are exempted from stamp duty. Stamp duty is chargeable on of the following instruments:
- a debt factoring agreement;
- a swap agreement;
- a forward agreement;
- a financial futures agreement;
- an option agreement;
- a combination of any 2 or more of the instruments specified above
- a transfer of, or an agreement to transfer any instrument specified above or a combination of any 2 or more such instruments,
- certain non real property leases
- an American depositary receipt.
The exemptions do not apply where the instrument refers to Irish land or shares in an Irish company. It does not apply to
- instruments relating to immovable property in the State or an interest in such property
- shares or securities in companies registered in the State, other than investment undertakings and securitisation type vehicle.
Debt factoring agreements are exempt. They are defined are agreements for the sale or transfer of a debt, or part of a debt, where the sale occurs in the ordinary course of business of the vendor or purchaser. This exemption would be available for normal invoice discounting and debt factoring. It will not be available for the standalone sale of book debts. The exemption applies to Irish and other debts.
A swap agreement or agreement to transfer a swap agreement, is exempt, provided that It does not apply where it relates to Irish land or shares. A swap agreement in this context, is certain classes of agreements under which the parties exchange the payment or repayment of monies in respect of which such parties have obligations or rights
- which are denominated in different currencies;
- are subject to payment of different interest rate;
- relate to present and future prices of specified commodities, stocks or marketable securities.
The definition covers most interest rate, currencies and commodity swaps as well as the swaps of shares and securities
A foreword agreement and an agreement to transfer a forward agreement are exempt. A foreword agreement is an agreement under which a party agrees to buy or sell commodities, currency, stock or securities or to pay or receive a sum on a specified date within a specified and determinable period of time where the sum payable is determined or determinable at the time of execution of the agreement. It also covers agreements which provide for payment of the right to receive payments or impose liabilities at a future date, where the obligations are dependent on and related to movements in specified stock exchange index or indices.
A financial futures agreement is similar to a foreword agreement. It is in formalised terms and is usually dealt with on a futures or stock exchange. There is an exemption from stamp duty for financial futures agreements and for agreements to transfer such agreements.
An option to buy or sell stocks, marketable securities, commodities or currencies and agreements concerning the right to receive payments and imposing liability to make payments dependant on movement of a stock exchange, is exempt. Also exempt are agreements to borrow money or lend money to another party to the agreement for specified period in consideration of the payment of interest or its equivalent, at a rate that is determinable or determined at the date of execution. The exemption does not apply to Irish lands or shares.
There may be a combination of options, futures and swaps within a single instrument. The combinations are also exempt.
Transfer of securities issued by “section 110” securitisation vehicle, are exempt. The money raised by securities must have been used in the course of the company’s qualifying business. Qualifying business includes the business of holding and managing financial assets, commodities, plant and equipment.
Financial assets includes invoices, receivables, shares, securities, futures, options, derivatives, leases and loan portfolios, instruments evidencing debt, hire purchase agreements, bills of exchanges, carbon offsets, contracts of insurance and contracts for reinsurance.
The transfers of stock and security issued by foreign Governments and local authorities are exempt.
There are exemptions for transfers of assets as such held by pension schemes or charities
- where the asset continues to be held by it after the transfer has taken place to a specified fund,
- to a transferee fund which issues units or shares, which are to be held for the benefit of the pension scheme.
There are exemptions for
- transfers of assets by a fund to or for the benefit of a pension scheme or charity
- transfers of asset to a fund where the receiving fund grants units or shares to the transferring fund or the to unit holders or shareholders in the transferring fund, in proportion to their holdings.
Funds include the principal collective investment vehicles in Ireland.
There are exemptions for the transfers of shares in collective investment schemes. See separately in relation to the various vehicles through which financial collective investment may be undertaken in Ireland. The exceptions apply both to investment vehicles under Irish law (common contractual fund, unit trust, ICAV and investment company) and also to equivalent entities under the laws of other States.
The exemption does not apply to transfers of units or stock of a company registered in the State or a conveyance or transfer which relates to immovable property situated in the State. shares. It does not apply to transfers of units or securities in entities registered outside the State which relate to immovable property in the State or stocks or shares of companies registered in the State.
Transfers and issues for the purpose or reconstructions or amalgamations, by which foreign funds transfer assets to domestic funds or domestic funds issues units in itself to holders of foreign funds in proportion to their holding in the foreign funds, are exempt. There are other exemptions for reconstructions and amalgamations of investment undertakings and entities.
The transfers of assets within certain investment undertakings and unit trusts are exempt.
Certain Corporate Instruments
There is an exemption for a conveyance or transfer of stocks and securities in a company or body cooperate not registered in the State, where the register is situated in the State. THis and that it is intended to facilitate the holding of foreign registers in Ireland.
An instrument of renunciation of a letter of allotment in respect of quoted shares, is exempt. A letter of allotment allows the allottee to renounce the rights, typically issued by reason of existing shareholding, to a third-party. In strict terms, the exemption applies to the Irish Stock exchange. The Revenue may recognise other stock exchange. It is not available for unquoted shares.
There is an exemption for stock borrowing and lending transactions and repo transactions. The commitment to reacquire must be performed within 12 months. Stock lending comprises an out and out transfer, notwithstanding that it is a quasi-security transaction. The exemption covers the transfer of stock to the stock “borrower” and transfer of security. It also exempts the reacquisition.
American Depository Receipts are acknowledgments by trustees that they holds stocks or shares inserted in recognised U.S. stock exchange or Canadian stock exchange. There is an exception for transfers or agreements to transfer American Depository Receipts. Such structures are commonly used by U.S. in order to facilitate investment in public and offerings of U.S. shares.
Various Similar Exemptions
Transfers of an asset covered security or of an asset to or by a designated credit institution in accordance with a scheme approved by the regulator or Minister for Finance under the Asset Covered Securities Act is exempt.
There is exemption on instruments for the sale and transfer of greenhouse gas allowances.
Stamp duty is not chargeable on transfers of
- intellectual property
- single farm payment entitlements
- from a recognised clearing or its nominee to another clearing house or its nominee.
Certain types of securities, including debt securities, issued by the Minister for Finance or by the National Treasury Management Agency on his behalf and other securities issued by the National Treasury Management Agency on behalf of the Minster for Agriculture are exempt from stamp duties.