Retrospective taxation considered by TAC

Jan 25, 2021

The Tax Appeals Commission (TAC) published a stamp duty determination, in which the Appeal Commissioner and Chairperson of the TAC, Maire-Claire Maney, determined an assessment raised under section 31D SDCA 1999 should be reduced to nil. The determination was made on the basis that the legislation on which Revenue, as respondents, sought to rely on could not be considered to have retrospective effect.

The transaction relates to the acquisition of a company by the Appellant, which took effect by way of a cancellation of shares in the target company and the issue of new shares to the Appellant, together with some cash consideration. The assessment to stamp duty by Revenue was made on the application of section 31D SDCA 1999. This section was introduced by Finance Act 2019 to impose a stamp duty charge on the court-approved acquisition of companies involving the cancellation of existing shares and the issue of new shares as consideration.

The Appellant argued that the assessment effectively served to retrospectively apply the provision introduced by Finance Act 2019, as the transaction agreement completed prior to the introduction of the legislation. The effective date of the change relates to a scheme order made on or after 9 October 2019.

The Commission was requested to state and sign a case for the opinion of the High Court for this determination, however it is understood that the Appellant has brought a “precautionary” High Court action against the Revenue Commissioner relating to this matter.

See 08TACD2021 for the full determination in this case.