Stamp duty on shares is a 1% tax charged by Revenue on transfers of Irish company shares valued over €1,000, payable within 44 days to ensure the transfer document's legal validity and admissibility in court.
Stamp Duty on Shares is a tax imposed by the Revenue Commissioners on the transfer of shares in Irish-incorporated companies. This duty applies at a rate of 1% on the consideration paid for the shares, or their market value if higher, for transactions exceeding €1,000 in value. It ensures that share transfers are documented and taxed appropriately, maintaining transparency in corporate ownership changes.
When executing a share transfer, whether selling to an investor, gifting to family, or reallocating among founders, you must submit a stamped stock transfer form to Revenue for adjudication. Failure to pay stamp duty renders the transfer document inadmissible in court, potentially invalidating the ownership change. This process integrates with filings like those in a change of shareholders update to the Companies Registration Office.
Understanding Stamp Duty on Shares is vital for founders managing equity during funding rounds or exits. Intra-group transfers may qualify for relief, but strict conditions apply to prevent abuse. Always factor this cost into transaction planning to avoid delays or penalties from tax interest.
Stamp Duty on Shares is calculated at 1% of the higher of the consideration paid or the market value of the shares transferred, applicable only to transactions over €1,000. For example, transferring shares worth €100,000 incurs €1,000 in stamp duty. Non-cash considerations, like assuming liabilities, are valued at open market rates.
Market value applies when no consideration is paid, such as gifts, ensuring Revenue captures economic substance. Multiple instruments for a single transfer aggregate for threshold purposes. Professional valuations may be required for unlisted shares, adding to compliance costs.
Stamp Duty on Shares applies to transfers of shares in Irish companies, including private limited companies and public companies not listed on recognised stock exchanges. It covers sales, gifts, and exchanges but exempts transfers within recognised clearing houses or certain market makers.
Intra-group transfers between 90%-connected companies qualify for 90% relief if conditions persist for five years, subject to clawback. Nominee holdings and bare trusts often exempt, but consult advisors to confirm. This tax does not apply to new share allotments, only existing share transfers.
To pay Stamp Duty on Shares, execute a stock transfer form and submit it to Revenue via the Stamp Duty online system or post within 44 days. Pay electronically through ROS, receiving a certificate of adjudication confirming the amount. The stamped document then updates your register of members.
Late submissions incur daily interest at 0.0219%, escalating costs significantly. Bulk submissions suit high-volume transfers. Retain stamped originals for six years, as they prove valid title during disputes or due diligence.
Certain transfers qualify for full exemptions, such as those by market makers or within recognised investment exchanges. Intra-group relief reduces duty to 0.1% if companies maintain 90% connection for five years, with clawback for early breaches. Small transfers under €1,000 escape entirely.
Non-residents pay but may reclaim via treaty provisions. Stamp duty consolidations for group restructurings offer further relief. Always verify eligibility to minimise costs legally.
Unstamped documents within 44 days become inadmissible in Irish courts, potentially voiding transfers. Late payments accrue daily tax interest at 0.0219%, plus penalties up to 10% for negligence. Revenue may pursue directors personally for unpaid duty.
During company search, unstamped transfers raise red flags, delaying funding or sales. Proactive payment ensures clean title chains for future transactions.
Stamp duty payments feature in your CT1 corporation tax return as non-deductible expenses, though group relief claims may adjust computations. Accurate recording supports compliance and withstands Revenue audits tied to share transactions.
Transfers often coincide with change of shareholders filings, linking stamp duty to CRO obligations for seamless administration.
