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22 1965

FINANCE ACT, 1965

PART IV.

Stamp Duties.

Relief from capital and transfer stamp duty in case of reconstructions or amalgamations of companies.

31. —(1) Where it is shown to the satisfaction of the Revenue Commissioners that there exists a scheme for the bona fide reconstruction of any company or companies or the amalgamation of any companies and that, in connection with the scheme, there exist the following conditions, that is to say—

(a) a company with limited liability is to be registered, or since the passing of this Act a company has been established by Act of the Oireachtas, or the nominal share capital of a company has been increased;

(b) the company (in this section referred to as the transferee company) is to be registered or has been established or has increased its capital with a view to the acquisition either of the undertaking of, or of not less than ninety per cent. of the issued share capital of, a particular existing company;

(c) the consideration for the acquisition (except such part thereof as consists in the transfer to or discharge by the transferee company of liabilities of the existing company) consists as to not less than ninety per cent. thereof—

(i) where an undertaking is to be acquired, in the issue of shares in the transferee company to the existing company or to holders of shares in the existing company; or

(ii) where shares are to be acquired, in the issue of shares in the transferee company to the holders of shares in the existing company in exchange for the shares held by them in the existing company;

then, subject to the provisions of this section,—

(A) the nominal share capital of the transferee company, or the amount by which the capital of the transferee company has been increased, as the case may be, shall, for the purpose of computing the stamp duty chargeable in respect of that capital, be treated as being reduced by either—

(I) an amount equal to the amount of the share capital of the existing company or, in the case of the acquisition of a part of an undertaking, equal to such proportion of the said share capital as the value of that part of the undertaking bears to the whole value of the undertaking; or

(II) the amount to be credited as paid up on the shares to be issued as such consideration as aforesaid and on the shares, if any, to be issued to creditors of the existing company in consideration of the release of debts (whether secured or unsecured) due or accruing due to them from the existing company or of the assignment of such debts to the transferee company,

whichever amount is the less; and

(B) stamp duty under the heading “Conveyance or Transfer on Sale” in the First Schedule to the Stamp Act, 1891, shall not be chargeable on any instrument made for the purposes of or in connection with the transfer of the undertaking or shares, or on any instrument made for the purposes of or in connection with the assignment to the transferee company of any debts, secured or unsecured, of the existing company, nor shall any such duty be chargeable under section 12 of the Finance Act, 1895, on a copy of any Act of the Oireachtas, or on any instrument vesting, or relating to the vesting of, the undertaking or shares in the transferee company:

Provided that—

(a) no such instrument shall be deemed to be duly stamped unless either it is stamped with the duty to which it would but for this section be liable or it has in accordance with, the provisions of section 12 of the Stamp Act, 1891, been stamped with a particular stamp denoting either that it is not charge able with any duty or that it is duly stamped; and

(b) in the case of an instrument made for the purposes of or in connection with a transfer to a company within the meaning of the Companies Act, 1963 , the provisions of paragraph (B) of this subsection shall not apply unless the instrument is either—

(i) executed within a period of twelve months from the date of the registration of the transferee company or the date of the resolution for the increase of the nominal share capital of the transferee company, as the case may be; or

(ii) made for the purpose of effecting a conveyance or transfer in pursuance of an agreement which has been filed, or particulars of which have been filed, with the registrar of companies within the said period of twelve months; and

(c) the foregoing provision with respect to the release and assignment of debts of the existing company shall not, except in the case of debts due to banks or to trade creditors, apply to debts which are incurred less than two years before the proper time for making a claim for exemption under this section.

(2) For the purposes of a claim for exemption under paragraph (B) of subsection (1) of this section, a company which has, in connection with a scheme of reconstruction or amalgamation, issued any unissued share capital shall be treated as if it had increased its nominal share capital.

(3) A company shall not be deemed to be a particular existing company within the meaning of this section unless it is provided by the memorandum of association of, or Act establishing, the transferee company that one of the objects for which the company is formed is the acquisition of the undertaking of, or shares in, the existing company, or unless it appears from the resolution, Act or other authority for the increase of the capital of the transferee company that the increase is authorised for the purpose of acquiring the undertaking of, or shares in, the existing company.

(4) In a case where the undertakings of or shares in two or more companies are to be acquired, the amount of the reduction to be allowed under this section in respect of the stamp duty chargeable in respect of the nominal share capital or the increase of the capital of a company shall be computed separately in relation to each of those companies.

(5) (a) Where a claim is made for exemption under this section, the Revenue Commissioners may require the delivery to them of a statutory declaration in such form as they may direct, made by a solicitor of the Courts of Justice, and of such further evidence, if any, as they may require.

(b) The powers conferred on the Revenue Commissioners by paragraph (a) of this subsection shall be in addition to and not in substitution for the powers conferred on them by section 12 of the Stamp Act, 1891.

(6) If—

(a) where any claim for exemption from duty under this section has been allowed, it is subsequently found that any declaration or other evidence furnished in support of the claim was untrue in any material particular, or that the conditions specified in subsection (1) of this section are not fulfilled in the reconstruction or amalgamation as actually carried out; or

(b) where shares in the transferee company have been issued to the existing company in consideration of the acquisition, the existing company within a period of two years from the date, as the case may be, of the registration or establishment, or of the authority for the increase of the capital, of the transferee company ceases, otherwise than in consequence of reconstruction, amalgamation or liquidation, to be the beneficial owner of the shares so issued to it; or

(c) where any such exemption has been allowed in connection with the acquisition by the transferee company of shares in another company, the transferee company within a period of two years from the date of its registration or establishment or of the authority for the increase of its capital, as the case may be, ceases, otherwise than in consequence of reconstruction, amalgamation or liquidation, to be the beneficial owner of the shares so acquired;

the exemption shall be deemed not to have been allowed, and an amount equal to the duty remitted shall forthwith be a debt due from the transferee company to the Minister for Finance for the benefit of the Central Fund and be payable to the Revenue Commissioners, and the said amount (together with interest thereon at the rate of five per cent. per annum in the case of duty remitted under paragraph (A) of subsection (1) of this section from the date of the registration or establishment of the transferee company or the increase of its capital, as the case may be, and in the case of duty remitted under paragraph (B) of the said subsection from the date on which it would have become chargeable if this Act had not passed) shall be recoverable at the suit of the Attorney-General in any court of competent jurisdiction.

(7) If in the case of any scheme of reconstruction or amalgamation the Revenue Commissioners are satisfied that at the proper time for making a claim for exemption from duty under subsection (1) of this section there were in existence all the necessary conditions for such exemption other than the condition that not less than ninety per cent. of the issued share capital of the existing company would be acquired by the transferee company, the Commissioners may, if it is proved to their satisfaction that not less than ninety per cent. of the issued capital of the existing company has under the scheme been acquired within a period of six months from the earlier of the two following dates, that is to say—

(a) the last day of the period of one month after the first allotment of shares made for the purposes of the acquisition; or

(b) the date on which an invitation was issued to the shareholders of the existing company to accept shares in the transferee company;

and on production of the instruments on which the duty paid has been impressed, repay such an amount of duty as would have been remitted if the said condition had been originally fulfilled.

(8) In this section, unless the context otherwise requires—

references to the undertaking of an existing company include references to a part of the undertaking of an existing company;

shares” includes stock.