Î
acquisition of shares in a company
holding a property
•
Stamp Duty at 1% applies to the acquisition of shares in an
Irish incorporated company owning a property as opposed to a
purchase of the property itself. The rate of duty on the transfer
of shares in an Irish incorporated company is also 1%.
•
an exemption from stamp duty is available to transfer of units
in a Regulated Investment Fund (QIF) that own Irish real estate
and interests in an Irish REIT.
•
AT is not payable on a share purchase.
Î
Holding investment property
•
Property rental business profits from Irish land are subject
to corporation tax or income tax at rates that depend on the
nature of the property owner: 25% corporation tax for Irish
resident companies; 20% income tax for non-Irish resident
companies; and up to 55% income tax for individuals.
•
An exemption from such tax is available to Irish approved
charities, pension funds, QIFs and Irish REITs.
•
Profits are calculated broadly by reference to accounts prepa-
red on generally accepted accounting principles but with some
detailed modifications.
•
There are no formal thin capitalisation rules, so for commercial
property, 100% debt financing is possible.
•
Capital allowances (tax depreciation) are available to set off
against such profits in respect of capital expenditure on certain
assets that are used in the property rental business at rates of
15% per year on a straight line basis, with 10% in the final year..
•
A non resident landlord may suffer a 20% withholding tax
on rental payments unless an Irish rent collection agent is
appointed..
•
Distributions and redemptions from a REIT suffer a 20%
withholding tax..
•
Distributions and redemptions from a QIF to a non Irish
resident do not suffer a withholding tax where a qualifying non
resident declaration is submitted.
•
Distributions and redemptions from a QIF to an Irish resident
suffer tax at a rate of 25% for corporations and 41% for indivi-
duals.
Î
Disposals
•
Gains on disposals of investment properties attract corpora-
tion tax for Irish resident companies at an effective rate of
33% and capital gains tax (CGT) at the rate of 33% for Irish
resident individuals. Non residents are liable to CGT on gains
realised from the sale of Irish real estate or, from the sale of
unquoted shares of a company, whose greater value derives
from Irish real estate, at the same CGT rates.
•
An exemption from CGT is available to Irish approved charities,
pension funds, QIFs and Irish REITs
•
Income profits on sales of properties acquired and held as
trading stock or developed and sold in the course of a trade
attract corporation tax at 12.5% for Irish resident companies
and non-Irish resident companies that trade in Ireland through
a permanent establishment and up to 55% income tax for
individuals.
•
Gains of a capital nature made by persons that acquire (or
develop) land with the sole or main purpose of realising a gain
from disposing of the land or anything deriving its value from
the land (when developed) may be subject to Irish income
tax if their activity is not subject to Irish tax on trading profits,
Investor Guide to Europe 2014
| 45
though non-residents
may be able to obtain relief
from such tax under any applicable
double tax treaty with Ireland
Î
Temporary Exemption.
•
Property purchased in Ireland or in the EU before December
31, 2014 and held as investments for at least 7 years, by a com-
pany or an individual will be eligible for exemption from CGT
or corporation tax on chargeable gains, on a proportion of the
gain. 100% exemption applies if the disposal occurs at the end
of year 7 otherwise the exempt part of the gain is calculated
by multiplying the gain by the factor 7/n, where “n” equals the
number of complete years of ownership.
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