Interest and Penalties for late payment of Stamp Duty arising on the transfer of shares through the CREST settlement system.
Where CREST transactions have been inappropriately exempted from stamp duty, the duty which but for the operation of the exemption would have been charged, falls due and payable on the date the operator-instruction (the deemed executed instrument of transfer) was generated. Such duty must be paid within thirty days of the due date but in practice Revenue allow forty four days to elapse from the date the operator instruction was generated before penalties and interest will be levied.
Where the payment is not received in time this will result in late payment of stamp duty and section 71(d) Stamp Duties Consolidation Act [SDCA], 1999, provides that the late payment regime of section 14 SDCA, 1999, applies to electronic transfers, as they apply to written transfers.
The effect of the late payment scheme is:-
- in relation to operator-instructions generated prior 24 December 2008 a fixed amount of €25 is
charged
plus - in all cases where the unpaid duty exceeds €30, interest is charged at the rate of 0.0219 percent per
day [prior to 1 July 2009 0.0273 per cent per day]
plus - an amount equivalent to 10% of the unpaid duty, where the duty is paid not later than 6 months after the
date the electronic message was generated
or - 20% of the unpaid duty, where the duty is paid more than 6 months but not later than 12 months
after the date the electronic message was generated
or - 30% of the unpaid duty, where the duty is paid more than 12 months after the date on which the electronic message was generated
In relation to stock loan transactions exempted by section 87(2) (stock borrowing) and 87A(2) (stock repo) SDCA 1999, where there is a failure to return the stock or repurchase equivalent stock, as appropriate, within a period of twelve months from the date of the stock loan/transfer, there is express provision at section 87(3) and section 87A(3) SDCA 1999 for the stamp duty which, but for those exemptions would have been chargeable, becoming due and payable within 14 days of the end of that twelve month period. Exceptionally, where the stamp duty is not paid within those 14 days then in addition to the stamp duty due, the sanctions provided at section 87(3) and section 87A(4)SDCA, 1999, as appropriate apply in lieu of the late payment regime of section 14 SDCA 1999. The effect of those sanctions are for interest to be charged on the unpaid duty at the rate of 0.0219 percent per day [prior to 1 July 2009 at the rate of 0.0273 per cent per day] plus a penalty of 1% of the duty for each day the duty remains unpaid.
Upon written application Revenue will, in any particular case, consider mitigation in full or in part of additional charges arising on late payment of stamp duty by reference to section 14(3) SDCA 1999.
When duty is being paid late, the late payment including the appropriate penalties should be paid direct to
the:
CREST Unit,
Large Cases Division,
Office of the Revenue Commissioners,
2nd Floor, Setanta Centre,
Nassau Street,
Dublin 2,
Ireland.
December 2010