Section 146 of the Finance Act, 1994, which enacted section 138 of the original Finance Bill, imposes a requirement of a certificate of clearance from capital acquisitions tax and probate tax in relation to applications for registration of title to land which are based on possession. This section is essentially an anti-evasion provision designed to ensure that such registrations do not provide a vehicle for evading the payment of tax liabilities.
The requirement of a certificate applies to all possession based registrations after 23 May 1994 provided the application was received by the Land Registry on or after 11 April 1994 — i.e. the date of publication of the 1994 Finance Bill.
I am informed by the Revenue Commissioners that the operation of the scheme will allow for the obtaining of the required certificate in advance of the application to the Land Registry. This approach is designed to minimise any element of delay. It is envisaged that the applicant for title, or his professional representative, will make application to the Revenue Commissioners for the certificate giving material information in relation to the prior title. Such information, which will need to be produced in any event in order to satisfy the requirements for registration, will relate to all gifts and inheritances of the property sicne 28 February 1974 or the date of the last registration if later. Tax reference numbers of applicants for certificates will not be required. Once the Revenue Commissioners are satisfied that any liability to capital acquisitions tax, gift tax or probate tax charged on the lands has been, or will be, discharged, a certificate will be issued.
I am further informed by the Revenue Commissioners that, as with any new scheme, the operational aspects will be kept under review to ensure that the scheme runs smoothly and achieves its objective with minimal compliance cost.
