Gerard Murphy
Ceist:148 Mr. Murphy asked the Minister for Finance if a person who is leasing land has to pay stamp duty. [12286/04]
Amharc ar fhreagraWednesday, 28 April 2004
Ceisteanna (117, 118)
Freagraí scríofa
I am informed by the Revenue Commissioners that there are two categories, under the First Schedule of the Stamp Duties Consolidation Act 1999, for charging stamp duty on the creation of a lease of immovable property or rights relating to such property. The rate of stamp duty that is charged on the average annual rent payable for the term of the lease is 1%, 6% or 12% depending on the length of the term of the lease, ranging from one year to 100 years and over. Where the lease is for a definite term but is less than one year, a stamp duty rate of 1% is charged on the rent reserved for the definite period.
The rate of stamp duty that is charged on the premium or key money payable on non-residential property can range from 1% to 9%. The amount of the consideration chargeable to ad valorem duty is the amount ascertainable at the time of execution of the legal instrument involved. The legal instrument should contain all the facts and circumstances affecting the liability to the duty.
Brian O'Shea
Ceist:149 Mr. O’Shea asked the Minister for Finance further to Parliamentary Question No. 202 of 6 April 2004, the meaning of a phrase (details supplied) in his reply; and if he will make a statement on the matter. [12307/04]
Amharc ar fhreagraThe phrase in question refers to the differing nature of the relationships involved in a legal context. On 17 February 2004, I provided a reply to a parliamentary question from Deputy Richard Bruton which set out the different treatments of separated, cohabiting and married persons under the tax code, reflecting the different nature of the relationships between the parties. My reply indicated that under the income tax code, married parents may elect for joint assessment, separate assessment or single assessment.
Under joint assessment, the couple can transfer their personal credit and part of their bands between them. In the case of a married couple, where only one spouse has income, the facility for joint assessment allows the earning spouse to avail of the married personal credit — which is double the personal credit of a single person — and an increased standard band. In addition, the home carer tax credit may be claimed by a married couple who are jointly assessed for tax where one spouse remains working in the home in order to care for children or other dependent persons.
Under separate assessment, each spouse is assessed on his or her own income but one spouse's unused personal credit, reliefs and the transferable portion of the standard rate band may be transferred to the other spouse. This means that the tax payable under separate assessment does not exceed the tax payable had that couple elected to be jointly assessed. The home carer credit may not be claimed by spouses who opt for separate assessment. Under single treatment, each spouse is treated for tax purposes as if unmarried. Under single treatment, one spouse's unused credits, reliefs and standard rate band cannot be transferred to the other spouse. As with separate assessment, the home carer credit may not be claimed by spouses who opt for single assessment.
Separated couples, whether parents or not, are generally treated as if unmarried — that is, assessed as single persons — but they may, where a legally binding maintenance arrangement is in place, jointly elect to be treated for tax purposes as if the separation had not taken place. The general position in the case of legally enforceable maintenance agreements is that where the couple are treated for tax purposes as if unmarried, a tax deduction for maintenance payments for the benefit of his or her spouse is granted to the paying spouse but the payments are taxed in the hands of the receiving spouse. However, if the couple jointly elect to be treated for tax purposes as if the separation had not taken place, the payer does not receive a tax deduction for the maintenance payments and the receiving spouse is not taxable on them. On the other hand, non-legally binding maintenance payments are not taxable in the hands of the receiving spouse but the paying spouse cannot claim a tax deduction for them.
Maintenance payments in respect of children are not taxable in the hands of the children or the receiving spouse. The effect of this is that the payments are treated the same way as if the taxpayer was providing for the child out of his/her after tax income. This is in line with the tax treatment of all other parents, where the cost of maintaining their children is not tax deductible. Parents who are separated from each other may each claim the one-parent family credit in respect of their child where that child resides with the parent at any time during the year of assessment. However, a man and woman living together as man and wife are specifically excluded by the tax code from entitlement to the one-parent family tax credit. It is possible in certain circumstances for separated persons who jointly elect to be jointly assessed for tax purposes to claim the home carer tax credit. However, in such circumstances and because of the joint assessment, the one-parent family credit may not be claimed by either parent.
Cohabiting parents are treated as single persons and there are no special income tax allowances for unmarried couples living together. The tax system treats members of cohabiting couples, with or without children, as separate and unconnected individuals. Each partner is a separate entity for tax purposes and credits, bands and reliefs cannot be transferred from one partner to the other. The home carer credit may not be claimed by cohabiting couples, as the credit is restricted to married persons who are jointly assessed for tax.
I have held the view consistently that changes in the tax code, for example, to recognise cohabiting couples, should not proceed ahead of changes in the general law. In this regard, I note with interest that the Law Reform Commission has recently published an extensive consultation paper on the rights and duties of cohabitees which deals, among other things, with the issue of taxation. My Department will be examining the recommendations contained in the consultation paper in the weeks ahead.