Finance Bill 2017

CTS Budget 2018 Briefing

The Finance Bill was published yesterday. The Bill gives effect to the measures introduced in the Budget last week. Our summary of the Budget changes can be read in our Budget 2018 newsletter.

The Finance Bill has also provided for a number of additional measures including:

Stamp Duty

The Finance Bill provides for some transitional measures to avail of the 2% rate of stamp duty on commercial property transactions. Where a binding contract was in place before 11 October 2017 and the Deed is executed on or before 31 December 2017, the 2% rate of stamp duty will apply.

The Finance Bill has also made changes to Consanguinity Relief, which reduces the stamp duty rate to 1% in respect of farm transfers within the family, by removing the upper age limit of 67.  It is somewhat disappointing that the consanguinity relief provisions have not been extended to other inter-family transfers of commercial property which may prevent early business transfers.


Anti-Avoidance Provisions

Certain anti-avoidance provisions can apply where gains or income arise to non-residents (including trusts, companies and individuals) in circumstances where Irish residents have an interest in the income or gains. In such cases, Irish tax may be imposed on Irish residents who are deemed to have an interest in the income or gains.

Finance Act 2015 and Finance Act 2016 amended the relevant legislation such that the anti-avoidance legislation would not be triggered if it was proven to the Revenue Commissioners that the transactions giving rise to income or gains of the non-resident were undertaken for bona fide commercial purposes and were not part of an arrangement, one of the main purposes of which, was to avoid tax.

The amendments have been deemed incompatible with EU law and therefore further amendments are proposed in Finance Bill 2017. In this regard, where the non-resident to which the income or gains accrue is resident in an EU or EEA territory, Finance Bill 2017 has removed the requirement for a taxpayer to prove that the transactions are bona fide commercial and are not part of an arrangement to avoid tax. Instead, the taxpayer must only show that the non-resident carries on “genuine economic activities” where they are tax resident.

Proving genuine economic activity should be less onerous than the current requirements, however the term genuine economic activity has not been defined for the purpose of these amendments and therefore ambiguity remains.


Capital Acquisitions Tax

In Finance Act 2016, significant changes were made to the Private Dwelling exemption under Section 86.  The exemption was available on gifts and inheritances of dwellings, subject to conditions.  Section 86 CATCA has been further amended in Finance Bill 2017 to provide that the Dwelling House Exemption will not be withdrawn if a donor dies within two years of a gift of a dwelling house to a dependant relative. In addition, the legislation has been amended to provide that a disponer is not required to have occupied the property as their only or main residence at the date of his or her death where the property is acquired by a dependant relative by way of inheritance. In our detailed analysis of the Finance Bill provisions (to follow in due course), we will summarise the circumstances in which Section 86 relief will be available going forward.



The Finance Bill clarifies the application of the VAT exemption to educational services and vocational training. In line with a Revenue eBrief issued earlier this year, it is now clear that a body providing vocational training does not need to be “a recognised body” in order to qualify for the exemption. However, it appears from the wording of the Finance Bill that only vocational training provided by a “body”, rather than an individual, can qualify for the VAT exemption.


We will provide a comprehensive overview of the Finance Bill measures in due course once we have studied the provisions in detail.

Thanks to everyone who attended our recent Budget Briefing. It was another successful year and we enjoyed a great turnout. Some photos of the event can be viewed below.




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