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Stamp duty on funds

In Ireland, authorised investment funds are divided into two categories: undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs). Funds have been authorised by the Central Bank of Ireland since the Central Bank Reform Act 2010. In recent times, fund structures have become popular methods of holding Irish immoveable property.

Although there is a stamp duty exemption for the transfer, issue, repurchase or redemption of units of a fund, there is no such exemption where the fund is involved in a transaction involving Irish immoveable property.

As with any form of transfer of Irish immoveable property, there will be a charge to Irish stamp duty unless the transfer is exempted or the charge relieved. It is important to understand the legal structure of the property-holding fund, in particular how to identify the acquiring entity within the fund structure, to determine correctly with which entity the liability to stamp duty lies.

This article looks at instances where stamp duty is relevant for a fund, together with the practical issues arising around the related filing and payment obligations. The article also uses a case study to represent a typical acquisition of Irish immoveable property in a fund structure to give a practical demonstration of the associated stamp duty charge and payment obligation and the issues relevant to moving the property within the structure.

This article first appeared in Irish Tax Review, Vol. 30 No. 3 (2017) © Irish Tax Institute