On Tuesday 22 June 2021, the Government published the Finance (Covid-19 and Miscellaneous Provisions) Bill 2021. The Bill includes amendments to existing supports which were announced in the Economic Recovery Plan 2021. We have summarised the provisions below and look at the BRSS (section 5) and Stamp Duty (section 13) measures based on our preliminary review of the Bill.
You can read the Explanatory Memorandum here.
Section 5 of the Bill includes legislation for this new scheme which is intended to support businesses that were significantly impacted throughout the COVID-19 pandemic as referenced above. The section inserts a new section 485A into Chapter 2 of Part 15 of the Taxes Consolidation Act (TCA) 1997.
BRSS is available to affected self-employed individuals and companies who carry on a trade, the profits of which are chargeable to tax under Case I of Schedule D. It is also available to persons who carry on a trade in partnership, and any trading activity carried on by charities and sporting bodies.
To qualify under the scheme, the turnover of the business during the period from 1 September 2020 to 31 August 2021 must be no more than 25% of its turnover when compared to the reference period. The reference period is dependent on the date that the business commenced its relevant business activity. For most businesses, the reference period will be 2019 but it will be a later period if the business was established on or after 26 December 2019.
Qualifying taxpayers can claim “an amount equal to three times the amount as derived by 10% of their average weekly turnover during the reference period” up to €20,000 and 5% thereafter, subject to a maximum payment of €15,000. Payments made under the scheme will be treated as an advance credit for trading expenses.
To make a claim under the scheme, a number of other conditions must be satisfied including that the person; has an up-to-date tax clearance certificate; has complied with their VAT obligations; is not entitled to make a claim for the CRSS scheme in respect of any week that includes 1 September 2021; and the business is actively carrying on its trade and has an intention to continue to do so. Claims for the BRSS must be made through ROS and claimants are required to complete a declaration that they satisfy the conditions of the BRSS. Provision is made for the publication of the names of claimants of BRSS on Revenue’s website.
The Institute will update members on Revenue guidance regarding this measure when it is published.
As outlined above, Section 13 of the Finance (Covid-19 and Miscellaneous Provisions) Bill 2021 gives statutory effect to the Financial Resolution that was passed on 19 May 2021 inserting a new section 31E into the Stamp Duties Consolidation Act (SDCA) 1999. The measure is intended to disincentivise the purchase of multiple residential units by a single corporate entity or individual.
The measure imposes a 10% rate of stamp duty on the acquisition, on or after 20 May 2021, of residential units where an aggregate of 10 or more such units is acquired during a 12-month period. The stamp duty rate that normally applies to the acquisition of residential property is 1% of the value of property up to €1 million and 2% of the value that exceeds €1 million. The new 10% rate of stamp duty applies in respect of the acquisition of residential units, such as houses and duplexes but not apartments. There is a 3-month transition period provided for the execution of contracts that were entered into but not completed prior to 20 May 2021.
The stamp duty charging provision in section 13 (12) of the Bill (previously subsection 10 of the Financial Resolution of 19 May 2021) has been amended. The provision changes the usual Head of Charge (in Schedule 1 to the SDCA) that would apply to the transfer of shares to the extent that they derive value from ‘relevant residential units’. Where subsection 12 applies, the Head of Charge ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance’ will apply as respects that part of the value of the shares that is derived from a ‘relevant residential unit’.
New measures included in the Bill, which were not included in the Financial Resolution of 19 May 2021, provide for an exemption from the new 10% rate of stamp duty where; residential units are leased to local authorities for certain social housing purposes; and also to situations where a residential unit is acquired and immediately leased to a housing authority for use in the provision of social housing support.