Who is responsible for calculating stamp duty owed?

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Mush

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Who is responsible for calculating the stamp duty due on the purchase of a house? The government web site Oasis says "Your solicitor will calculate how much stamp duty is due and request this from you prior to the closing of the sale."

I bought a house in March. As I am a first-time buyer - and mine is the only name on the deed - my solicitor calculated the stamp duty due as being zero.

With the "clarification" by the Revenue last week, it seems that I may be liable for stamp duty as there is a second person on the mortgage. I think I meet the conditions set out by the Revenue in last week's update, however, I am awaiting feedback from my solicitor.

Who is responsible for calculating the stamp duty? I acted on the professional advice of my solicitor. Does that matter to the Revenue?

Thanks in advance

Mush
 
your solicitor does indeed, calculate the stamp duty payable. however, in light of revenue's recent change in policy, i'm not sure if you qualify for stamp duty repayments. acting on your solicitor's advice is all well and fine but this does not matter to revenue. ignorance of the requirements is no defence and if they feel you qualify for stamp duty they'll hit you up for it regardless. the question is, are you liable? best thing you can do is wait for a response from your solicitor. if you feel you meet the requirements for exemption as set out by revenue and your solicitor confirms this, then you will probably be ok. however, if revenue comes back to you to claw back stamp duty in the future, there's very little you can do about it. i would have thought that in this situation, where large amounts may be owing, they would have to accommodate people with some sort of repayment plan, as very few people will have thousands sitting around with which to foot a large tax bill, however, i could be totally wrong about this.

if you want to phone revenue and inquire about it in a general sense, you could try this, but i would avoid giving personal details in case this alerts them to you!
 
Thanks for your response. It seems the Revenue can do whatever they want. What I find strange is that they are not referring to it as a change in policy that will apply going forward. It seems to be a "clarification" that applies retroactively!
If the position had been clear to me - and my solicitor and bank manager - in March when I bought the house, the other person would not be on the mortgage. I engaged in a transaction on a certain premise, and it turns out that premise is incorrect.
I'm wondering how solicitors feel about this change/clarification. They have advised individuals that their stamp duty calculation is zero and now from what the Revenue say, their clients may be liable for substantial stamp duty. Will they be writing to their clients to let them know that they may have made incorrect calculations? Will they be accepting any liability for the advice they provided?
Also, how are the banks reacting as in many instances they request/encourage that a parent or someone else goes on the mortgage to help the FTB secure the required level of mortgage?
Only that I read the papers and check this forum, I would not be aware that there is a chance I may no longer be deemed a FTB.
My solicitor has been notably silent. I have read the Revenue criteria and am relieved as I feel I still qualify, but will need my solicitor's advice in order to be sure. The thing is that even if my solicitor advises that I do meet the criteria, this won't help if the Revenue comes knocking and determines that I don't meet the criteria!! Makes you wonder why you pay for the advice in the first place.

I'm just overwhelmed at the thoughts of having to pay €15,000 (that I don't have) to the Revenue when I am a FTB who is the legal and benefical owner of the property.

Thanks again
 
yep, that's about the long and short of it. when it comes to revenue they can do whatever the hell they want. your solicitor is not liable since the advice they provided at the time was correct. i think it's outrageous that revenue can introduce a retrospective policy change that could potentially cost already cash-strapped FTBs thousands. i imagine if they decide to chase you for the money they'll be writing to you. now i'm no expert but i just can't see it happening on a grand scale - there'd be a public uproar!! it can't be legal! you made a purchase in good faith and in accordance with the law of the land as it was at the time. i just can't see them making this one work.

anyway, all you can do is wait and see. i guess your solicitor is remaining quiet just now cos he/she isn't sure themselves of the impact this could have on your particular situation. a lot of it is rumour and speculation at the moment so until revenue starts to take action no-one will know who they're going to hit up with a tax bill. fingers crossed for you.
 
Thanks a million for your input. I too think that it's outragous, but I'm going to try not to worry about it for now. Hopefully, it'll blow over and things will become clearer. Hey - my solicitor may even call me back!!

I appreciate that some people are against the FTB exemption and others are in favour. What I don't get is how the Revenue can shift the goalposts after the game has been played and deem that the score is changed.

I have spoken to some solicitors and a bank manager that I know and they too find it outrageous. We have all acted on the basis of a rule that has now been retroactively changed. Are we supposed to act like this is cool?

Anyway, thanks again for your help.
 
While I feel the Revenue will recant on this, the problem that arises is that they have a very autocratic and technical view on this. From the technical perspective I think they are 'right' as in they authored the thing in the first place.

What it raises is the sheer complexity that they add to matters and perhaps people will realise from this saga, that they are at this all of the time.

For example, the simple claim for home loan interest has a major potential sting if people are not clear on what the Revenue mean by 'purpose'.
 
Re: Who is responsible for calculating stamp duty - tax relief?

Thanks WizardDr. It is certainly complicated. I'm at a bit of a loss as to what to do. There is another person on the mortgage but they are "not contributing to the repayment of the mortgage".

However, the bank automatically sent both of us those TRS1 forms to claim Tax Relief at Source. The forms were printed by the bank - one each - so we both completed them. They were sent to the Revenue about a month ago. The timing probably couldn't be worse.

Does a person on a mortgage have a right to claim tax relief at source? Will the claim of the tax relief contravene the new criteria issued by the Revenue last week? The other person was joined at the request of the bank for the "purpose of providing additional security" (my salary helped me stretch quite far, but not far enough).

If it now transpires that the other person shouldn't be claiming the tax relief, I'm a bit uncomfortable with the thoughts of having to go to the Revenue to try to take back one of the forms recently submitted!

It really is a quagmire.
 
i really do think its outrageous the way they are handling this. A common sense approach would be to issue a clarification on their position which will allow new buyers to easily identify the criteria and determine if they are entitled to the FTB stamp duty exemption for all future transactions. A law should only be applied retrosepectively when there is clear evidence that it has been delibarately abused but this is not the case here - if the Revenue were to proceed with this they would be stinging many FTBs who could barely afford their house and so may have needed their parents name on the mortgage (but NOT the deeds). Sure there are some people out there abusing this but its a minority.

If I were you and I got a bill for 15k I would obstruct the payment process as long as possible - they would have to take me to court to get it out of me so at least thered be plenty of negative publicity.

I would also look at suing my solicitor. You don't pay them for the act of filling out some forms, you pay them to use their knowledge to ensure everythin is completed correctly and you have fufilled all your obligations. If I pay a structural engineer to design supports in my house and they fail I will sue him, same applies here if the solicitor is to blame for something that costs you money I would sue as they have professional idemnity insurance.
 
What if the structural engineer designs supports for your house, and then after your house is built, the council decides to retrospectively change the building regulations so that your house no longer complies with the building regulations- would you sue him then? The answer is always sue the solicitor, isn't it?
 
totally different scenario Vanilla - the Revenue are not changing anything, they are merely clarifying the correct interpretation of the existing laws.

If I pay a solicitor to identify my liability, it is their professional duty to correctly interpret the law and advise me accordingly. If the Revenue subsequently charge me 15k due to my solicitor's failings the logical step is for me to sue the solicitor.

If the structural engineer designs the house and the building regs are subsequently changed so that they deem the design illegal that is one thing. However, if the engineer designs the house and the authorities come and inspect it and tell me it is illegal based on the correct interpretation of CURRENT regulations then the logical step is also to sue the engineer.
 
MOB said it better than I could in a thread in this forum entitled 'flat rate conveyancing'. Solicitors don't, as far as I am aware, have psychic powers. However it doesnt take a psychic to predict that as usual, many will try to blame the solicitor.
 
If any one is to blame, it's the Revenue for either (a) not clarifying the position before now. The banks, the solicitors and the buyers had the one understanding of the position regarding the FTB exemption, but the Revenue is now saying that understanding is wrong, or (b) plucking this new interpretation from the air and expecting it to apply retroactively.

Solicitors must be upset. If a solicitor provides professional advice to a client and the client relies on that advice and pays the solicitor a fee, it is reasonable for the client to expect the solicitor to standover the advice. It's not a question of blame, it's a question of accountability for your actions/advice.

I hope that the solicitors take it up with the Revenue because it is a bolt from the blue. Solicitors and banks are not fools. In their professional judgment, they believed the position to be a certain way. The Revenue are marching in with revisionist history.
 
OhPinchy said:
I would also look at suing my solicitor. You don't pay them for the act of filling out some forms, you pay them to use their knowledge to ensure everythin is completed correctly and you have fufilled all your obligations. If I pay a structural engineer to design supports in my house and they fail I will sue him, same applies here if the solicitor is to blame for something that costs you money I would sue as they have professional idemnity insurance.
Click to expand...

In order to sue successfully, it is essential to prove negligence on the part of the defendant. This is easier said than done at the best of times but given the almost universal shock and surprise in the media and elsewhere at the recent Revenue statement, it would be odd if a solicitor was deemed to be negligent for failing to anticipate the Revenue decision.
 
Lets be clear about this, the Revenue are not changing things retrospectively ..all the garbage that Revenue is pointing out was in the detail already. What people need to do is realise just how sagas like the Non Resident Accounts started off. Revenue laid out the legislation ..did nothing about it for years. Get a kick in the transom from the Oireachtais..mislead the Oireachtais by saying that they could not inspect the accounts (true) but not saying that they could inspect declarations. Central Bank picked as victim Revenue get off with caution and now have size 12 shoes and long pants ... and they own the place.

Its time people realsied that the Revenue are effectively out of control.
 
Hi WizardDr.

" the garbage that Revenue is pointing out was in the detail already"

It wasn't; not really. actually not at all. Revenue are actually now saying that they are going to assume that someone who part funds (or simply co-signs) the mortgage on a property is a part owner of it. Even where someone part funds a mortgage but says openly that they do not have an ownership interest of any sort, Revenue say

"we won't take your word for it - we will only believe you if (among other things) you can show that the lender asked for you to be on the mortgage".

To take this to its logical conclusion, imagine the following scenario:

1. Father co-signs mortgage, without being asked by the bank to do so.

2. Father signs acknowledgement that he has NO interest in the property

3. Father falls out with daughter and seeks to claim share of property.

In this scenario, the father would be laughed out of court. But that is not good enough for the Revenue. As far as they are concerned, for Stamp Duty purposes, he is still a part owner. This is wild stuff.


The presumption in law that someone has an ownership share, even if they are not the registered owner, arises out of a legal construct known as a resulting trust. It is a complicated area of law, but where a presumption of a resulting trust arises, the presumption can be rebutted by the apparent beneficiary simply confirming that he\she does not have an interest. Everywhere except in Dublin Castle.

The entertainment doesn't end with the FTB relief. There are a load of other reliefs out there waiting to be re-interpreted. Here are a few:

1. Ordinarily, if a farmer\businessman over 55 gifts or sells his farm\business to his child, there is no CGT because of Retirement Relief. What happens if the child is buying out the parent and gets a mortgage in joint names with child's spouse? If Revenue apply the EXACT SAME LOGIC to this scenario, then retirement relief on a disposal to a child must now be refused.

2. There is an exemption from Gift Tax, Stamp Duty and Capital Gains Tax on a gift of a site to a child. If the child is getting a mortgage in joint names with spouse, then even if the site is in child's sole name, presumably all these reliefs must now be withdrawn. That is the inevitable consequence of applying the exact same logic.

3. There is a Gift Tax relief on a transfer of a house to somebody who has been living in it for x number of years, provided they own no other house, continue to live in it etc. But if that person gets a mortgage to fund the transaction (and perhaps some improvements) and has to borrow in joint names with a new spouse, who hasn't lived in the house long enough to get the Gift Tax relief, then the relief must be taken away. Who cares if the spouse isn't actually a transferee? Didn't he sign the mortgage? Isn't that enough for Revenue to decide who the owner is?

Make no mistake folks; some bright spark in Revenue has opened up a real Pandora's box here.
 
Pandora's box it is. Do the Revenue do this sort of thing often? I'm surprised there is not more controversy about it. People do seem outraged, but can/will anything be done?

Did an individual in the Revenue dream this up and push it through, or is it part of some overall plan to try to get house prices to level off? I thought the aim of the budget change was to enable FTBs to get their foot on the ladder (though it does seem to have had the advserse effect of drawing houses formerly going for €270,000/€280,000 towards the magnet of €317,500).

It really does seem ridiculous that someone on one hand can have no legal right in a property (and no assertable beneficial right), but have to pay tax on the purchase price.

Do the Revenue think this revised position will net them buckets of extra tax proceeds? It certainly doesn't win them favour with the banks, the solicitors and the house owners and want-to-be owners.

As for having to show that the lender asked for another person to go on the mortgage, how would this be proven? My bank manager told me on the phone that my salary would only stretch so far and I needed another person to get the mortgage. Is this sufficient?

The devil is in the detail and it seems the Revenue were either negligent for not making this clear before, or are being intentionally cruel now trying to re-invent the past and may others pay.
 
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