This includes goodwill, the benefit of contracts and commercial real estate. The stamp duty rate has been reduced considerably from a top rate of 6% to a lower flat rate of 2%. This new rate of 2% will now apply to transfers executed on or after December 7 2011. While the focus of this reduction in stamp duty has mainly related to a hoped for stimulus for the Irish real estate market, the reduction will also have an important and positive impact on the structuring of Irish corporate acquisition (M&A) transactions, as asset sales in Ireland will now be significantly more attractive in stamp duty terms than previously. The stamp duty costs of an asset purchase at the new reduced rate of 2% of the consideration for chargeable assets (for example, goodwill) can now compare more favourably to the 1% stamp duty on a share purchase. This is particularly the case as not all business assets purchased as part of an asset purchase may be chargeable assets (subject to the 2% charge) but the entire purchase price for a share purchase will be subject to the 1% charge. The stamp duty reduction is therefore a positive measure which gives more commercial flexibility in structuring the acquisition of Irish businesses.
Gerry Thornton (gerry.thornton@mop.ie) and Caroline Austin (caroline.austin@mop.ie)
Matheson Ormsby Prentice
Tel: +353 1 232 2000
Website: www.mop.ie
