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Monday, 15th April 2024
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Finance Bill changes announced Back  
New securitisation rules are aimed at the development of securitisation business in Ireland.
The Minister for Finance, Charlie McCreevy announced the main elements of this year’s Finance Bill on 21 January. Among the financial tax measures not mentioned in December’s budget speech were changes to dividend withholding tax, extension of securitisation rules and giving a legislative basis for Revenue practice on the exemption from stamp duty on stock borrowing and repo transactions.

The Minister first signaled his openness to changes in dividend tax in an interview with Finance’s sister publication, Finance Dublin, last October (see full story, page 2).

Most of the relatively low level of securitisation has been IFSC-based and this year’s change marks a move towards breaking down the distinct treatments for IFSC and domestic business.

Mr Mc Creevy said in December that he did not see it as a priority to exempt all share dealings from the 1 per cent capital duty. The Finance Act 1995 introduced a stamp duty exemption from the 1 p.c. stamp duty for stock borrowing transactions by member firms of the Irish Stock Exchange. In 1996 this was extended to member firms of the UK Stock Exchange, market makers and nominees of member firms (on either exchange) and market makers. The exemption applies where the stock or equivalent are transferred back to the lender within three months.
The Finance Bill will bring the legislation into line with an April 1999 Revenue statement of practice on the exemption and extend the present authorised lending period from three to six months.

Stock repo transactions will also be exempted on the same basis as stock borrowing transactions.

Other areas where changes will be made in the Finance Bill include tax relief for agreed pay restructuring; an extension for qualifying periods for urban and rural renewal schemes to 31 December 2002; changes to rent and rates relief for the Custom House Docks area and technical changes to Irish non-resident companies provisions and tax credits on company distributions. A number of VAT changes will also be introduced.

No further changes were announced in relation to the taxation of stock options, undistributed profits, SAYE schemes or the recommendations of the Public Accounts Committee in relation to DIRT.

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