When property is transferred through an exchange, the parties are considered to have made two separate transfers.

The property that was purchased 10 years ago is taxed at 12% on €100,000 = €12,000.

The other person who had inherited the property at €30,000 is transferring the property at €96,000. He must therefore pay 12% on (€96,000 - €30,000) = €7,920.

Had the property been inherited before 25 November 1992 the tax would have been 7% on €96,000 = €6,720.

When you assign property by emphyteusis or sub-emphyteusis, the ground rent that you receive is taxed as income in accordance with the provisions of article 4 and must be declared in your tax return as income derived from property. Tax will be payable for every year during which you receive the ground rent. Tax on the ground rent is not paid at 12%.

However, if besides the ground rent you also receive a premium, you have to pay tax at 12% on the premium less any allowable deductions.

A redemption of ground rent is taxed at 12% of the amount paid.

As in other cases, if you had inherited the property that you are assigning by emphyteusis, or in respect of which you were receiving ground rent which has been redeemed, and you had inherited the property after 24 November 1992, the taxable amount is reduced by the acquisition value.

The same applies if you had acquired the property through a donation made more than 5 years before you assigned it by emphyteusis, as the case may be.

However, in such cases, the acquisition value is not wholly allowed as a deduction, because you would not be transferring the whole property.

The Tax on Property Transfers Rules, 2006 give more details regarding the calculation of the acquisition value in such cases.

The gain that you make by entering into a promise of sale and then assigning that right to a third party is not taxed in terms of article 5A and is not subject to the 12% tax. It is considered by the law to be profits made from trade or business and is taxable in terms of article 4(1)(a).

In order for it to be valid certain conditions have to be observed and provisional tax at the rate of 7% of the selling price must be withheld (see the Capital Gains Rules, 1993). Such gain has to be declared in the tax return.

Yes, the transfer of property by a company to its shareholders in the course of its winding up is taxable in terms of article 5A just like other transfers.