INCOME TAX AND DUTY ON DOCUMENTS AND TRANSFERS ON TRANSFERS OF DWELLING HOUSES TO SHAREHOLDERS EXEMPTION

HOUSES TO SHAREHOLDERS EXEMPTION

SUBSIDIARY LEGISLATION 123.54

INCOME TAX AND DUTY ON DOCUMENTS AND

TRANSFERS ON TRANSFERS OF DWELLING

HOUSES TO SHAREHOLDERS EXEMPTION

ORDER

15th May, 2001

LEGAL NOTICE 124 of 2001, as amended by Legal Notice 409 of 2007.

(1) The title of this Order is the Income Tax and Duty on

Documents and Transfers on Transfers of Dwelling Houses to

Shareholders Exemption Order.

(2) This Order applies to any transfer of a dwelling house

made by a company to an individual by means of a deed published

not earlier than the 21 November, 2000 and not later than 30th

September, 2001 and which satisfies all the following conditions -

(a) the transferee is on the date of the transfer a

shareholder in the said company and has been a

shareholder of that company without interruption since

at least the 20th November, 2000 up to the date of the

transfer;

(b) at 20th November, 2000 and up to the date of the

transfer the transferee alone or together with a member

or members of his family held directly or indirectly an

aggregate of at least twenty percent in nominal value

of the shares or of the voting rights in that company;

(c) at 20th November, 2000 and up to the time of the

transfer the transferee or a member of his family

occupied without interruption the dwelling house as

his sole ordinary residence.

Information and Declarations for the purposes of the Income Tax and Duty on

Documents and Transfers on Transfers of Dwelling Houses to Shareholders

Exemption Order

Part A

Description of the dwelling house and the transfer value information to be supplied and

declaration to be made and signed by an individual who is an officer of the company duly

authorised for this purpose

1. Address .......................................................................................

2. Date when acquired by the company ............................................

3. Cost at which the property was acquired by the company as recorded in the

company’s records ...............................................

4. Cost of improvements as recorded in the company’s records ........

5. Deemed transfer value (3 + 4) ......................................................

In this Order -

(a) a member of the family of the transferee means his

spouse, ascendant, descendant, brother or sister, or a

descendant of his brother or sister;

(b) "dwelling house" includes a garage attached to or

underlying that house or a garage of not more than 30

square meters situated within 500 meters of that house

and transferred by the said company to the transferee

by means of the same deed with that house.

Upon a transfer to which this Order applies -

(a) if the use of the dwelling house by the occupier or

occupiers up to the date of the transfer is deemed to

constitute a benefit by reason of an employment or

office in terms of article 4(1)(b) of the Income Tax

Act, no tax shall be chargeable under that Act on the

HOUSES TO SHAREHOLDERS EXEMPTION

value of the said benefit;

(b) if the transfer constitutes a benefit by reason of an

employment or office in terms of the said article

4(1)(b) of the Income Tax Act, no tax shall be

chargeable under that Act, on the value of the said

benefit;

(c) no gain shall be deemed to arise from the said transfer

for the purposes of article 5 of the Income Tax Act;

(d) no duty shall be chargeable in terms of article 32 of the

Duty on Documents and Transfers Act in excess of

€2.50 for every €100 or part thereof of the deemed

transfer value determined in accordance with

regulation 4(a).

The exemptions granted by this Order shall be subject to

the following conditions -

(a) the deemed transfer value referred to in regulation 3(d)

shall be the cost at which the company had acquired

the dwelling house increased by the cost of

improvements incurred by the company before the 21st

November, 2000 as shown in the records which that

company is required to keep in accordance with article

19(4)(a) of the Income Tax Management Act

disregarding any revaluation that may have been made

by the company of the value of the said property;

(b) if the actual consideration for the transfer is less than

the deemed transfer value determined as aforesaid the

shortfall shall not be treated as a loss for any of the

purposes of the Income Tax Act and the amount of the

shortfall shall, moreover, be deemed for the purposes

of that Act to be a dividend paid by that company to

the transferee out of the untaxed account and the

provisions of article 59(5) and of article 62 and the

other relevant provisions of that Act shall apply

accordingly;

(c) for the purpose of determining the capital gains in

terms of the Income Tax Act arising upon a subsequent

transfer of the dwelling house in full or in part by the

transferee, the cost of acquisition of the dwelling

house shall be deemed to be the deemed transfer value

as determined in accordance with paragraph (a), and

notwithstanding the provisions of article 5(10)(b) and

(c) of the said Act, no capital loss resulting from or

bad debt incurred in relation to any other transfer shall

be set off against any capital gains determined as

aforesaid;

HOUSES TO SHAREHOLDERS EXEMPTION

(d) when the parties to the transfer wish to avail

themselves of the exemptions granted by this Order

they shall make and give in a form supplied by the

Commissioner the declarations and all the information

specified in the Schedule to this Order. The

declarations in the said form shall be signed on behalf

of the company by an individual who is an officer of

that company duly authorised for that purpose, by the

transferee, by a notary public and by a certified public

auditor as specified in the said Schedule and the form

shall be delivered to the Commissioner of Inland

Revenue together with the notice relative to the deed

required in terms of article 51 of the Duty on

Documents and Transfers Act and the Duty on

Documents and Transfer Rules, within the time limit

prescribed for the delivery of that notice: provided that

in the case of a transfer made before the date of this

Order the said form shall be delivered to the

Commissioner at the Capital Transfer Division of the

Inland Revenue Department, Valletta, by not later than

the 31 July, 2001;

(e) the parties to the deed shall furnish to the

Commissioner

such

further

information

and

documents as he may at any time reasonably require

for ascertaining the eligibility to the exemptions

granted by this Order;

(f)

in the event that any condition set out in this regulation

is not fulfilled or that any information or declaration

given or made for the purposes of this Order results to

be incorrect in any material respect, the exemptions

shall be forfeited;

(g) this Order shall have such retroactive effect as may be

necessary to give effect to the exemptions granted

herein with respect to any transfer to which this Order

applies made before the date of this Order.

The exemptions granted by this Order may not be availed

of in part, and when they have been validly availed of all the parties

to the transfer shall be deemed to have accepted the conditions set

out in regulation 4 notwithstanding any renunciation or reservation

made by any person.

HOUSES TO SHAREHOLDERS EXEMPTION

Value of consideration payable by the transferee for the transfer...

Excess (if any) of the deemed transfer value (as in 5) over the consideration (as in 6)

I declare that the above information is correct and that I am authorised by the company to

sign this declaration.

Signed for and on behalf of the company by (name of officer) ................

Designation ....................................

Address .................................................................................................

Identity document number ....................................

Signature .....................................

Date ...........................................

Part B

Declaration by Certified Public Auditor

I declare that the information given in Part A corresponds to the relevant records of

................................................................ for the financial years ending

Signed by (name of Certified Public Auditor) ........................................

Address .................................................................................................

Signature ...............................................

Official Stamp ........................................

Date ......................................................

HOUSES TO SHAREHOLDERS EXEMPTION

Part C

Declaration to be made and signed by an individual who is an officer of the company duly

authorised for the purpose

To be made only in the case of an excess to which item 7 of Part A refers

I declare that the amount of ........................ is being accounted for by the company for the

purposes of the Income Tax Act as representing a dividend paid to .......................................

(the transferee) out of its untaxed account and that the company has undertaken to comply

with the provisions of article 59(5) and of article 62 and all the other provisions of that Act

relevant to the payment of a dividend out of its untaxed account.

Signed for and on behalf of the company by (name of officer) .........................................

Signature ...................................................

Date .........................................................

Part D

Description of shareholding and voting rights in the company

Declaration to be made and signed by an individual who is an officer of the company duly

authorised for such purpose and by the transferee

Name of shareholder

Number of

Nominal

Number of

Any

Total nominal

shares held

value of each votes attached

relationship

value of

(*)

share

to each share

to transferee

shares held

Total share capital

(*) Shares of a different class are to be indicated separately

Signed for and on behalf of the company by (name of officer) ................................

Signature .......................................

Name of transferee ..............................................................

Address .................................................................................................

Identity document number .....................................................................

Signature .............................................

Date ....................................................

HOUSES TO SHAREHOLDERS EXEMPTION

Part E

Declaration relating to the residence

Declaration to be made and signed by an individual who is an officer of the company duly

authorised for such purpose and by the transferee

We d e c l a r e t h a t o n 2 0 t h N o v e m b e r 2 0 0 0 a n d u p t o t o d a y . . . . . . . . . . . . . . . . . . . . . . .

............................... occupied the dwelling house in question as his/her/their sole ordinary

r e si d en c e a n d t h a t t h e s ai d o c c u p i e r / s i s/ a r e r el a t e d t o t h e t r a n s f e r e e a s f o l l o w s

Signed for and on behalf of the company by (name of officer): .............................

Signature...................................

Name of transferee .................................................

Address .................................................................................................

Identity document number .......................................

Signature .......................................................

Date .............................

Part F

Declaration by Notary Public

I declare that the declarations in Parts A, B (where applicable), C and D have been signed in

my presence after that I, Notary, explained to the signatories the purport thereof and of the Tax

on Transfers of Dwelling Houses to Shareholders (Income Tax and Duty on Documents and

Transfers) Exemption Order.

Signed by (name of Notary Public) .............................................................

Address ........................................................................................................

Signature ..............................................

Official Stamp ......................................

Date ...................................