INCOME TAX AND DUTY ON DOCUMENTS AND TRANSFERS ON TRANSFERS OF DWELLING HOUSES BY COMMERCIAL PARTNERSHIPS

HOUSES BY COMMERCIAL PARTNERSHIPS EXEMPTION

SUBSIDIARY LEGISLATION 123.58

INCOME TAX AND DUTY ON DOCUMENTS AND

TRANSFERS ON TRANSFERS OF DWELLING

HOUSES BY COMMERCIAL PARTNERSHIPS

EXEMPTION ORDER

16th October, 2001

LEGAL NOTICE 244 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 by

Commercial Partnerships Exemption Order.

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

made by a commmercial partnership constituted under the laws of

Malta to an individual by means of a deed published not earlier

than the 21st November, 2000 and not later than 31st October, 2001

and which satisfies all the following conditions -

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

the said partnerhip and has been a partner of that

partnership without interruption since at least the 20th

November, 2000 up to the date of the transfer;

(b) on the 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 of the

interests or of the voting rights in that partnership;

(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 by Commercial

Partnerships 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 partnership duly

authorised for this purpose

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

2. Date when acquired by the partnership ............................................

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

partnership’s records ...............................................

4. Cost of improvements as recorded in the partnership’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 partnership 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 BY COMMERCIAL PARTNERSHIPS 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 article

4(a).

The exemptions granted by this Order shall be subject to

the following conditions -

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

shall be the cost at which the partnership had acquired

the dwelling house increased by the cost of

improvements incurred by the partnership before the

21st November, 2000 as shown in the records which

that partnership is required to keep in accordance with

article 19 of the Income Tax Management Act

disregarding any revaluation that may have been made

by the partnership 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;

(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 BY COMMERCIAL PARTNERSHIPS 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 all the information specified in that

form. The declarations in the said form shall be signed

on behalf of the partnership by an individual who is

duly authorised for that purpose, by the transferee, by

a certified public auditor and by a notary public 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 October, 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 article 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 article 4 notwithstanding any renunciation or reservation

made by any person.

HOUSES BY COMMERCIAL PARTNERSHIPS 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 partnership to

sign this declaration.

Signed for and on behalf of the partnership by (name of individual) ................

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 ......................................................

Part C

HOUSES BY COMMERCIAL PARTNERSHIPS EXEMPTION

Description of the interests and voting rights in the partnership

Declaration to be made and signed on behalf of the partnership by an individual who is duly

authorised for such purpose and by the transferee

Name of partner

Description of

Voting rights held (as

Relationship to

interests held

a percentage of total

transferee (if any)

voting rights)

Signed for and on behalf of the partnership by (name of individual) ................................

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

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

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

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

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

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

Part D

Declaration to be made and signed on behalf of the partnership by an individual who is duly

authorised for this purpose and by the transferee

We declare that on 20 November 2000 and up to today ...................... occupied the dwelling

house in question as his/their sole ordinary residence and that the said occupier/s is/are related

to the transferee as follows: .....................................................................................................

Signed for and on behalf of the partnership by (name of individual) .....................................

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

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

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

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

Part E

Declaration by Notary Public

I declare that the declarations in Parts A, 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 by Commercial Partnerships (Income Tax and Duty on Documents and

Transfers) Exemption Order.

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

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

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

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

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