The Commissioner for Tax and Customs has issued a clarification regarding the tax and duty implications associated with the transfer of gravesites, confirming that gravesites transferred inter vivos or causa mortis may be subject to both duty and income tax.
A gravesite is immovable property, and its sale or inheritance is therefore subject to duty under the Duty on Documents and Transfers Act and income tax (where applicable) under the Income Tax Act. The duty is chargeable at 5% on the higher of the consideration and the market value, whilst the income tax is chargeable at the rates stipulated in Article 5A of the Income Tax Act.
Where the value of property declared on a deed of transfer or on a deed causa mortis is, in the opinion of the Commissioner, less than its market value, the Commissioner has the power to determine by order in writing the amount of the duty chargeable and shall raise an assessment accordingly for the duty on the difference (between the declared value and the value determined by the Commissioner) together with additional duty and interest. Similarly, the Commissioner has the power to issue an order in writing to the transferor stating the tax that should be chargeable and additional income tax. This applies to gravesites as it does to all other immovable property.
The market value of property depends on various factors, but it is the Commissioner’s view that the typical value of a gravesite is currently never less than €8000. When the declared value of a transfer inter vivos or causa mortis of a gravesite is less than €8000, it will likely be considered by the MTCA as an under-declaration, and action will be taken for the collection of the correct amount of duty and income tax.
The value of €8000 reflects the bottom of the range of current market prices. Therefore, this notice is not setting the market value of all gravesites at €8,000. Furthermore, the Commissioner reserves the right to review this bottom estimate in the event of changes in the market conditions or in cases presenting particular circumstances.
Taxpayers who disagree with an assessment raised by the Commissioner have the right to object in accordance with the provisions of the said Acts.
Disclaimer
The above does not constitute tax or legal advice and is up to date on the date it was published. Please ensure that you take appropriate advice from tax or legal professionals before making any decisions based on the above.
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