The High Court ruled that the transfer of Irish Life Group shares to Canada Life Limited in 2013 was exempt from stamp duty. Mr Justice Tony O’Connor held that the exemption applied because the National Treasury Management Agency (NTMA), if necessary, could have disposed of the shares on behalf of the Minister for Finance under the relevant financial support provisions.
The case came to the High Court by way of a case stated from the Appeal Commissioner. The question was whether the Commissioner was correct in law to find that the transfer was exempt under section 108(b) of the Stamp Duty Consolidation Act 1999. The share transfer form was dated 18 July 2013 and recorded consideration of €1.3 billion.
The shares had been acquired by the Minister after Irish Life’s parent, Irish Life and Permanent Group Holdings, required recapitalisation. A 2012 direction order required the parent company to sell its Irish Life shares to the Minister for €1.3 billion. The Minister later transferred them to Canada Life for the same consideration.
Revenue argued that the €1.3 billion received from Canada Life was not recoupment of financial support “from the credit institution or subsidiary” as required by section 6(4) of the Credit Institutions (Financial Support) Act 2008. It also argued that the Minister’s sale to a third party was not a function that could be delegated to the NTMA.
Canada Life submitted that the Minister’s acquisition of Irish Life was itself financial support to the parent group, and that the sale enabled recovery of the capital invested. It relied, among other things, on the Minister’s statement that he intended to use powers under the 2008 Act to acquire Irish Life and complete the recapitalisation of Permanent TSB.
The court concluded that the 2012 purchase was a form of financial support to the parent group and its subsidiaries. It reasoned that if the NTMA had acquired the shares under delegation, it would have acted under the Minister’s supervision and direction and could have disposed of them when required. Section 6(4), the court said, supported that result without extending the exemption beyond the statutory language.
The court also addressed a second question about whether the sale fell within the Minister’s function of managing the national debt. Although its decision on the first question made that issue moot, the judge agreed with the Appeal Commissioner that it did not: returning money to the Exchequer did not necessarily amount to managing the national debt.
The High Court therefore held that the Appeal Commissioner was correct in law to determine that the transfer was exempt from stamp duty. The judgment concerned the statutory exemption as it then stood; the court noted it was later repealed and replaced by section 73 of the Finance Act 2014.