The Land and Conveyancing Law Reform Act 2009 (the 2009 Act) was enacted on
21 July 2009.

One particular provision which will be relevant to tax advisors is Section 52, which provides that the entire beneficial interest in land will pass to the purchaser on the making of an enforceable contract of sale or other disposition of land.

A ministerial commencement order has appointed 1 December 2009 as the date on which Section 52 will come into operation. Once Section 52 has been commenced, the previous situation which applied in Ireland as a result of the Irish Supreme Court case of Tempany v. Hynes (1976) will be reversed.

The position as established by Tempany v. Hynes was that the beneficial interest in real property only passed in proportion to the amount of the purchase price that was paid.

Under the new provisions, it will be possible for the contract to stipulate that Section 52 does not apply and in that way retain the pre-2009 Act position.

It is likely to take some time before the standard form contracts used by solicitors for property sales are adapted to reflect this change in the law, and great care will need to be exercised by both solicitors and tax advisers to ensure that the property is passing under the contract of sale at the time and in the manner anticipated by clients and their advisors.

For further information please contact Emmet Scully.

October 2009.