S.L. 123.92 Art. 7Emphyteutical concessions and concessions of other rights over property.

(1) The transfer value of an emphyteutical concession and of a concession of any other right over property shall be the higher of (i) the premium or any other capital sum payable for the concession and (ii) the sum determined as follows:

(a) in the case of a concession of perpetual emphyteusis, the market value that the property in question would have if it was not subject to emphyteusis reduced by a sum equal to twenty times the annual ground rent, disregarding any adjustments to which the said ground may be subject to in terms of the relative deed;

(b) in any other case, the premium or any other capital sum that would be payable if the concession were granted on the open market, after taking into account the ground rent or other periodical payment and all the other terms of the actual concession.

(2) In determining the acquisition value for the purpose of article 5A(5)(b) of the Act, a concession of perpetual emphyteusis or of emphyteusis for a period of more than fifty years shall be treated as if it were a transfer of the property over which the emphyteusis is granted.

(3) For the purposes of article 5A of the Act, the acquisition value of an emphyteutical concession for a period that does not exceed fifty years and the acquisition value of a concession of any other right over property shall be deemed to be zero.

(4) When ground rent is redeemed in full or in part, the transfer value shall be the consideration payable for the redemption.

(5) When ground rent is redeemed and, at the time immediately preceding the redemption, the owner of the is directum dominium not the person who had made the emphyteutical concession in question, the acquisition value of the right transferred on the redemption shall be the acquisition value of the directum dominium determined in accordance with rule 4: provided that where the ground rent is redeemed in part, the said acquisition value shall be reduced proportionately.

(6) For the purposes of article 5A of the Act, and except as provided in sub-rule (5), the cost of acquisition of property in the case where there is a redemption of the ground rent or of any other right over that property shall be deemed to be zero.

(6A) When a person who had acquired property under a title of perpetual emphyteusis or an emphyteusis that had been granted for a period exceeding fifty years ("the original acquisition") acquires also the ("the second acquisition"), directum dominium perpetuum and he subsequently transfers that property, the date of the second acquisition shall be disregarded and that person shall be deemed to have acquired the transferred property on the date of the original acquisition.

(6B) When a person who had acquired property under a title of emphyteusis that had been granted for a period of fifty years or less ("the original acquisition") acquires also the for directum dominium the remaining period as well as the full ownership ("the second acquisition"), and he subsequently transfers that property, the date of the original acquisition shall be disregarded and that person shall be deemed to have acquired the transferred property on the date of the second acquisition.

(7) When ground rent is redeemed by means of a schedule of redemption, the Registrar of Courts shall deduct from the deposit an amount equivalent to 10% of the sum payable for the redemption, and shall remit that amount to the Commissioner. The Commissioner shall keep the amount so remitted in a suspense account until the final payment of the tax is made in accordance with sub-rule (8) or (9).

(8) Subject to sub-rule (9), when a person withdraws money deposited in court for the redemption of the ground rent, he may make a declaration to the Commissioner of the tax due on the redemption in accordance with article 5A of the Act and these rules on such form and in such manner as the Commissioner may accept. Upon the receipt of any such declaration, and after making any ascertainment that he may consider necessary, the Commissioner shall withdraw from the suspense account referred to in sub-rule (7) an amount equivalent to the tax due on the said redemption in settlement of that tax. Any balance in the suspense account shall be remitted to the person who makes the declaration upon proof being submitted that he was the person entitled to make the withdrawal.

(9) If a declaration as is referred to in sub-rule (8) is not made within thirty days from the date of the withdrawal, the amount remitted in accordance with sub-rule (7) shall be deemed to represent the final tax due on the redemption and the Commissioner may withdraw that amount from the suspense account in settlement of that tax.

(10) The Registrar of Courts shall make the remittance as required by sub-rule (7) together with a notice on the form prescribed in Schedule H within fifteen working days from the date when the schedule of redemption is filed. The Registrar of Courts shall attach a copy of the schedule of redemption to the notice. The Registrar of Courts shall, moreover, notify the Commissioner of any withdrawal referred to in sub-rule (8) by means of the delivery of the form prescribed in Schedule I within fifteen working days from the date of the withdrawal.

(11) The Commissioner and the Registrar of Courts shall be indemnified against any person whatsoever for any amount deducted, remitted, withdrawn or received in accordance with this rule.

(12) The provisions of this rule in respect of an emphyteutical grant and the redemption of ground rent shall apply mutatis to a concession of sub-emphyteusis and the redemption of mutandis sub-ground rent.

(13) This rule shall be without prejudice to the tax chargeable under article 4 of the Act on any ground rent or other income arising pursuant to any concession of a right over property.

(14) Notwithstanding the provisions of articles 5(5)(g) and 5A(4)(i) of the Act, an assignment of property on emphyteusis for a period of fifty years or less shall not be exempt from the tax chargeable under article 5A of the Act.