The Gazette 1987

GAZETTE

MARCH 1 9 87

the reversion to a third party, the third party having previously pur- chased that reversion, then sells it to the original intended purchaser, will not succeed. Section 96 also provides that a Declaration by Deed, under section 65 (2) of The Conveyancing and Law of Property Act, 1881, to the effect that from and after the execution of the Deed, a term subsisting in land shall be enlarged shall where the term was created by an Instrument executed within 6 years of the date of the execution of the Deed be charged to Stamp Duty as a conveyance or transfer on sale of that land for a consideration equal to the value of the land and that value is to be determined without regard to the term or any part of the term. Wi th regard to residential properties any lease that would comply with section 65 (2) of the 1881 Act would appear to be void under the Landlord and Tenant (No. 1)Act, 1978 whereby no new leases of residential property could be created unless it had been created before that Act, and, in the circumstances over 6 years have elapsed since then. Section 65 only affects a lease of property w i th a residue unexpired of not less than 200 years of a term originally created for not less than 300 years. If there is no rent or merely a Peppercorn rent or other rent having no monetary value or the rent has been released or become barred by lapse of time and there exists no trust or right of redemption affecting the term in favour of the freeholder or other person entitled in reversion expectant on the term, the term can be enlarged into a Fee-Simple by means of a Declaration by Deed under subsection (2). Irish Stenographers Limited (Director: Sheila Kavanagh) Qualified Experienced Stenographers. Fast, efficient service. Overnight Transcripts by arrangement

The Declaration by Deed cannot I affect a genuine merger. One must remember that this provision is confined to a Declaration under ; section 65 (2) of The Con- veyancing and Law of Property Act, 1881 which enables Lessees of certain long leases which are granted Rent free or at a Pepper- corn Rent or any other Rent which is valueless, or having value is released or barred, to execute a Deed declaring the terms to be enlarged into the Fee Simple. In these circumstances and in order : to avoid the Charge, the "Lessee" is obliged to let the lease run for a period of 6 years and then make the appropriate Declaration under the section. If over 6 years has already run, there is no problem. These provisions cannot effect a double charge to Stamp Duty but it has been held in Speyer Brothers \ -v- I.Ft.C. [1908] A.C.92 that where an Instrument falls to be stamped within the heads of two liabilities to Stamp Duty, the State is only entitled to one Tax but it may choose the higher Tax. If, therefore, a Purchaser mergers a leasehold and freehold interest in property by a separate Deed of Merger or in his Deed of purchase recites merger, the Revenue Commissioners may have the choice of selecting the head of charge:- (a) As a conveyance on sale under the old provisions, or (b) On the merger ot the two interests under The Finance Act, 1986, i.e. as a con- veyance on sale. If a leaseholder of long standing decides to purchase the freehold (say for £100.00) would Stamp Duty be payable on the value of the leasehold interest i.e. the document evidencing the merger of the leasehold interest in the superior interest will be stamped as a surrender of the leasehold interest? Another "Scheme" aimed at, is the surrender of a leasehold interest to merge in the superior interest without any surrender deed for stamping. Under sec- tion, 99, the instrument bearing witness to or acknowledging the surrender or the merger is to be charged with Stamp Duty as if it were a surrender of the leasehold interest.

DOCUMENT EXAMINATION

LEGAL AID CASES UNDERTAKEN

M . Ansell, M . A . , 9 8 The Br oadway, H eme Bay, Kent CT6 8EY, England Tel. (03 02273) 67929 (24 Hours)

An "Instrument" is defined in the Stamp Act 1 891 section 1 22, as any document in writing. It seems, therefore, that the Statutory Declaration evidencing the surrender or merger or both will be stampable with ad valorem duty as if it were the surrender document. In any of these cases, it is sub- mitted that what the legislation has done is to make the surrender or merger, a conveyance on sale, and it will be stamped as such. If the legislators intended otherwise, words similar to section 74 Finance (1909-10) Act, 1910 would be used, substituting "value of the property" for "amount or value of the consideration" or to section 96 Finance Act, 1986, deeming the consideration to be equal to the value of the property. "Property" is not defined in the Stamp Duty Legislation, but in Potter-v- I.R.C. (1854) 10 Ex. 147 I at Page 156 it is stated that property is "that which belonged to a person exclusive of others and which could be the subject of bargain and sale to another". The surrender (or merger) will be stamped:- (a) upon a sale, as a conveyance on sale (b) upon a security, as a Mortgage (c) in every other case, £5.00. In the case of a conveyance on sale, Stamp Duty is payable on the value or the amount of the con- sideration and in the case of an arms-length Agreement, the con-

Contact: Secretary, "Hillcrest", Dargle Valley, Bray, Co. Wicklow. Telephone: 01-862184

4 9