333 / 432
GAZETTE
NOVEMBER 1994
S t amp Du ty - Deeds of Assent
and Deeds of Fami ly Ar r angement
by Raphael King
The Stamp Act, 1891 imposed no
direct obligation to pay stamp duty on
chargeable instruments. The Act did
create certain indirect obligations
which ensured that most chargeable
instruments were in fact stamped. The
main incentive to stamp was that the
consequence of not stamping an
instrument meant that it could not be
used in evidence in civil proceedings
(unless and until the stamp duty
including all penalties and interest had
been paid in full). The Act also
imposed obligations on the people
charged with the responsibility of
registering title to property to ensure
that instruments were properly taxed.
However, the fact that the parties to
an instrument were free to decide not
to stamp it, meant that there was an
element of choice. Part (IV) of the
Finance Act, 1991 abandoned the
voluntary nature of stamp duty and it
is now compulsory. Section 94 of the
Finance Act, 1991 provides that the
payment of stamp duty is mandatory
i.e. once an instrument which is liable
to stamp duty is executed, the duty
must be paid not later than 30 days
after execution (unless lodged for
adjudication within that period).
Where any instrument chargeable with
stamp duty is not stamped or is
insufficiently stamped, then the
accountable person becomes liable to
pay the duty and penalties.
Section 96 of the Finance Act, 1991
sets out who are to be the accountable
persons. In the case of conveyances
on sale, this is the purchaser or
transferee; in the case of mortgages
the mortgagee and in the case of
voluntary dispositions both parties to
the deed.
The Finance Act, 1991 introduced
new interest rates and penalties. The
interest rate on outstanding duty was
increased from 5% per annum to
1.25% per month. In addition, the
Raphael King
penalties for late stamping were
substantially increased.
The 1991 Act also introduced a
surcharge for undervaluation of
property for stamp duty purposes.
(i) Where the submitted value is less
than the ascertained value by
greater than 10% (15% under
Finance Act, 1994) but under
30% (subject to a minimum
difference in value of £5,000) a
surcharge of 50% (25% under
Finance Act, 1994) of the duty is
payable.
(ii) Where the submitted value is less
than the ascertained value by
greater than 30% but less than
50%, the surcharge is equal to
the total amount of the duty
(50% of total under Finance Act,
1994).
(iii) Where the submitted value is less
than the ascertained value by an
amount greater than 50%, the
surcharge is double the amount
of the duty (the total duty under
Finance Act, 1994).
Section 97 of the Finance Act, 1991
has imposed a duty of care between
the Revenue Commissioners and the
professional adviser. Section 97
imposes a duty to set out all the facts
and circumstances affecting the
liability of any instrument to duty in
the instrument or in a statement
attached to the instrument.
Section 97 sets out the penalties
incurred by anyone who fraudulently
or negligently executes any instrument
not containing all such facts and
circumstances and it provides that
anyone employed in or concerned
about the preparation of any such
instrument who fraudulently or
negligently prepares it shall also incur
the same penalties.
Such a professional adviser will be
deemed
to be negligent if he fails to
take reasonable care.
Voluntary dispositions
inter vivos
are
dealt with in sub-section (v) of section
97 which provides that a voluntary
disposition or a deemed voluntary
disposition (example - a sale at an
under value or a lease at an under-
value) must be brought to the notice
of the Revenue Commissioners.
When sub-sections (iii), (v) and (vi) of
section 97 of the Finance Act, 1991
are read together, it becomes apparent
that a duty of disclosure has been
imposed. Under sub-section (iii) a
person will be liable if he/she:
(a) fraudulently or negligently
executes any instrument
or
(b) being employed or concerned in
or about the preparation of any
instrument, fraudulently or
negligently prepares any such
instrument
in which all the facts and circumstances
affecting the liability of such instrument
to duty, or the amount of the duty with
which such instrument is chargeable,
are not fully and truly set forth in the
instrument or in any statement to which
sub-section (2) relates.
309