The Gazette 1994

GAZETTE

NOVEMBER 1994

Sub-section (v) provides:

that where an instrument operates, or

is deemed to operate, as a voluntary

disposition inter vivos under the

provisions of section 74 of the

Finance (1909-10) Act, 1910, or

section 24 of the Finance Act, 1949,

such fact shall be brought to the

attention of the Commissioners in the

statement delivered under the

provisions of sub-section (2) and such

statement shall contain a statement of

the value of the property, or in the

case of a lease the minimum amount

or value referred to in the said section

24, and where the requirements of this

sub-section are not complied with any

person who executes such instrument

shall for the purposes of sub-section

(3) be presumed, until the contrary is

proven, to have acted

negligently.

In a nutshell, this duty of disclosure

means that if a solicitor is aware that

his client is in any way fraudulent or

negligent (example - receiving

payments under the counter) he has a

duty to disclose the relevant facts to

the Revenue Commissioners.

Likewise, if a solicitor has a strong

suspicion that there is something

about the transaction which is not

correct, he appears to have a duty also

to enquire further. When presenting a

deed a solicitor has a responsibility to

ensure that the deed recites the

relevant facts.

Having dealt broadly with the general

provisions contained in Part (iv) of the

Finance Act, 1991 we now come to

consider what impact this has on the

area of deeds of assent and deeds of

family arrangement:

Under the Stamp Act, 1891 no stamp

duty is payable on any deed of assent

where property is vested in the

persons entitled under the deceased's

will or on intestacy, unless such

assent is executed under seal in which

case it will be liable to stamp duty

of £10.

Where there is a deed of family

arrangement however, or where there

is a variation of either the terms of the

will or the shares on intestacy, a

stamp duty liability can arise on any

deed executed for the purposes of the

passing of any interest in land.

Previously, some practitioners used to

take the view that it was not

obligatory to stamp such deeds of

family arrangement, where a form of

assent in favour of the nominated

party (parties) was lodged in the Land

Registry, on the basis that the personal

representatives could be confident that

the settlement would never need to be

relied upon, or if relied upon that it

could be stamped at a late penalty.

This viewpoint was always

questionable. The reason that this

viewpoint was taken in Land Registry

cases was that where a deed of family

arrangement is completed, the Land

Registry do not actually register the

deed of arrangement but are only

concerned with the form of assent

duly executed by the person named in

the Grant of Representation, i.e. The

Land Registry do not look behind the

deed of assent and accept the deed of

assent on face value and register the

new owner in accordance with the

terms of the assent. The fact that the

deed does not have to be submitted

to the Land Registry does not remove

the obligation on practitioners to

stamp it.

Any deed of assent or deed of family

arrangement which confers a benefit

on someone other than those provided

for under the will or intestacy of the

deceased will incur stamp duty

liability on the consideration passing,

or if there is none such or less than

full consideration passing, on the

value of the property passing as a

voluntary disposition.

Failure to disclose the full facts and

circumstances (for example - by

executing a simple Land Registry

form of assent and making no

reference in the deed to the "true

circumstances") will invoke the

penalty provisions of section 97 of the

Finance Act, 1991.

As stated previously, the duty of

disclosure imposed on the

professional adviser - i.e. for our

purposes the solicitors for the personal

representative - means that it is

absolutely essential that solicitors

acting in the administration of an

estate ensure that the appropriate

stamp duty is paid on all deeds of

assent and deeds of family

arrangement and that there is no

collusion with the beneficiaries or

successors for the non-payment of

same.

On a practical point when a deed of

family arrangement has been executed

and duly stamped, a declaration of

solvency by the persons releasing

their interest should also be prepared

and kept with the deed along with a

certificate of discharge from CAT and

a declaration for the purposes of

The Family Home Protection Act,

1976.

Another point which should be kept in

mind where a deed of family

arrangement is involved concerns

Capital Gains Tax. The question is

sometimes asked whether the

dispositions by the various parties

give rise to CGT. Section 14(6) of the

Capital Gains Tax Act, 1975 applies

where a deed of family arrangement is

made within two years of the date of

death. Section 14(6) provides as

follows:

"If not more than two years, or such

longer period as the Revenue

Commissioners may by notice in

writing allow, after a death any of

the dispositions of the property of

which the deceased was competent

to dispose, whether effected by will,

or under the law relating to

intestacies, or otherwise, are varied

by a deed of family arrangement or

similar instrument, this section shall

apply as if the variations made by

the deed or other instrument were

affected by the deceased, and no

disposition made by the deed or

other instrument shall constitute

a disposal for the purposes of

this Act."

Deeds of Assent/Deeds of

Family Arrangement - An

Alternative Approach?

Disclaimers

Some of you may already be aware of

the ongoing controversy

a possible

alternative to deeds of family

arrangement. I am considering under

this heading the situation

disclaimers.

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