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ESTATE
DUTY PRACTICE
CERTIFICATES OF DISCHARGE FROM
DUTY
In a recent case which was brought to the notice
of the Society by a member an important ques
tion regarding the protection given by the usual
certificate of discharge from death duties in form
149 was involved. The dates and particulars given
hereunder are fictitious.
John Murphy acting as personal representative
of a deceased
registered owner sold freehold
registered land to a purchaser for a sum of £11,000
by contract dated 18th February, 1969. The sale
was completed on 5th May, 1969 and the pur
chaser's solicitor had given a personal undertaking
to a bank to lodge the land certificates immed
iately on completion as security for an advance
made to the purchaser. In the requisitions on title
the purchaser's solicitor required the vendor to
furnish a certificate from the Estate Duty Office
that all death duties arising on the death of the
deceased registered owner had been discharged
and that none were outstanding. The reply to this
requisition was
in
the affirmative and that the
duties had already been paid and that the appli
cation for a certificate of discharge had been made.
On
13th May
1969
the purchaser's solicitor
received a certificate of discharge from death
duty dated
12th May,
1969,
from which he
observed that the application for the certificate
had been made on 17th February 1969 (the day
before the execution of the contract for sale) and
that the application stated that the lands had not
been sold. The solicitor for the purchaser wrote
to the vendor's solicitor calling his attention to the
fact that the certificate recited that the property
had not been sold whereas it was in fact sold on
the date
following
the application when
the
purchaser knew or ought to have known that the
contract was about to be signed.
In the circumstances the purchaser's solicitor
requested that the disclosure of the fact, and
amount of the sale should be made to the Revenue
Commissioners and
that any additional duties
assessed
should be paid and
that a
further
certificate disclosing the purchase price realised by
the sale of the lands should be obtained and
handed over. The purchaser's solicitor replied that
the facts as stated in the application for the certi
ficate were correct and that in any event the
Revenue Commissioners had referred the matter
to the Valuation Office which had fixed the value
and raised extra additional assessments which were
paid and that in these circumstances there is no
further appeal from the Revenue Commissioners.
The certificate of discharge issued by the Revenue
Commissioners is as follows
I certify that upon the facts as disclosed by the
inland revenue affidavit of the estate of the
above named.................. who died on the
......... day of...... 196
there is no outstanding
charge for "death duties" under his intestacy
The last three lines in the printed certificate are
deleted. These are as follows
In the event of any variation from the esti
mated value accepted as the value for duty,
of any portion of the above mentioned prop
erty occurring as the result of a sale within a
period of six years from the date of death of
the deceased the said affidavit and account will
be
subject
to
re-adjustment, unless
such
variation was entirely due to a change of
circumsances subsequent to the death.
It is understood that the view taken by the
Revenue Commissioners in the case such as this
is that once an unqualified certificate has been
issued
the Commissioners will not seek
to go
behind it and that the fact of a subsequent sale
even, at such a short interval as one day, will not
affect the validity of a certificate issued on an
application made prior to the date of the contract
for sale. The reference made to the facts disclosed
by the Inland Revenue Affidavit in the Certificate
would not be taken as including the fact that a
sale of the land was in contemplation.
Certificate No. 149 is a non-statutory certificate.
It is open to a personal representative to make a
formal application to the Revenue Commissioners
for a statutory certificate under Section 11
(2) of
the Finance Act 1954 on which the value of all
the property comprised in the estate and the rate
for duty is determined once and for all. This would
appear to be a better protection to a personal
representative and a purchaser
than
the non-
statutory certificate as it would include not only
the value of a particular piece of property being
sold but the value of all other assets in the estate
which might be relevant to the fixing of the rate
for duty. For some unknown reason both
the
Estate Duty office and the profession have for
many years past been issuing and accepting the
non-statutory certificates in form 149.
FINANCE ACT, 1969
PRINCIPAL PROVISIONS
PART I
INCOME TAX
Section 2 applies to an individual who is solely
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