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UNDERTAKINGS TO PRODUCE
CERTIFICATES OF DISCHARGE FROM
SCHEDULES A AND B INCOME TAX
A solicitor who finds himself required to give,
on a closing of a sale, an undertaking to produce a
certificate of discharge from Schedules A and B
Income Tax under section 6 of the Finance Act,
1928, should, it is hardly necessary to say, satisfy
himself as to his ability to discharge his undertaking.
This involves satisfying himself as to his client's
liability for tax and if he is quite satisfied that the
client has no such liability or that it has been cleared
he can, with safety, give the undertaking in order to
close the sale. There are, however, certain hidden
dangers of which some members may not be aware
and one of these might best be illustrated by the
following example:—Supposing a client who is
selling his own dwellinghouse is in a salaried job
and the total of his income from his salary, which
would be assessable under Schedule D, added to the
total under Schedule A from the property of the
house is exceeded by his various personal allowances,
marriage allowances, etc. He is then in a position
of being liable to a " tax on charges ", that is to say,
he must when paying his ground rent deduct tax
at the full standard rate and account therefor to the
Revenue. He is, in effect, in the position of a collector
of taxes but is not, of course, paying any tax on his
own income. Suppose, also, that his tax position is
such that any small increase in his income would
bring him " over the line " and make him liable for
both Schedule D and Schedule A tax. The solicitor
on looking into his client's tax position, might feel
quite justified in giving an undertaking to the
solicitor acting for the purchaser of the premises to
produce a certificate of discharge from Schedule A
tax thereon as he would feel quite confident of being
able to secure such a certificate without any difficulty,
especially if his client had made returns over the
years and had not been found liable to tax. However,
if the client concealed from the solicitor, either
fraudulently or without any fraudulent intent, a
third source of income, say, from a small business
carried on as a sideline or an income accruing to
his wife and if this were to come to the notice of the
Revenue after the sale had been completed and the
undertaking given the solicitor could then find
himself in a serious position. The client would find
himself liable to Schedule D and, what is more
important from the point of view of the solicitor
giving the undertaking, Schedule A tax, and it could
go back a good number ofyears. The primary liability
to the purchaser in respect of the Schedule A tax would
then fall on the solicitor on foot of his undertaking
who would, in turn, have to look to his client.
SHARING PROFITS WITH
UNQUALIFIED PERSONS
A member recently answered a press advertisement
from a party who advertised that he was willing to
undertake legal work on a part time basis. Member
answered the advertisement and got in touch with the
advertiser and it transpired that he was an unqualified
law clerk. He stated to member that his terms for
carrying out the work would be one-quarter the
professional charges allowed for each of the items
actually done according to the scales in operation.
The member concerned asked the Council for their
opinion as to whether or not such a course would be
open to objection and the Council, on a report from
a committee, stated to member that he should not
enter upon the arrangement proposed.
The authority for this is regulation 7 of the
Professional Practice (Conduct and Disciplinary)
Regulations, 1955
(S.I. No. 151 of 1955) 1963
calendar page 135, in which it is provided that a
solicitor shall not agree to share with any un
qualified persons his profit costs in respect of any
business either contentious or non-contentious.
Certain limited and special situations are excepted
from this rule but the general rule is as stated
above.
Apart from the question of profit sharing with an
unqualified person the Council do not approve of
the employment of part time legal agencies for any
legal work except in the recognised field of searches
and costs drawing. A statement to that effect will
be found in the GAZETTE for October/November
1960, at page 54.
COUNTY CAVAN SOLICITORS'
ASSOCIATION
At the annual general meeting of the Association
on the yth May, 1963 the following committee was
elected:
Messrs. S.
J. Gannon, Killeshandra,
P. Cusack, Ballyjamesduff, P. N. Smith, Cavan,
T. C. Vance, Bailieborough, James Smith, Arva,
G. V. Maloney, Cavan, Senator T. J. Fitzpatrick,
Cavan and P. J. O'Reilly, Bailieborough.
Mr. James Smith was appointed President and
Mr. G. V. Maloney was appointed Secretary.
DECISION OF PROFESSIONAL
INTEREST
Irish citizen charged with alleged offences under an English
statute which does not apply in Ireland—warrant for
arrest issued in England
On the 6th December, 1960, the prosecutor was
taken into custody by a member of the Garda