The Gazette 1961

Furthermore, obtaining information from the District

Court Office as to whether or not a certificate of

qualification had been

issued would not give

protection as the fact that a particular auctioneer

had obtained a certificate from the District Court

was no guarantee that he had obtained a licence on

foot of the certificate. As a result of representations

made to them by the Society, the Revenue Com

missioners have now agreed to answer in writing

a query addressed to them in the following form :

" Was Mr. X of..............................licensed as an

auctioneer during the period..............................

to........................... or on the...............day of

....................................19......". The Revenue

Commissioners are not prepared and, in fact, are not

permitted to allow any inspection of their records.

Queries of this nature should be addressed to the

Revenue Commissioners, Division i, Lord Edward

Street, Dublin, and in the normal course of events it

will take about a week to ten days to answer the

query. Urgent queries may be dealt with in a shorter

time. The Revenue Commissioners will also furnish

on request (assuming that the answer to the above

query is in the affirmative) the name of the officer to

be subpoenaed to attend court should this be

necessary.

The

official

reference

number

1273/10473/61 and should be quoted in corres

pondence.

VALUE OF GOODWILL OF SOLICITOR'S

PRACTICE FOR DEATH DUTY

PURPOSES

The question of the value of a deceased partner's

interest in the goodwill of the practice for Estate

Duty purposes was brought by a member to the

attention of the Council. He had been in partnership

with his father, and on the death of the father the

Revenue Commissioners claimed Estate Duty on the

whole of the partnership assets as member had been

taken into partnership within three years of the

date of death. A return had been made in the

schedule of assets for the goodwill and the question

which has now arisen is whether or not a deceased

partner's share of the goodwill which passes on his

death to the surviving partner or partners has, in

fact, any value at all and whether or not any death

duties should be payable thereon. There can be no

doubt that in this particular case the rest of the

partnership assets, office premises, books, fittings,

etc., will be liable for duty as a gift made within

three years of death. It does not seem, however, that

the goodwill has any value at all by itself. On the

general question of the value of the deceased

partner's goodwill three propositions are fairly

clear. Firstly, the goodwill is property which passes

on death, that is to say it is property in which the

deceased had an interest ceasing on his death upon

which cesser of interest benefit accrued to the

surviving partner. Secondly, a deduction may be

made in respect of consideration

bona fide

given to

the deceased for the right to succeed to the partner

ship. Thirdly, if and so far as the value of the share

of the goodwill passing on the death of the deceased

partner exceeds the value of any consideration paid

therefor, the duty on the excess, if payable at all, is

payable by the surviving partner and not by the

estate of the deceased partner.

Subject to the foregoing it would appear that

there are certain types of cases where it could be

maintained successfully that the deceased partner's

share of the goodwill has little or no saleable value

and hence has no value for estate duty purposes. For

example, where

the surviving partner has, on

admission to the partnership or since admission to

the partnership, given full consideration in money or

money's worth for his right to succeed thereto no

duty should be payable. Again, where the partner

ship deed provides that the assets of the practice are

to be taken over by the surviving partner at a price

it would be impossible in practice to sever the good

will from the rest of the assets and offer it on the

market as a saleable item. Goodwill has no value

unless it can be offered together with the rest of the

assets of the practice as a going concern.

The

hypothetical purchaser of goodwill only in a case

like this would really get nothing for his money.

In the first place it is probable that the surviving

partner would attract all the clients to himself in any

event and, secondly, he would be under no obliga

tion to continue in partnership with the purchaser.

Finally, in the type of case which has been brought

to the attention of the Council, namely, that of a

father and son it would appear that here the strongest

case could be made for the contention that the

goodwill is of no value whatever. This would be

the case, especially, if there was no other member of

the family qualified to practise as a solicitor. There

would probably be no covenant in restraint ofpractice

which would prevent the surviving partner, namely

the son, from starting up on his own and taking

most of the clients with him. A purchaser from the

executors would stand very little chance of retaining

business in competition with the qualified solicitor-

son and surviving partner of the deceased. This

would, of course, apply more in provincial Ireland

than in Dublin but would nevertheless probably

have very considerable application in Dublin as well.

The foregoing is not intended to be an authorita

tive statement of the law on this question and

neither, of course, is it in any way comprehensive.

Any member who finds himself involved with this.