174 / 244
fide covenant to expend moneys on the erection
or completion of buildings on the site, the duty is
charged only on the rent. Such a lease containing a
covenant to expend a specified sum in building
development and to employ a named builder,
e.g., the lessor, is ordinarily regarded as exempt
from duty on the building expenditure, and adjudi
cation is not considered necessary in such cases.
2.
Where buildings are completed or are in a state of
substantial completion at the date of the lease.
(a)
Where there is a previous agreement with
the lessee to grant a lease, and a collateral building
agreement, the duty charged on the lease depends
upon the substance of the antecedent agreements.
If the agreement for the lease is such that the lessee
can enforce the grant of the lease independently
of the completion o f the building contract the lease
is not normally regarded as chargeable with
ad
valorem
duty in respect of the building price. If
however ..the documents show that the lessee can,
not enforce the. grant of the lease until the building
contract has been completed
ad valorem
duty is
charged in respect of the building price.
(b)
On the granting of a lease of a site from A to B,
where buildings are erected on the site between
the date o f the agreement and the date of the lease,
the fact that the buildings are mentioned in the
parcels clause o f the lease does not of itself mean
that duty will be claimed on the value o f the buildings
if they were erected under a collateral independent
agreement. I f it appeared from a lease that sub
stantial buildings had been demised in consideration
o f a ground rent only, or in consideration of expenses
incurred by the lessee, the Revenue Commissioners
would be obliged to investigate the facts of the
case on adjudication' to ascertain whether or not
there was in fact an independent building agreement.
(r) Adjudication may also be necessary in the
case of a lease or other document in order to
establish the facts on which duty has to be assessed.
In some cases of leases expressed to grant
undeveloped sites for terms of years, with covenants
by the lessees to erect buildings, it was found on
investigation that the buildings had been completely
or almost completely finished before the leases
were granted.
3.
To summarise the position,
(a)
a lease of a
site with a bona fide unfulfilled covenant by the
lessee to expend an agreed amount on building
is not charged with duty on the capital expenditure
even though the money is to be paid to a named
builder, e.g., the lessor. (
b
) Where there is an
agreement for a lease of a site at a rent only, and
buildings are erected by or on behalf of the lessee
between the date o f the agreement and the granting
o f the lease, duty is not charged on the capital
moneys expended, provided that the agreement
for the lease and the building agreement are separate
and independently enforceable. (
c
) Where, between
the date of an agreement for a lease of an
undeveloped site and the granting of the lease,
buildings are erected on the site; either by the
lessor or by a third party, and under the terms of
the agreement the lessee is not entitled to enforce
the grant o f the lease until the building price has
been paid to the builder, the money so paid is
regarded as consideration for the lease and
ad
valorem
duty is charged in respect thereof.
STAMP DUTY ON SALE, LEASE,
AND TRANSFER OF LAND
T
he
Finance Act,
1951
is now law. Section
17
amends Section
13
of the Finance (No.
2)
Act,
1947,
by substituting new rates of stamp duty on
conveyances and transfers of land where the con
sideration or value does not exceed
£1,000.
Section
18
similarly amends Section
24
of the Finance
Act,
1949.
Section
19
was introduced as an amendment
in the Seanad. It applies to every conveyance,
transfer or lease (whether executed before or after
the passing of the Act) in respect of which a grant
has been, or will be made under the Housing
Amendment Acts o f
1948
and
1950
and which
but for the Finance Act,
1951,
would be chargeable
with the
5
per cent, stamp duty.
The Section
provides that Sections
13
o f the Finance (No.
2)
Act,
1947
and
24
and
25
o f the Finance Act,
1949,
shall not apply and shall be deemed never to have
applied to a conveyance, transfer or lease to the
person to whom the grant has been or will be paid,
or who is a member o f the public utility society
to which the grant has been or will be paid. The
amount of any excess duty paid may be repaid
by the Revenue Commissioners.
The effect of
the Section is that in certain cases in which, for
failure to comply with the technical requirements
of the Housing Amendment Acts, instruments
became liable for stamp duty at the full rate, the
difference between the duty' paid and the lower
rate will now be refunded. In order to obtain
the benefit of the Section the instrument must
be lodged for adjudication.
CORRESPONDENCE
D
ear
S
ir
,
In
The Reform of the Law,
by Glanville Williams,
recently published, three important matters appear,
24