106 / 270
GAZETTE
the transferor and transferee ceasing to be associated to
the required extent at any time within two years of the
date of the conveyance or transfer, whether or not this
was envisaged by the original "arrangement". If so, then
irrespective of whether or not it has been adjudicated, the
conveyance or transfer is to become liable to ad valorem
stamp duty, the duty payable being a "debt due from the
transferor and the transferee jointly and generally to the
Minister for Finance", bearing interest meanwhile at 1.25
per cent per month.
9
Unfortunately, this is not the end of the story. While
the Revenue's intended targets are undoubtedly the
transferor and the transferee, the introduction of S. 19(6)
ignores the fact that the primary sanction for the
collection of stamp duty is the inability to adduce a
document in evidence unless it is duly stamped: S.14
Stamp Act 1891. Suppose, for example, that a holding
company (H) conveys its premises to its wholly owned
subsidiary (S) and the Revenue concedes that under the
new legislation stamp duty is payable on the conveyance
at 50p only. Subsequently, S conveys the premises to a
third party (P), ad valorem stamp duty being paid in the
usual way by P on this second conveyance. Within two
years of the execution of the original conveyance H and S
cease to be associated in circumstances not envisaged at
the date of the execution of the original conveyance (for
example, by the subsequent injection into S of additional
capital by another company Q, unconnected in any way
with H). Does this mean that the original conveyance by
H to S "shall . . . again become chargeable" with ad
valorem stamp duty, and that P, although not a party to
the events whereby H and S have ceased to be associated,
and even, in all probability, totally ignorant of them, will
be unable to prove his title to the premises without first
paying the outstanding duty, the original conveyance
being an essential link in his chain of title?
It is submitted that it does not. S. 19(4) in the new
legislation requires that an instrument to which S. 19(2)
applies be submitted for adjudication under S.12 Stamp
Act 1891. Having been stamped in accordance with the
adjudication the instrument "shall be admissible in
evidence, and available for all purposes notwithstanding
any objection relating to duty": S. 12(5) Stamp Act 1891.
These last six words, it is submitted, are sufficient to
dispose of any objection to P's title based on S. 19(6). The
fact that the original conveyance by H to S "shall . . .
again become chargeable" with ad valorem stamp duty in
no way prevents P from tendering it in evidence to prove
his title to the premises.
Fortunately however, a practical solution to the
problem exists. Since the maximum amount of any
additional stamp duty is readily calculable (6% of the
consideration + interest) liability can be guarded against
by means of an insurance company bond. It is under
stood that at least one major Irish insurance company has
agreed to provide such a bond.
FOOTNOTES
1. See. however,
John Emery & Sons Ltd.
vs.
CIR
20 TC 213.
2. Replacing S.50 Finance Act 1938 (U
.K.)
above.
3. "On the whole. I have come to the conclusion that, for the
purposes of the present case, a lease is a conveyance and a person who
grants a lease is a conveying parly." (227) One is reminded of the
100
JULY-AUGUST
19
story of the harrassed booking clerk endeavouring to explain the rail
way company's fare schedule to a passenger: "Cats is dogs, hens is
dogs and so's rabbits. But them tortoises of yours, ma'am, is insects,
and they travel free".
4. (1961) Ch. 597.
5. (1963) A.C. 135.
6. (1966) Ch. 108.
7. cf.
Times Newspapers vs. IRC
(1971) 3 All E
.R.
98 where the
transferee's bank overdraft was not guaranteed.
8. See, for example,
Parway Estates Ltd.
vs.
CIR
45 T.C. 135,
Brooklands Selangor Holdings Ltd.
vs.
IRC
(1970) 2 All E.R. 76 and
Baytrust Holdings Ltd.
vs. /RC(1971) 3 All E
.R.
76. It was also a
secondary ground for the decision of the Court of Appeal in
Curzon
Offices Ltd. vs. IRC
(1944) 1 All E
.R.
606, the facts of which are set
out above. See per Goddard L. J. (607).
9. The Legislature appears to be less impressed, however, with the
desirability of introducing legislation corresponding to S.91 Finance
Act 1965 (U.K.) authorising the Court to order the payment of
interest on stamp duty ordered to be repaid on a successful appeal by
way of case stated under S. 13 Stamp Act 1891.
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