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GAZETTE
APRIL 1985
Company in the sales of their houses but who did not
negotiate the sales and merely carried out the normal legal
business of a solicitor in connection with such sales would
not seem to represent his foreign principal even though he
might have authority to receive the purchase moneys. The
correct test of "regular agency" would seem to be whether
the agent actually represents the foreigner and concludes
agreements on his behalf or transacts his business for him.
A solicitor who merely acts in a legal capacity and to
ensure his client's compliance with the legal formalities is
not carrying on his client's "regular agency".
For a solicitor to be liable to be charged under section
200 or 201 he must be something more than a solicitor —
he must be the land agent or business agent or something
akin thereto of his client. For instance, if a foreign
building Company specifically retained a solicitor with a
view to his acting as their agent in connection with
negotiating all sales of houses which they built on an
extensive tract of land, in addition to the legal
conveyancing of each house, his position as solicitor
would seem to be subordinate to that of general agent of
the client.
Likewise, if the client authorises a solicitor to accept
service of notices, to negotiate new leases, collect rents
and to do other acts on his behalf the solicitor could have
extreme difficulty in establishing that he was not an
"authorised person". However, again, in such circum-
stances, the solicitor would be more of a land agent than a
solicitor.
The question must be one of degree — but in a case in
which a solicitor acts with frequency for a client he will
not be an authorised person carrying on his client's
regular agency if his activities are confined to carrying out
specific transactions for his client and he is neither a
business agent or some other form of general non-
solicitor, agent of his client.
Capital Gains Tax
Section 200 of the Income Tax Act, 1967, is expressly
applied for the purposes of Capital Gains Tax by section
51 of the Capital Gains Tax Act, 1975 and paragraph 2(2)
of the Fourth Schedule thereto. The provisions of section
205 are not expressly applied. However, paragraph 2( 1) of
the Fourth Schedule to the Capital Gains Tax Act
provides that the provisions of the Income Tax Acts
relating to the care, management, assessment, collection
and recovery of income tax are to apply also to Capital
Gains Tax. Paragraph 2(2) is stated to be without
prejudice to the generality of sub-paragraph (1).
Accordingly, although section 205 is not, unlike section
200 (and 201), specifically mentioned under the Capital
Gains Tax Act, it clearly does apply for Capital Gains Tax
as for Income Tax.
A solicitor should then be liable for Capital Gains Tax
due by a non-resident client only if he is an "authorised
person carrying on the regular agency" of the client.
There are some particular potential problem situations
for solicitors relating to Capital Gains on disposals of
assets where they do not have any funds coming through
their hands, e.g., in the case of voluntary transfers or the
severance of joint tenancies or company liquidations or
where the consideration is passed between the parties
outside the country. In such cases it may be even clearer
that the solicitor is not an "authorised person carrying on
the regular agency" of the client. However, the general
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