The Gazette 1949-1952

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