The Gazette 1949-1952

4th May, 1949. In the latter event, the section does not apply. Case (4) above means that where property was purchased on any date after 1st December, 1947, by a company formed after 15 th October, 1947, 5 1% o f whose capital was in Irish hands, and the share capital is altered on any date after 4th May, 1949, so that less than 51 per cent, thereof continues to be so held, the conveyance to the company must be re-stamped with the full 25 per cent, duty even though the deed may have already been adjudged duly stamped. This provision, that a deed which has been duly stamped in accordance with the law and the facts existing at the date of its execution may attract additional duty on the happening of an uncertain future event, is both novel and undesirable, and is a departure from the principles of the Stamp Act, 1891. Counsel or solicitor, investigating a title in, say, 1953, on which a con­ veyance to such a company appears, in order to satisfy himself that the conveyance was duly stamped, may have to require the vendor’s solicitors (who may not be the solicitors for the company) to furnish evidence that on no single day subsequent to the 3rd May, 1949, was less than 51 per cent, o f the share capital of the company held by Irish citizens. Inspection o f the share register o f the company will not necessarily afford evidence that the persons whose names appear therein are Irish citizens ; and it is difficult to visualize the nature o f the evidence that will have to be required. The adjudication stamp on the deed, instead o f being a protection to the purchaser, may be a pitfall. A good deal o f property may be held by private companies", formed, since 15 th October, 1947, for the purpose o f building and estate development. A solicitor for a subsequent purchaser dealing with a conveyance to such a company about which he may know nothing, will have to assume that the section applies until the contrary is proved. The profession will have to consider how best the practical difficulties created by this sub-section can be solved, with due regard to their obligation to ensure that their clients will obtain good titles to property purchased. The attention o f the Minister was drawn to the practical difficulties arising out o f the sub-section. In reply, he stated that while it is true that the sub-section may cause some difficulty where the property is sold by a company many years after its formation, as the sub-section applies' only to a company incorporated in the State after 15 th October, 1947, the matter o f ascertaining the beneficial ownership o f the shares in the company at all dates since the date of its formation will not present any great difficulty for some years to

Section 26 is concerned exclusively with certain loopholes which were discovered in the Finance (No. 2) Act, 1947, and which resulted in evasion of the 25% duty. The transactions which are now declared to attract the 25% duty are, very briefly, as follows :— (1) A conveyance to an Irish body corporate (i.e. a company formed after 15 th October, 1947, at least 51% o f the share capital being in Irish hands) where the purchase money was provided by an unqualified person (i.e. a person other than an Irish citizen or other exempted person) holding shares or a right o f control in the company, where a mortgage, charge or debenture is after­ wards given to the unqualified person by the company for the amount of the purchase money so provided. ("Section 26 (2) (a) and (*))■ (2) A transaction similar to that mentioned in (1) where the security for the money advanced is an equitable deposit o f the title deeds. (Section 26 (2) (r) and ( d )). (3) A conveyance to an Irish body corporate where an unqualified person is entitled to a beneficial interest in the whole or part o f the property, unless the principal or only instrument under which such a person becomes so entitled is an instrument chargeable with the full duty. This covers the case where property is purchased by an Irish body corporate with money provided by an un­ qualified person and the property is sub­ sequently conveyed by the company to such person. It is intended that duty at the rate o f 25% should be payable even if the unqualified person becomes an Irish citizen before the date o f the conveyance to him by the company. (Section 26 (3)). (4) A transfer to an Irish body corporate, if, at any date after 3rd May, 1949, the company ceases to be an Irish body corporate, because of the shares held by Irish citizens ceasing to exceed 51 % o f the share capital in nominal value. (Section 26 (4)). The effect o f section 26 is, that if a transaction falls within one o f the above-mentioned categories (1), (2), or (3), the mortgage, charge, or equitable deposit in case (1) or (2), or the conveyance from the company to the beneficial owner in case (3) will attract the 25% duty unless such mortgage, charge or equitable deposit in cases (1) or (2), or the conveyance in case (3) was completed before