The Gazette 1967/71

ESTATE DUTY PRACTICE CERTIFICATES OF DISCHARGE FROM DUTY In a recent case which was brought to the notice of the Society by a member an important ques tion regarding the protection given by the usual certificate of discharge from death duties in form 149 was involved. The dates and particulars given hereunder are fictitious. John Murphy acting as personal representative of a deceased registered owner sold freehold registered land to a purchaser for a sum of £11,000 by contract dated 18th February, 1969. The sale was completed on 5th May, 1969 and the pur chaser's solicitor had given a personal undertaking to a bank to lodge the land certificates immed iately on completion as security for an advance made to the purchaser. In the requisitions on title the purchaser's solicitor required the vendor to furnish a certificate from the Estate Duty Office that all death duties arising on the death of the deceased registered owner had been discharged and that none were outstanding. The reply to this requisition was in the affirmative and that the duties had already been paid and that the appli cation for a certificate of discharge had been made. On 13th May 1969 the purchaser's solicitor received a certificate of discharge from death duty dated 12th May, 1969, from which he observed that the application for the certificate had been made on 17th February 1969 (the day before the execution of the contract for sale) and that the application stated that the lands had not been sold. The solicitor for the purchaser wrote to the vendor's solicitor calling his attention to the fact that the certificate recited that the property had not been sold whereas it was in fact sold on the date following the application when the purchaser knew or ought to have known that the contract was about to be signed. In the circumstances the purchaser's solicitor requested that the disclosure of the fact, and amount of the sale should be made to the Revenue Commissioners and that any additional duties assessed should be paid and that a further certificate disclosing the purchase price realised by the sale of the lands should be obtained and handed over. The purchaser's solicitor replied that the facts as stated in the application for the certi ficate were correct and that in any event the Revenue Commissioners had referred the matter to the Valuation Office which had fixed the value and raised extra additional assessments which were paid and that in these circumstances there is no

further appeal from the Revenue Commissioners. The certificate of discharge issued by the Revenue Commissioners is as follows I certify that upon the facts as disclosed by the inland revenue affidavit of the estate of the above named.................. who died on the ......... day of...... 196 there is no outstanding charge for "death duties" under his intestacy The last three lines in the printed certificate are deleted. These are as follows In the event of any variation from the esti mated value accepted as the value for duty, of any portion of the above mentioned prop erty occurring as the result of a sale within a period of six years from the date of death of the deceased the said affidavit and account will be subject to re-adjustment, unless such variation was entirely due to a change of circumsances subsequent to the death. It is understood that the view taken by the Revenue Commissioners in the case such as this is that once an unqualified certificate has been issued the Commissioners will not seek to go behind it and that the fact of a subsequent sale even, at such a short interval as one day, will not affect the validity of a certificate issued on an application made prior to the date of the contract for sale. The reference made to the facts disclosed by the Inland Revenue Affidavit in the Certificate would not be taken as including the fact that a sale of the land was in contemplation. Certificate No. 149 is a non-statutory certificate. It is open to a personal representative to make a formal application to the Revenue Commissioners for a statutory certificate under Section 11 (2) of the Finance Act 1954 on which the value of all the property comprised in the estate and the rate for duty is determined once and for all. This would appear to be a better protection to a personal representative and a purchaser than the non- statutory certificate as it would include not only the value of a particular piece of property being sold but the value of all other assets in the estate which might be relevant to the fixing of the rate for duty. For some unknown reason both the Estate Duty office and the profession have for many years past been issuing and accepting the non-statutory certificates in form 149. FINANCE ACT, 1969 PRINCIPAL PROVISIONS PART I INCOME TAX Section 2 applies to an individual who is solely ,33