The Gazette 1980

JULY-AUGUST

19

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.

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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