Vendor declaring trust of property and subsequently executing transfer in favour of taxpayer – Stamp duty assessed on basis of consideration paid – High Court affirming assessment – Whether evidence on which assessment made admissable – Whether transfer stampable as “conveyance on sale” – Appeal dismissed
On December 31 1993 the taxpayer agreed to purchase the equitable interest in land in Bishop’s Square, Hatfield (the property). Completion took place on June 30 1994 by two documents. The first was a declaration of trust executed in favour of the taxpayer which recited that the purchase price of £37,223,000 had been paid. The second consisted of the transfer of the property to the taxpayer. The documents were executed and the originals were kept outside the UK. The transfer was delivered to the Revenue for adjudication together with a photocopy of the declaration of trust and of the contract of sale. The Revenue assessed the duty on the transfer at £372,230. The taxpayer appealed to the High Court which assessed the duty at the same amount. The taxpayer appealed contending that neither the Revenue nor the Crown when making its own independent assessment could look at the copy contract or the declaration of trust since they constituted secondary evidence of unstamped documents. It was submitted that without the documents there was no admissible evidence of the amount of value or the consideration paid for the property on which an assessment could be made. Alternatively, it was contended that the declaration of trust was the instrument which constituted the “conveyance on sale” within section 5 of the Stamp Act 1891 and since the property could not be conveyed twice over the transfer was not a “conveyance on sale” and was not stampable.
Held The appeal was dismissed.
1. Section 5 of the Act required all the facts and circumstances affecting the liability of an instrument to duty to be set out in the instrument itself. There was no reason why Parliament required information to be included in a document but which it intended should be withheld from consideration. Therefore neither the Revenue nor the Crown was precluded from considering the recitals to the transfer itself which revealed the amount or value of the consideration.
2. In any event, the taxpayer had informed the Revenue that the amount of value of the consideration which the Revenue had accepted. It had been the taxpayer which had supplied the Revenue with a copy of the contract of sale as corroborative evidence which the Revenue had not necessarily accepted or relied upon.
3. A transfer to a purchaser of legal estate in property contracted to be sold was a “conveyance on sale” notwithstanding that the beneficial interest in the property had already passed to the transferee under a preceding contract for sale and the whole of the purchase consideration had been paid. Therefore the transfer was a conveyance for sale and was stampable: see Oughtred v Inland Revenue Commissioners [1960] AC 206.
Michael Furness (instructed by the solicitor to the Inland Revenue) appeared for the Revenue; Patrick Soares (instructed by Gouldens) appeared for Parinv.