Rodrigues et Al v Board of Inland Revenue

• Jurisdiction: Trinidad & Tobago
• Judge: Koylass, C.
• Judgment Date: 31 July 1985
• Court: Tax Appeal Board (Trinidad and Tobago)
• Docket Number: S 3 of 1984
• Date: 31 July 1985

Tax Appeal Board

Koylass, C.; Burke, M.

S 3 of 1984

Rodrigues et al

and

Board of Inland Revenue

Appearances:

K. Vieira for appellants

Miss N. Farrell and Mrs. M. Robinson-Walters for respondent

Revenue Law - Income tax — Appeal v. assessment to stamp duty on a deed of conveyance — Question whether consideration was inadequate and therefore transaction a voluntary disposition — Income Tax Ordinance, ss. 17(1), 48(4) — No evidence of value of premises at time of sale before the court on which it could come to a conclusion as to adequacy of the consideration — Deed held liable to stamp duty but at an amount different from assessment.

Koylass, C.

1 The appellants have appealed against an assessment to stamp duty by the respondent on a deed of conveyance made on 2nd March, 1984 between Marie &Os Ramos (the vendor)-and the appellants, regarding the purchase of a property at No. 3, Gordon Street, Port of Spain..

2 In the notice of appeal filed on 27th July, 1984, the reasons advanced in support of the appeal are set out as under –

• “(1) The said Deed is a deed of conveyance on sale and ad valorem stamp duty in respect thereof should be charged on the consideration paid by the appellants to the Vendor for the said Premises namely the sum of $18,000.00 and such stamp duty should amount to $360.00.

• (2) Alternatively, ad valorem stamp duty ought to be charged on the value of the said Premises as at the time of the agreement for sale viz in or about the month of June 1970 or alternatively on the value of the said Premises as at the time when the full balance of the said consideration of $18,000.00 was paid by the appellants to the Vendor viz the 24th August, 1970 or thereabouts but ought not to be charged on the value of the said Premises as at the 2nd March, 1984 being the date of the said Deed.

• (3) The said valuation of $110,000.00 is based on the value of the said Premises as at 2nd March, 1984 and not on the value of the said Premises in June and/or August of 1970.

• (4) The said valuation of $110,000.00 is excessive and/or unreasonable and/or unfair.”

3 At the hearing of the appeal, leave was-granted to-the appellants to argue the following new ground in place of (2) above.

“The respondent did not and ought to have assessed the value of the premises as at the time of agreement for sale or alternatively at the time when payment of the purchase price was paid in full for the purpose of determining whether the consideration mentioned in the deed was adequate and/or whether a substantial benefit was being conferred on the purchaser for the purposes of section 48(4) of the Stamp Duty Act, Chap. 76:01.”

4 In paragraphs 3 to 8 of a case stated by the respondent pursuant to section 21(8) of the Stamp Duty Act, Chap. 76:01 (hereinafter referred to as “the Act”), the respondent explained the circumstances in which, and how, the disputed assessment was made. These paragraphs read as under –

• “3. The said deed was submitted to the Board of Inland Revenue (hereinafter called the respondent) on the Stamp Duty Act Ch. 76:01.

• 4. The respondent is of the opinion that the liability of an instrument to stamp duty and the amount of duty if any is determined at the date of first execution of the particular instrument which in this case is 2nd March, 1984.

• 5. Before stamping the said Deed the respondent requested the advice of the Valuation Division of the Ministry of Finance as to the present day value of the property conveyed by the said Deed.

• 6. The respondent, having considered the advice so obtained valued the said property at $110,000.00

• 7. The respondent was of the opinion that by reason of the inadequacy of the sum stated as consideration the conveyance or transfer of the formal full legal title by the said Deed conferred a substantial benefit on the appellants to whom the property was conveyed or transferred. The respondent therefore assessed the said deed to Stamp Duty under the provision of Section 48(4) of the Stamp Duty Act Ch. 76:01 and substituted the value of the property conveyed for the amount of value of the consideration for the sale.

• 8. Accordingly- the respondent assessed the Stamp Duty on the value of the property chargeable as follows –

Stamp Duty on Conveyance of property where the amount or value of the consideration exceeds 81,500 — 2 percent 2% of $110,000.00 = $212,200.00.”

5 The questions submitted for-the opinion of the Appeal Board are set out in paragraph 13 of the case stated, as under –

• “(i) whether the said Deed presented for adjudication is liable to the amount of Stamp Duty as assessed by the respondent.

• “(ii) if not, to what amount of Stamp Duty is it liable?” Section 21(9) of the Act requires the Court to determine the questions submitted and to assess the duty.

6 At the request of the appellants and with the consent of the respondent, the Court admitted, as containing the material facts on which the questions submitted are to be determined, the deed of conveyance on sale dated 2nd March 1984 and registered on 8th August, 1984 as No. 15340/84 (exhibit A).

7 The facts are summarised hereunder –

• (1) By an oral agreement made in the month of June, 1970, one Marie dos Ramos, who was then seized and possessed in unencumbered fee simple of certain freehold hereditaments (hereinafter referred to as “the premises”) agreed to sell and the appellants agreed to purchase the premises for the price or sum of $18,000.

• (2) The appellants raised the purchase price by means of a mortgage dated the 24th day of August, 1970 and registered as No. 8926 of 1970 and made between the appellants and Crown Life (Caribbean) Ltd.

• (3) The purchase price of $10,000 was paid to the vendor on or about 24th August, 1970, but by inadvertence a deed of conveyance was never signed and delivered by the vendor to the appellants. However, as from 24th August, 1970, the appellants had been given vacant possession of the premises by the vendor and they were in possession up to the date of execution of exhibit A.

• (4) The appellants at or before the execution of exhibit A had requested the vendor to vest the premises in them pursuant to the agreement for sale. The vendor agreed to do so and in fact did so by exhibit A.

8 At the hearing, Solicitor for the appellants agreed that in the event that the Court should find that the effective date for determining the value the premises for the assessment of stamp duty was March 1984, he would not dispute the valuation of $110,000.

9 In his address, Solicitor for the appellants first drew attention to two, heads in the Schedule to the Act (at page 50) under which a conveyance or transfer of property of the kind in the instant case may fall for assessment of duty. These, he stated, were as under –

“Conveyance or transfer on sale or any property”,

“Conveyance or transfer operating as a voluntary disposition inter vivos”.

10 He pointed out that in the former an assessment is to be made on the basis of the amount or value of the consideration for the sale. On a voluntary position, inter vivos, the duty was the same as on a conveyance on sale, the value of the property conveyed or transferred being taken as the amount of the consideration. Section 48(1) of the Act relates to such dispositions. He mitted that stamp duty on a conveyance on sale must be assessed by the respondent on the amount or value of the consideration for the sale, unless respondent was of the opinion that by reason of the inadequacy of the sum d as consideration or other circumstances, the conveyance or transfer confers a substantial benefit on the person to whom the property was conveyed transferred. In such a case the conveyance or transfer shall be deemed under section 48(4) of the Act to be a conveyance or transfer operating as a voluntary disposition, inter vivos, and shall be assessed to duty accordingly. In this connection, he referred to Lap Shun Textiles Industrial Co. Ltd. v. Collector of Stamp Revenue (1976) 1 All E.R. 833, and submitted that in the instant case in order to bring the conveyance under section 48(4) of the Act, the respondent must show or attempt to show that the consideration was so adequate that it conferred a substantial benefit on the appellants. He contended that, in considering whether the consideration was inadequate, it had to be judged as at the time the agreement for sale was entered into or the purchase price was paid, both of which events had occurred in 1970. In is regard, he pointed out that the respondent had not considered the value the premises in 1970, but had done so as at March 1984.

11 Solicitor referred to the following passage at page 109 of Sergeant on Stamp Duties, 4th Edition, which, he stated, supported his views:

“What is consideration for a sale? — The ad valorem duty is...