In a case which rested on the proper construction of the Stamp Duties Consolidation Act 1999, Ms Justice Mary Laffoy ruled that an appeal commissioner had wrongly decided the amount of stamp duty due on transfer of the lands was €284,400.
A proper construction of Section 40.2 of the 1999 Act meant Glenkerrin must pay €2.56m stamp duty or 9% of the entire price, less a 10% deposit of €3.16m paid for the lands. The appeal commissioner had wrongly decided that the amount due was 9% of the deposit price of €3.16 million, she held.
The case arose from an April 2004 contract for sale of lands and premises at St Loman’s Hospital, Palmerstown, Dublin between the Eastern Regional Health Authority and Glenkerrin under which Glenkerrin agreed to purchase the lands for €31.6m. Under the contract, a deposit of €3.16m was payable.
The Revenue originally assessed stamp duty due as €2.84m, being 9% of the total purchase price. Glenkerrin argued the chargeable consideration was limited to 9% of the deposit of €3.16m.
The appeal commissioner upheld Glenkerrin’s claim that the security given for the remainder was a non-marketable security under section 40.2 of the 1999 act and that no amount was “due” on security on the date of the transfer within the meaning the act.
Ms Justice Laffoy yesterday ruled that, as a matter of common and commercial sense, the type of non-marketable security envisaged was one which secured future payments of principal and interest.
The legislature must have intended the amount due would include all sums, whether for principal or interest, in respect of which there was a legal liability on the material date, even though such sums were payable in the future.
In this case, the amount due for principal and interest, on the security given by the undertaking and guarantee, was €28.44m and 9% of that was due in stamp duty.
The judge added she was not influenced in her decision by an amendment to the Finance Act of March 2005. It was reasonable to infer that amendment was influenced by the appeal commissioner’s finding, she added.