The High Court ruled that €28.44 million of deferred consideration was “due” for stamp duty purposes on the date of a 2004 transfer of land at St. Loman’s Hospital, Palmerstown, Dublin 20. It answered a case stated by the Revenue Commissioners by finding that an Appeal Commissioner had misinterpreted the relevant law.
Glenkerrin Homes Limited agreed in April 2004 to buy the land from the Eastern Regional Health Authority for €31.6 million. It paid a €3.16 million deposit. At completion on 24 June, the balance was not paid in the usual way. Instead, the authority delivered the transfer in exchange for the company’s undertaking to pay the full price six days later and a bank guarantee from Allied Irish Banks securing the €28.44 million balance.
Revenue assessed stamp duty on the full €31.6 million consideration, setting the duty at €2.844 million. The company appealed. The Appeal Commissioner accepted that the undertaking and guarantee together were a non-marketable security under section 40(2) of the Stamp Duties Consolidation Act 1999, but decided that no money was “due” on the security on the transfer date. He assessed duty on the deposit alone, resulting in duty of €284,400.
Revenue challenged that interpretation through a case stated. The question for the High Court was whether the €28.44 million payable on 30 June was “due” within the meaning of section 40(2) on 24 June, the date shown on the transfer. Revenue accepted for the hearing that the undertaking and guarantee together constituted a non-marketable security.
Miss Justice Laffoy held that “amount due” in this provision meant the amount for which a legal liability existed on the relevant date, whether or not payment was then payable. She said that the section’s context supported that reading because non-marketable securities such as guarantees commonly secure future payments. The Appeal Commissioner had treated “due” as synonymous with “payable” and had failed to account for that context.
The court concluded that €28.44 million was due under the security on 24 June 2004, so that amount had to be included in the consideration used to calculate stamp duty. It answered the case-stated question in the negative: the Commissioner was not correct in his interpretation of section 40(2). The judgment did not itself state a revised assessment or make an order for payment of a specified amount of duty.
The judgment also noted inconsistencies between the transfer, undertaking and guarantee, including that the undertaking referred to the full €31.6 million while the guarantee secured the €28.44 million balance. The judge said those inconsistencies did not affect the question before the court. She also noted that section 40(2) had been amended for instruments executed on or after 2 March 2005, but said the amendment did not influence her interpretation of the earlier provision.