Bolton (Elaine Yvonne) v Commissioner of Stamp Duty and Transfer Tax
| Jurisdiction | Jamaica |
| Judge | COURTENAY ORR J |
| Judgment Date | 26 March 1999 |
| Neutral Citation | JM 1999 CA 21 |
| Judgment citation (vLex) | [1999] 3 JJC 2612 |
| Court | Court of Appeal (Jamaica) |
| Date | 26 March 1999 |
REVENUE LAW - Transfer tax - Whether tax was payable to Commissioner - Transfer Tax Act, s. 5
The late Mrs Vandolyn Bolton and her late husband Kenneth Donald Bolton were joint tenants of premises situate at 8 West Pine Way, Kingston 6, St Andrew (hereinafter referred to as "the premises"). Mr Bolton died on November 5, 1988. Mrs Bolton died instestate on the 26th day of June 1994, being then the sole remaining registered owner of the said premises. The appellant is the daughter of Mrs Bolton and her personal representative.
It is common ground between the parties that Mrs Bolton lived at the premises for about 20 years and during that time she had no other residence, so that in the words of paragraph 11(3) of Part II of the First Schedule of the Transfer Tax Act, hereafter called the Act the premises were her "principal residence". Indeed prior to the death of her husband it was the principal residence of both of them.
On his death no transfer tax was payable as paragraph 1(5) of the First Schedule of the Act (as it then read) had this effect.
Both sides are agreed that the gross taxable value of the premises is $8,00,000.00 with net taxable value of $766,350.00 after allowing for funeral expenses of $33,650.00.
The Respondent issued a notice of assessment dated May 16, 1998, under cover of a letter dated June 1, 1998 advising that transfer tax of $109,452.50 with interest of $18,945.78 was payable in respect of the premises.
The appellant by a Notice of Objection dated June 18, 1998, contended that no tax was payable and sought a review of the assessment. The Respondent confirmed the assessment by a Notice of Decision dated July 10, 1998.
In spite of her objection the appellant paid the sum of $50,000.00 in part payment of the sum assessed. She now appeals to this Court for the decision of the Respondent to be quashed.
Section 3(1) of the Act imposes Transfer Tax on "the amount or value of such money or money's worth as is, or may be treated under this Act as being, the consideration for each transfer after the 3rd day of April, 1984, of any property;" and it continues:
"and tax charged in respect of any such transfer shall be borne by the transferor."
Section 5(1) of the Act deals with Transfer Tax on death. It reads as follows:
"5-(l) On the death of any individual after the 31st day of May 1974, all property of which he was, at his death, competent to dispose shall, for the purposes of taxation in conformity with subsections (2) and (3) of Section 12, be deemed to be, for a consideration equal to its market value at the date of his death, transferred by him at the date of his death to the persons to whom such property passes on his death."
Section 12(2) provides that:
"Tax shall on the assumption introduced by subsection (1) of Section 5, be imposed with respect to the total consideration for such transfer by an individual as that subsection describes."
It then goes on to state that the tax so imposed shall
be computed on such conisdcration in accordance with the rates set out in that subsection.
Subsection 3 of Section 12 contains the following provisions:
"(3) In relation to tax imposed by virtue of subsection (1) of Section 5 -
(a) the provisions of Part II of the First Schedule shall have effect; and
(b) the other provisions of this Act (in so far as they are applicable in relation thereto) shall apply subject to the provisions of subsection (2) of this section and Part II of the First Schedule aforesaid." (emphasis supplied)
Part II of the First Schedule contains special provisions
in respect to tax concerning transfers on death. Paragraph 11(5) of this schedule as originally enacted was amended by Section 8 of Act 19 of 1988.
This paragraph was further amended by an Order made by the Minister of Finance on July 2, 1997. It had the effect of expanding the categories of persons who could benefit from the exemption provided by paragraph 11(5); but it is agreed that this amendment of 1997 would not apply in the instant case as Mrs Bolton (the deceased) died in 1994.
The provisions of paragraph 11(3) are of particular importance. It reads:
"(3) The property passing on the death of an individual competent to dispose thereof shall be taken to include any property which (having been so disposable) passes -
(a) to his personal representative; or
(b) either immediately on his death or after any interval, either certainly or contingently, and either originally or by way of substantive limitation; or
(c) at a period ascertainable only by-reference to the deceased's death."
Paragraph 11(5) as it stood in 1994 when Mrs Bolton died read thus:
"Nothing in sub-paragraph (3) shall apply in relation to any property which is shown to the satisfaction of the Commissioner to be a dwelling house which was -
(a) owned by the deceased or, as the case may be, by the deceased and his spouse jointly or as tenants in common; and
(b) used as the principal residence of each of them;
Provided that more than one residence of the deceased shall not be accepted as having been the principal residence for the purposes of this sub-paragraph."
THE GROUNDS OF OBJECTION
In her objection submitted by Dr Williams the appellant contended:
"It will be seen that the property passing on the death of the deceased was a dwelling house, the principal residence of the deceased.
In light of this new information and paragraph 11(3) amd 11(5) of the First Schedule to the Transfer Tax Act I request your review of the assessment.
It appears no tax is payable and I would appreciate your issuing your certificate to that effect."
THE RESPONDENT'S DECISION
In a letter dated 10th July 1998 the Respondent wrote:
"I acknowledge receipt of your letter dated 18/6/98 and advise you further that duty is payable upom the death of Mrs Vandolyn Bolton since her husband had predeceased...
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