Colley, George

Wednesday, 14 July 1971

Dáil Eireann Debate
Vol. 255 No. 8

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Committee on Finance. - Finance Bill, 1971: Committee Stage (Resumed).

This form of relief was originally introduced in relief of landlords of farms where a number of farms were occupied by tenant farmers. It was by a decision in an Irish court in 1901 that it was applie...More Button

Not at all because the value that operates is the value at the date of death. There were no special circumstances in these cases.More Button

It was agricultural land. I am not taking any exceptional cases.More Button

No. The artificial valuation could not have applied, in fact, if it had not been agricultural land.More Button

No. There was no increase in value afterwards in any of these cases. They were sold as agricultural land. I am not finished yet. There is another case that I want to give details of, a relatively r...More Button

I want to go further than that. It is possible, and we have cases on record where the artificial valuation was deliberately and artifically contrived in order to evade duty.More Button

No, it is pretty clear. I will give the Deputy an example.More Button

Supposing a man has land valued at, say, £80,000 and personalty valued at £10,000. He borrows £20,000 from the bank on the security of the land and he puts £20,000 into the joint names of himself and...More Button

No.More Button

The key to this is that by reason of the overdraft he got himself into the artificial valuation category. If he could not do that, of course, the real value of the land would come into play. The poin...More Button

They were in different part of the country. I am not anxious to specify them precisely; they might be identifiable. They were in different parts of the country.More Button

Where land has potential other than as agricultural land the Revenue Commissioners are entitled by law to refuse the artificial method of valuation. I think one may take it that if such factors were ...More Button

We are not dealing with those on this section.More Button

Could I remind the Deputy of the certificate of discharge from death duties?More Button

I understand, 12 years.More Button

In practice there is a law whereby a valuation made on any property is provisional for a period of six years unless it is determined specifically.More Button

I would presume that the purchaser would seek a certificate of discharge.More Button

The certificate of discharge would be the most potent way of finding out.More Button

No other foolproof way.More Button

That, I think, would probably be correct. It is fair enough because it is at the date of the arrangement that he gets possession of the property for himself.More Button

Is he really being penalised in those circumstances?More Button

They might wait three years.More Button

No, I have not had a chance yet.More Button

At the date of death.More Button

That is right.More Button

I think we had contradictory arguments put forward. Deputy Fitzpatrick suggested that somebody who intended to sell the land would not wait six years, whereas Deputy Bruton is suggesting that somebod...More Button

I agree, and for that reason it is not possible to generalise on the basis of these rather exceptional cases.More Button

No, I am not. I do not want to go over all the ground again but in this section we are endeavouring to retain the existing exemption for people engaged in farming whose families are going to continue...More Button

I do not know if I made this clear at the time. If I did not, I had better do so now. That figure emerged from a study which the Revenue Commissioners carried out over a two-year period in 1967 and ...More Button

These would all be factors but also such things as the artificial valuation we are dealing with here. These would be the main factors I think: there may be other factors I should not talk about——More Button

A certain amount of successful evasion may also take place and, perhaps, good solicitors as well as good auctioneers in operation. I want to amend what I said earlier. The result of that study was t...More Button

It is approximately 11 per cent. It is still pretty revealing.More Button

Certainly it has been a factor. What we are doing here is maintaining the position under which most farmers do not pay death duties. We are maintaining that for farmers and their families who stay in...More Button

The reason for the six years is that this operates in regard to all property.More Button

As this operates in regard to all property to reduce it would be to discriminate in favour of people who have sold the land and got the money. To put it another way, it would be to discriminate again...More Button

The thinking behind the six years in subsection (2) is that when the family arrangement is made the man who gets the land is starting from scratch. It is desirable that such family arrangements take ...More Button

Let us take an example of house property in Dublin where the owner dies and leaves some property. A figure is submitted to the Revenue Commissioners, it is accepted and duty is assessed on it and paid...More Button

Yes.More Button

I mentioned a fifth case which I suggested showed clear evidence of conscious evasion.More Button

I do not think it could be explained except by conscious evasion.More Button

Yes.More Button

You can pay duty with Land Bonds.More Button

The Revenue Commissioners do.More Button

Where the duty is charged on the land they will be accepted. You cannot pay someone else's duty with Land Bonds.More Button

Yes. Question put and agreed to.More Button

Hear, hear.More Button

That is the truth, I think.More Button

I shall explain that later.More Button

I have heard more wild and unfounded statements in relation to this section than I have heard in relation to anything for a very long time. Some were made outside the House and others made during this...More Button

It just does not stand up. The truth is that in what we might call the normal bona fide case people make these transfers in consideration of marriage because they want to help and set up their childr...More Button

He does not but he knows at the moment that in the case of a marriage gift all he has to do is to live the one day and there is no duty payable.More Button

That is what I am saying. He does not arrange the marriage to do this but when the marriage is arranged and he has sufficient wealth he can avail of it to an extent that nobody else can avail of it. ...More Button

Anybody who is not in the position of being very wealthy and or having a child getting married. If you have not the combination of these two circumstances you are like anybody else and your executor ...More Button

If you have no money that is one thing and if you have a great deal of money, that is another thing. In between there are a great many people who have a little money.More Button

We are at cross purposes.More Button

No, I did not say that.More Button

I said that where you have the combination of a person of considerable wealth and a child of that person getting married you have this situation.More Button

But somebody who is not in the position of having a great deal of wealth and having a child getting married does not have this exemption. That is what I am saying.More Button

They may have the money and not the child getting married or they may have some money but not be able to afford to lash out large sums of money on each of their children getting married. I want to kn...More Button

Why?More Button

No Deputy has explained this statement that it is socially desirable. What is the position? We are talking here about gifts up to £5,000. That is a substantial amount. The case being made against t...More Button

The Deputy did not wait for the “because”. Maybe he would listen to the argument. It was agreed on all sides, I think, that people do not arrange marriages in order to evade duty. Therefore, what a...More Button

I think Deputy Cooney follows what I am saying.More Button

Let us be clear on this. If it is to be a question of transferring the property they can transfer it irrespective of whether the son is getting married, and if they live for five years afterwards ther...More Button

That is right, provided they are alive. If a person should be on his deathbed at the time he had a son or daughter who was getting married, he would be positively safe in transferring them. There is...More Button

There is no question of that. The argument here is that this provision is an inducement to people not to transfer property but there is no basis in logic for that argument. The inducement to people ...More Button

That takes us back to what we were saying before. Does anybody transfer property to a son or daughter on marriage solely for the purpose of avoiding duty?More Button

If the inducement of avoiding duty is a potent one, he will transfer the property regardless of whether his son is getting married and he will do so as early as he considers it feasible to avoid duty....More Button

Yes.More Button

Assuming that the house was provided by the parent to the son or daughter on marriage and that it was worth more than £5,000, duty would be payable only if the parent died within five years of making ...More Button

If most of Deputy Tully's constituents could be fortunate enough to be given a house worth more than £5,000 on the occasion of their marriage——More Button

——they would not complain of having to pay duty in the remote cases of the donor dying within five years.More Button

There is no question of giving a present to the State. They would have to pay duty in the same way as anybody else.More Button

He might not.More Button

Because the exemption exists and it should be continued for the normal kind of case but we are trying to stop the person who is wealthy from evading duty.More Button

That was over a period of three years.More Button

Yes.More Button

The Deputy is misrepresenting what I said. If the Deputy wants a fair argument I will give it to him but if he wants to twist my words I will not bother. He can have it one way or the other. I am t...More Button

No. The estate will have to pay, not the person who gets it.More Button

Deputy Bruton is correct.More Button

The donee is responsible.More Button

Free of duty?More Button

I wish the Deputy would tell me why they should be free of duty. It is a very strange attitude to adopt, especially for a Member of the Labour Party——More Button

——that a man should be able to pass on his property no matter how much he has, in consideration of marriage, and pay no duty.More Button

Yes.More Button

Who will be penalised?More Button

Farmers on the artificial valuation?More Button

The provision we discussed on the previous section whereby roughly 90 per cent of the agricultural cases coming before the Revenue Commissionors do not pay any duty.More Button

The Deputy is more than a rural Deputy. He has a certain profession which might give him a vested professional interest in this matter.More Button

I can understand that problem.More Button

I thought I indicated that the reason for this section is that I want to close a loophole which has existed and which has been used and I want at the same time, while doing that, to retain the existin...More Button

That is my very point. If I were not doing this and if Deputy O'Donovan were to think of it, he would come in here and attack me for allowing wealthy people to get away with this while we were pursuin...More Button

Because they were not aware of the evasion that was going on.More Button

Were they aware of the evasions?More Button

If they were not aware of the evasions they would not make the point. It is quite clear to me that the main opposition to this section is coming from people who fear that it will affect them. If it ...More Button

This depends, of course, on the remainder of the estate.More Button

We had, but it did not pay any duty. That was the point— because of the artificial valuation. It did not pay any duty.More Button

The case made here mainly has been the case of farmers. I want to repeat that, where the farm is transferred in consideration of marriage, the artificial valuation applies. This has operated effectiv...More Button

The amount of the yield?More Button

I am afraid I have not any estimate, but the Deputy may take it that the amount is relatively small.More Button

How can you make an estimate in a situation in which heretofore things were exempt? There is nothing on which we can go to calculate.More Button

The Deputy is missing the point, I am afraid.More Button

That is based on existing information, but the Deputy is talking about things which were exempt.More Button

It would be magic to produce an estimate on that.More Button

No. That is not true. The Deputy was twisting my words.More Button

The Deputy desisted and I assumed he had ceased twisting my words.More Button

Very well. If that is the approach the Deputy wants that is the one he will get. It is his choice.More Button

If I am approaching Opposition arguments on a reasonable basis I expect to be treated that way and not to have my words twisted but, if somebody wants to twist my words, that is his privilege and he c...More Button

I accept that.More Button

I think the figure for a three year period was 54.More Button

This figure came from the Estate Duty Office, not from the Stamp Office.More Button

Could the Deputy explain then why the figures from the Estate Duty Office are so low?More Button

There is such a query.More Button

The records are not separately kept.More Button

There is no doubt at all. Let us face it: there is no doubt at all about the number that emerged from the Estate Duty Office over that period; nor is there any doubt that the form submitted contains q...More Button

I could not accept that at all. I think it is untrue. It is a gross defamation of the solicitors' profession to say such a thing.More Button

Deputy Bruton says there is an inconsistency in what I say because I agreed with Deputy Tully when he said that the people who were transferring in consideration of marriage were doing so to help the...More Button

We have it here in the section.More Button

We have the limits.More Button

No, but it is clear they would cover the normal cases and catch the very wealthy people. Deputy Bruton also said I did not give details of the amount involved. On a number of occasions I said the am...More Button

My conscience is quite happy on this section.More Button

Maybe not, but maybe other people's consciences are not so happy. The allegations made here are tantamount to saying that most solicitors are incorrectly filling in the affidavits and schedules of a...More Button

That is correct, subject to the qualifications I gave about maintaining the position for what I call the normal case, the bona fide case.More Button

Yes, and in the case of agricultural land the artificial valuation.More Button

No, I think I have dealt with it in considerable detail before. I agree in the main with what Deputy Cooney says about the theoretical basis of a loophole and evasion. This is a special case which ca...More Button

My contention is that we are not doing the harm. This is borne out by the relatively small number of agricultural cases on which duty is paid. In the interests of the honour of the solicitors' profe...More Button

Yes. The discrepancy between Deputy Enright's calculation and what is here is not so great as to involve all the solicitors' profession in illegal practices.More Button

The Deputy will note that at the end of subsection (2) (b) the onus is placed on, in the case he envisages, the executor unless he proves that it was submitted without his consent or knowledge. In th...More Button

Yes.More Button

The general principle is that being the accountable person, if return is made fraudulently or negligently he is, on the face of it, responsible unless this was done with his consent or knowledge.More Button

Yes. I am sorry. Unless it was done without his consent or knowledge.More Button

In the absence of his having to prove it I think that it would probably in practice mean that he would never be liable although, in fact, it could have been done with his consent or knowledge.More Button

I am sorry. I think I was thinking at cross purposes with the Deputy. Am I right in thinking that the point he is making is that this would arise perhaps in the case of somebody who had no consent ...More Button

And who has, therefore, not given his consent or had no knowledge of what had happened? It seems to me that where such an incident occurred before he became executor there would be no difficulty for ...More Button

That is not a new principle in statute law.More Button

There are lots of instances under statute where a person is guilty until proved innocent.More Button

I wonder if the Deputy could elaborate a little more on the circumstances in which he visualises this particular executor coming in?More Button

I think I should say it is not a new onus. There is a similar provision in section 58 (6) of the Finance Act, 1963.More Button

It reads: For the purposes of this section, any return, account, estimate, statement, book, document or declaration submitted on behalf of a person shall be deemed to have been submitted by that perso...More Button

May I just go ahead? I am advised that the situation which the Deputy visualises cannot arise. The chain of executorship which he has referred to in fact disappeared under the 1965 Succession Act.More Button

I think this kind of problem would not arise.More Button

The first penalty which is provided in subsection (1) is a penalty not exceeding £500. In subsection (2) we are dealing with fraud or negligence in the sense that we discussed on an earlier section, ...More Button

I do not know if I can pronounce authoritatively on this but I think that would be stretching it too far.More Button

I think the actual figures involved are not unreasonable having regard to the fall in the value of money. The Deputy asked if the existing penalties were adequate. Unfortunately, there is some doub...More Button

That is what I mean. I said “fraud” and I am distinguishing between fraud and negligence. Question put and agreed to. Section 42 agreed to. SECTION 43. Question proposed: “That section 43 stand part o...More Button

The purpose of the section is to provide for the exemption from stamp duty of cheques which are drawn on forms supplied by the Revenue Commissioners where tax is deductible from sub-contractors, the l...More Button

The real problem arose with that kind of contractor and so the others did not really enter into it. It is not true that all of them are being cut out but the bulk of them are being cut out.More Button

Many of them have gone back into employment and are paying PAYE and paying for stamps and so on.More Button

I cannot go back on the principle of the Bill.More Button

The principle of the Bill as passed in this House.More Button

If they met the requirements of the Act.More Button

I gave the House the essential details of what would be in the regulations about a fixed place of business and so on.More Button

All right. Question put and agreed to. SECTION 44. Question proposed: “That section 44 stand part of the Bill.”More Button

I have no knowledge whatever of what the Deputy is referring to and, of course, it has no relevance to this section. The bodies which would benefit under this section would be building societies, rai...More Button

I do not know what the Deputy has in mind. I suspect he may be confusing utility societies with utility companies. However, this is referring to a utility company of the kind I have mentioned, such ...More Button

I think we discussed this before. Amendment, by leave, withdrawn. Amendment No. 36 not moved. Section agreed to. Section 47 agreed to. SECTION 48. Question proposed: “That section 48 stand part of the...More Button

If I understand the Deputy correctly he is mistaken but it may be that I do not understand the point he is making. Is the Deputy saying that the section is providing that when the appeal commissioner...More Button

I think the Deputy has the method by which the section would operate quite clear but I do not think he is right in his interpretation. First, it is not a question of doing this solely because of the ...More Button

It is not interfering with the right of a person to appeal.More Button

That does not always happen.More Button

If it is unfair and if people have to pay too much they will get it back with interest at 9 per cent.More Button

I am sighing because it does not seem to me to be relevant to the section.More Button

There is.More Button

I do not wish to prolong this discussion but I must repeat that this does not interfere with the right of appeal at all. Secondly, I am surprised by the line being taken by Deputy O'Donovan when he s...More Button

They paid their money.More Button

Have they not paid their tax already? These people under this, the Deputy suggests, should be able to hold on and not pay their tax until there is a final decision by the Circuit Court.More Button

The other kinds of cases are far more frequent. I know of no case in which any company has even looked like being put out of business by having too much tax taken from it, but I know lots of cases of...More Button

No.More Button

These proposed amendments are similar to ones which were moved by Deputy O'Higgins in relation to section 18. They were withdrawn by the Deputy on my undertaking to have another look at the definitio...More Button

It related to section 18.More Button

I move amendment No. 39: In page 27, subsection (5) (c), line 47, to delete “the Appeal Commissioners determine” and to substitute “it is determined”. Amendment agreed to. Section 49, as amended, agre...More Button

This is the customary one placing under the care and management of the Revenue Commissioners all taxes and duties imposed by this Bill.More Button

The care and management phrase?More Button

It does mean something.More Button

It has had a meaning over the years, if not in a particular statute.More Button

I do not know if the Deputy will ever be over here but sometimes I wish he were. Question put and agreed to. Section 54 agreed to.More Button

If the House is agreeable I should like to suggest that we might take it tomorrow after Questions, taking the amendments at short notice.More Button

That is not so. I would think that I would be able to do justice to the various items mentioned——More Button

——if we were to take it tomorrow after Questions. This is subject to agreement by the Whips. This is just my own suggestion.More Button

I do not know if anything can supersede the Whips.More Button


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