Taxation - stamp duty - chargeability - deed of family arrangement and deed of assent - whether chargeable with stamp duty - whether transfer of interest under deeds by one of three beneficiaries of intestate's estate to other beneficiaries in equal shares "distinct matters" under s.10(2) - meaning of "distinct matters" - Stamp Duty Ordinance (Cap.117) ss.10(2), 27(4)
Words and phrases - "distinct matters" - Stamp Duty Ordinance (Cap.117) s.10(2)
Under s.10(2) of the Stamp Duty Ordinance (Cap.117), "Every instrument chargeable with stamp duty containing or relating to several distinct matters shall be separately and distinctly charged, as if it were a separate instrument, with stamp duty …". T1-2 and S were respectively the sons and daughter of X, the sole owner of a shop. After X died, T1 was granted letters of administration. Ts and S, the only beneficiaries of X's estate, entered into a Deed of Family Arrangement (DFA) and a Deed of Assent (the Assent) (collectively "the Deeds") agreeing that the shop should be vested in T1 in his personal capacity and T2 as tenants in common in equal shares. The Commissioner of Rating and Valuation valued the shop at $17.8 million. The Collector of Stamp Duty informed Ts that the distribution of the beneficiaries' interests in excess of their entitlements under intestacy (Excess Entitlement) operated as a voluntary disposition inter vivos and was chargeable with ad valorem stamp duty (AVD) under s.27 of the Ordinance. Ts objected and contended that under the Deeds, S transferred half of her interest under intestacy to T1 and the other half to T2 and each transfer was a distinct matter, so that AVD assessed at $320,400 should only be $160,200. The Collector disagreed and issued a notice of assessment for $320,400. Ts appealed.
Held, dismissing the appeal, that:
- By operation of the DFA and the Assent, Ts had inherited a share in X's estate which was in excess of the interest to which they were entitled under intestacy law. The Deeds were therefore deemed to be a conveyance of transfer operating as a voluntary disposition inter vivos under s.27(4) of the Ordinance and chargeable with AVD (Baker v Inland Revenue Commissioners  AC 270, Tan Kay Thye v Commissioners for Stamp Duties  3 MLJ 150 applied). (See para.23.)
- As a matter of law, S never had any proprietary interest in the shop, since beneficiaries of an estate did not have any proprietary interest in any asset of the estate until the execution of an assent by the executor or administrator. It was not S, but the administrator with S's consent under the DFA, who transferred S's one-third interest in the shop to T1-2 by executing the Assent (Commissioner of Stamp Duties (Queensland) v Livingston  AC 694 applied). (See paras.29-30.)
- "Distinct matters" under s.10(2) were different classes of property being transferred in the same document. The Excessive Entitlement transferred to Ts under the Deeds were the same kind of proprietary interest so that there was only one matter, not two separate matters. Accordingly, the AVD chargeable was $320,400 (Ansell v Commissioners of Inland Revenue  1 KB 608 applied). (See paras.31-34.)
This was an appeal by two taxpayers, So Kam Shing and So Kam Wai, against a notice of stamp duty assessment in respect of a family arrangement and a deed of assent. The facts are set out in the judgment.