§ The provisions of Sub-section (2) of Section seventy-seven of the Stamp Act, 1891 (which exempts a lease from Stamp Duty in respect of certain further considerations), shall not apply as respects any further consideration in the lease consisting of a covenant which if it were contained in a separate deed would be chargeable with ad valorem Stamp Duty, and accordingly the lease shall in any such case be charged with duty in respect of any such further consideration under Section four of the said Act.
§ Question proposed, "That the Clause stand part of the Bill."1544
§ Mr. CARLILE
What is the type of covenant which might be attached to a lease which would come under the Act?
§ 11.0 P.M.
§ Sir SAMUEL EVANS
This matter is rather technical, but I will put it as plainly as I can. There is a provision in the Stamp Act which says that the lease is to be stamped ad valorem for consideration, but if there is consideration in addition to the money consideration subsequently in relation, say to a house or property, that is to be included in the ad valorem duty. But a decision of the courts of law established this, that where in the lease there was a remise for a certain rent, and there was a sort of collateral covenant for the payment of sums, which in that case amounted to about £4,000 in various instalments, that is covered by the provision in the Stamp Act as regards the ad valorem duty. The duty now will be this: The lease will be subject to the ad valorem duty, and if there is merely a covenant for the protection of the premises, by rebuilding, repairs, or otherwise, there will be no further ad valorem duty, but if there is a covenant providing for money payments, either periodically or in a lump sum, the money payment or the periodic payments shall be added to the ad valorem duty.
§ Sir SAMUEL EVANS
No. That matter would be covered by the ad valorem duty—the duty on the consideration of the lease. This is merely to cover a further covenant—a money consideration. Suppose the covenant in the lease is to pay so much rent. The Stamp Duty on that is ad valorem. Suppose that in the same lease there are covenants for the building of houses and the extension of premises which involve no money consideration. The ad valorem duty would cover that. But there was a case decided in the law courts where there was a money payment in addition to the rent amounting to £4,000 per annum, and it was held that that was, under the terms of the Statute, a further consideration which did not subject the lease to further Stamp Duty. That is obviously unfair. This, although it does not charge the further consideration if it is for the maintenance of buildings or the extension of premises, does, nevertheless, fix a further ad valorem duty upon the further periodic or lump sum money payments.