Baddeley and Others (Trustees of the Newtown Trust) v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judgment Date | 17 February 1955 |
| Date | 17 February 1955 |
| Court | House of Lords |
HIGH COURT OF JUSTICE (CHANCERY DIVISION)-
COURT OF APPEAL-
HOUSE OF LORDS-
Stamp Duty - Conveyance - Charitable purposes - Finance Act, 1947 (10 & 11 Geo. VI, c. 35), Sections 52 (1) and 54 (1).
Properties were conveyed to the Appellant Trustees by two conveyances, in one case on trust, inter alia,
for the promotion of the religious social and physical well-being of persons resident in the Country Boroughs of West Ham and Leyton…by the provision of facilities for religious services and instruction and for the social and physical training and recreation of such aforementioned persons who…are…members or likely to become members of the Methodist Church and of insufficient means otherwise to enjoy the advantages provided…and by promoting and encouraging all forms of such activities as are calculated to contribute to the health and well-being of such persons,
and in the other case on similar trusts omitting the reference to religious services and instruction and otherwise substituting "moral" for "religious". On appeal against assessments to Stamp Duty at the rate of £2 per cent. ad valorem, the Trustees contended, in respect of each conveyance, that it was made to a body of persons established for charitable purposes only or to the trustees of a trust so established, within the meaning of Section 54 (1) of the Finance Act, 1947, and accordingly liable at the rate of £1 per cent.
Held, that the trusts were not for charitable purposes only.
(a) Baddeley and Others (Trustees of the Newtown Trust) v. Commissioners of Inland Revenue (No. 1 Case)
CASE
Stated by the Commissioners of Inland Revenue pursuant to Section 13 of the Stamp Act, 1891.
1. The opinion of the Court is desired as to the Stamp Duty chargeable on an instrument which has been presented to the Commissioners of Inland Revenue on behalf of Bernard Baddeley, Bertie Augustus Campbell, Margaret Irene Miles, Mary Betty Collingridge, James Ball, Frederick Alfred John Pace and Francis Gordon Feather, hereinafter called "the Appellants", by their solicitors under the provisions of Section 13 of the Stamp Act, 1891, for the opinion of the Commissioners as to the Stamp Duty with which the instrument was chargeable.
2. A copy of the instrument in question (omitting the plan) is hereto annexed and marked exhibit "A", and forms part of this Case (1). The instrument is a deed of conveyance, dated 21st August, 1951, made between the British Transport Commission of the first part, Bernard Baddeley of the second part, and the Appellants of the third part, whereby after reciting that the British Transport Commission was seised in fee simple of some land with buildings thereon situated at Stratford, Essex, and had agreed with the said Bernard Baddeley for the sale thereof to him at the price of £1,000, and that the said Bernard Baddeley was desirous of vesting the property in the Appellants with the object of its being held by the Appellants upon with and subject to such trusts powers and provisions as are thereinafter described and contained, it was witnessed that in consideration of £1,000 paid by the said Bernard Baddeley to the British Transport Commission, the British Transport Commission granted and conveyed, and the said Bernard Baddeley conveyed and confirmed unto the Appellants, the said property to hold unto the Appellants in fee simple upon the trusts thereinafter described.
3. The trusts are fully set out in the said conveyance and are shortly trusts for, inter alia, the promotion of the religious, social and physical well-being of persons resident in the county boroughs of West Ham and Leyton in the county of Essex by the provision of facilities for religious services and instruction and the social and physical training and recreation of such persons who, for the time being, are in the opinion of the Leaders for the time being of the Stratford Newtown Methodist Mission of insufficient means otherwise to enjoy the advantages provided by the trust. The conveyance bearing even date with the conveyance presented for adjudication, and referred to in clauses 8 and 9 of the conveyance presented for adjudication, may be referred to as part of this Case, but, as the Stamp Duty thereon is the subject of a separate appeal to this Honourable Court, a copy of it is not annexed.
4. The Commissioners were of opinion that the conveyance presented for adjudication was liable to ad valorem duty under or by reference to the head of charge "Conveyance or Transfer on sale of any property", etc., in the First Schedule to the Stamp Act, 1891, either as a conveyance on sale where the amount or value of the consideration was £1,000, or as a conveyance or transfer operating as a voluntary disposition inter vivos under Section 74 of the Finance (1909-10) Act, 1910, on a value amounting to £1,000, and in either case to ad valorem duty at the rate of £1 for every £50 of that amount under the provisions of Section 52 of the Finance Act, 1947, and other relevant statutory provisions.
5. The Appellants contended that the conveyance or transfer was made to a body of persons established for charitable purposes only or to the trustees of a trust so established within the meaning of Section 54 (1) of the Finance Act, 1947, and that the duty should be assessed at the rate of 10s. for every £50 of the amount or value of £1,000.
6. The Commissioners were not satisfied that the conveyance or transfer was made to a body of persons established for charitable purposes only or to the trustees of a trust so established, and assessed the duty at £20, being ad valorem duty at the rate of £1 for every £50 of the £1,000, and the Appellants, being dissatisfied with the assessment of the duty aforesaid, and having paid the duty in accordance with the assessment have in pursuance
of Section 13 of the Stamp Act, 1891, required the Commissioners to state and sign a Case setting forth the question on which their opinion was required upon the assessment made by them and the Commissioners do hereby sign and state this Case accordingly.7. The question for the opinion of the Court is:-
(2) Is the conveyance presented for adjudication liable to duty as assessed by the Commissioners?
(3) If not, to what duty is it liable?
Given under the hands of the Commissioners of Inland Revenue this 13th day of August, 1952.
E.H. Ritson.
J.H. Evans.
(b) Baddeley and Others (Trustees of the Newtown Trust) v. Commissioners of Inland Revenue (No. 2 Case)
The Stated Case was in similar terms to the first Case except that it related to "certain properties in land situate at Ilford, Essex, and laid out as a playing field, and upon part of which a pavilion and a groundsman's bungalow had been erected"; and the following paragraphs were substituted for paragraph 3:-
3. The trusts are fully set out in the said conveyance, and are trusts for, inter alia, the promotion of the moral, social and physical well-being of persons resident in the county boroughs of West Ham and Leyton in the county of Essex by the provision of facilities for moral, social and physical training and recreation of such persons who, for the time being, are in the opinion of the Leaders for the time being of the Stratford Newtown Methodist Mission of insufficient means otherwise to enjoy the advantages provided by the trust. The conveyance bearing even date with the conveyance presented for adjudication, and referred to in clauses 9 and 10 of the conveyance presented for adjudication, may be referred to as part of this Case, but, as the Stamp Duty thereon is the subject of a separate appeal to this Honourable Court, a copy of it is not annexed.
4. By the said conveyance presented for adjudication it was also provided that the trustees should hold the sum of £10,000 that day paid to them by Bernard Baddeley and all donations, subscriptions, legacies, and other moneys which might at any time thereafter be paid to them for that purpose, and all real and personal property which might at any time thereafter be conveyed, transferred, devised or bequeathed to them for that purpose upon the trusts therein mentioned, being, shortly, trusts as if the same were capital money arising under the Settled Land Act, 1925, from land settled by the conveyance presented for adjudication.
The cases came before Harman, J., in the Chancery Division on 18th December, 1952, when judgment was given in favour of the Crown, with costs.
Harman, J.-These are appeals by Case Stated from two decisions of the Commissioners of Inland Revenue under the Stamp Act, 1891, holding that two conveyances, both dated 21st August, 1951, and made in favour of the Appellants, fell to be stamped under the First Schedule to the Act as either conveyances on sale or voluntary conveyances to be treated as such under Section 74 of the Finance (1909-10) Act, 1910, and accordingly were liable to ad valorem duty at the rate of £1 for every £50 under Section 52 of the Finance Act, 1947. The Appellants' contention in each case is that the Stamp Duty ought to be at one-half that rate on the ground that the conveyances were made to
a body of persons established for charitable purposes only or to the trustees of a trust so established
within the meaning of Section 54 (1) of the Finance Act, 1947. The question in each case is therefore the same, namely, whether the Appellants are trustees of a trust established for charitable purposes only.
Of the two deeds the first transfers to the trustees a piece of land upon which were already erected a mission church, a lecture room and store, and the second four pieces of land; the second also deals with a sum of £10,000 as an endowment fund. The conveyances both bear the same date and are intimately connected, though the trusts are not stated in the same terms. The Appellants, who are throughout called "the Trustees", are directed to allow the property in each case
to be appropriated...
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