Commissioners of Inland Revenue v Gribble
| Jurisdiction | England & Wales |
| Date | 1913 |
| Year | 1913 |
| Court | Court of Appeal |
Revenue - Reversion Duty - “Purchase” of Reversion - Marriage Settlement - Consideration of Marriage -
In the year 1888 the freehold reversion expectant on the determination of a lease for ninety-four years from Michaelmas, 1816, was conveyed, subject to the lease, to the trustees of a marriage settlement, before and in consideration of the marriage, upon the trusts thereby declared.
Upon a claim for reversion duty under s. 13, sub-s. 1, of the Finance (1909–10) Act, 1910, the trustees claimed exemption under s. 14, sub-s. 1, on the ground that the reversion was purchased before April 30, 1909:—
Held by the Court of Appeal (Cozens-Hardy M.R. and Kennedy L.J.; Buckley L.J. dissenting), that the word “purchase” in s. 14, sub-s. 1, was used in the ordinary commercial sense of “buy” and not in the more technical sense of “purchase for valuable consideration,” and that the reversion in question was not exempt from duty.
APPEAL from a decision of Horridge J.F1
The appellants were the freeholders of a house and together constituted “the lessor” for the purpose of s. 15 of the Finance (1909–10) Act, 1910, and the person to whom the benefit (if any) accrued from or by reason of the determination of the lease of the house for the purpose of reversion duty.
By a lease made in 1817 the house was demised by the predecessors of the appellants to a lessee for a term of ninety-four years from Michaelmas, 1816.
By a conveyance dated August 1, 1888, made in contemplation and consideration of the marriage of F. C. Coxhead and A. B. Gribble, the house was conveyed to trustees in fee simple, subject to the lease, upon trust that the trustees should sell the same and hold the proceeds of sale upon the trusts declared by another indenture of the same date. That other indenture was a settlement made upon the said marriage. It declared that the trustees, who were the same in both indentures, should hold the house and the proceeds of sale thereof and the rents and profits thereof until sale, upon trust to pay the annual income to the wife for life and after her death to the husband for life, and after the death of the survivor upon trust as to the capital for the issue of the marriage and in default of issue for such person, persons and purposes as the wife should by deed or will appoint, and in default of such appointment for the next of kin of the wife.
On September 29, 1910, when the lease of the house expired, the appellants were the trustees of the conveyance and settlement of August, 1888, and the house was vested in them upon the above trusts.
The Commissioners of Inland Revenue made an assessment upon the trustees to reversion duty in respect of the benefit accruing to them by the determination of the lease of the house, under s. 13 of the Finance (1909–10) Act, 1910. The trustees appealed to a referee against the assessment upon the ground that no reversion duty was payable by reason of the provisions of s. 14, sub-s. 1, of the Act. The referee decided that no reversion duty was payable, and the Commissioners appealed.
Horridge J. decided that reversion duty was payableF2, and from that decision the trustees now appealed.
Ryde, K.C., and Konstam, for the appellants. Sect. 14 of the Finance (1909–10) Act, 1910, is full of technical words, and the proper construction is that “purchase” is used in a technical meaning and not merely as equivalent to “buy.” The respondents say it means “buy,” but admitted in the Court below that it might cover a case of exchange. A deed of exchange is regarded as equivalent to a conveyance on sale by s. 73 of the
The principle of the enactment is that the “lessor” should pay a tax for coming into something which he has done nothing to earn, and the exemption was to obviate a possible hardship in the case of recent purchases which would apply equally well to the case of a marriage settlement.
“Purchaser” includes the case of a marriage consideration in s. 74, sub-s. 5, of this Act, and we submit that in s. 14, sub-s. 1, “purchase” is used in the wider sense and covers acquisition for money, money's worth, or other valuable consideration including marriage.
[BUCKLEY L.J. How about a mortgagee? He is legally a purchaser.]
Yes; the case of foreclosure of the reversion is dealt with by s. 14, sub-s. 5, but that applies for all time and not merely to a forty years reversion under sub-s. 1, and has an entirely different object.
Sect. 3, sub-s. 1, of the
If the meaning of the word is confined to “buy,” some vested interests will be protected, others not, but the Legislature advisedly used the word “purchase” in the wider sense meaning “acquire for valuable consideration” which would cover marriage, and would work both equality and equity.
Sir John Simon, S.-G., and Tomlin, for the respondents. If the word “purchase” means “purchase for...
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