Deed of gift again Pt:2

Sometimes I am unable to bring you what I promise because a new issue has taken centre place. I am asking for a bit of patience when this happens, but rest assured, I will get back to the topic when possible.

Last week we looked at provisions under section 24, Cap 318 of the Stamp Act (of the laws of St. Vincent and the Grenadines Revised Edition 1990) to exempt certain family members from stamp duties.{{more}} We also established that persons who are not named under the Act may obtain a deed of gift but must pay the stamp duties. A cousin, niece, nephew or uncle cannot get the exemption. However, if a brother or sister gives to a sister or brother, it could be passed on by a subsequent transfer to a niece without paying the duties. But the grantor who is an uncle or aunt cannot transfer directly to a niece without paying the stamp duties.

Shares in a company.

The exemption extends to shares in a company owned by parents and children, brothers and sisters and spouses. Pursuant to subsection 2 of section 24, the exemption “shall extend to and include any conveyance of transfer operating as a voluntary disposition of real or personal property to or from a company or corporation the shares in which the extent of fifty-one per centum or more are beneficially owned by a transferee or transferor who falls within the categories of persons specified in paragraph (1) (hereinafter referred to as the exempted individuals).”

In simple terms, parents, children, brothers, sisters and spouses can enjoy this benefit where there is a transfer of fifty-one percent or more of the shares that are beneficially owned. The shares must have been in the person’s possession for five or more years.

For natural love

As mentioned in a previous article, there are penalties in the Act for those who set out to deceive. So if you claim the exemption by transferring real or personal property to a person who is not your brother, sister, parent, child or spouse, you would be deceiving. Since the lawyer is making a declaration, he has a duty to ascertain that the relations are those that the law approves and the relationship should be on the face of the document. Hence, in giving land to her daughter, the document must have as consideration “for the natural love of Jean May her daughter”. Lawyers generally comply by indicating the same, and in my experience as Registrar I know of only one instance when the relationship was not given, and I asked for it to be given.

This is a small country and there are persons who the lawyer knows personally. However, the lawyer can confirm the relationship by requiring the recipient to produce a birth certificate.

Pointing fingers

I think it is disingenuous for persons to say that lawyers advise clients to claim the exemption in deeds of gift knowing that money is being passed. But then who would tell his or her lawyer about passing money? This is insulting the intelligence of persons out there. As it stands, money could pass for any of the categories. I don’t want to deal with hypothetical situations, but the exemption was given to help families.

It is the duty of the government to plug the loopholes wherever they exist, but I do not believe that a great amount of revenue is lost, for after all, how many brothers and sisters in SVG have enough to give property to siblings? But then you could say that any revenue is important. There is provision to deal with those persons who break the law. I will deal with the law in my next article, provided that no urgent issue arises.

Ada Johnson is a solicitor and barrister-at-law.
E-mail address is: exploringthelaw@yahoo.com