226
THE HONGKONG WEEKLY PRESS &
183
[September 3rd, 1921.
This was
executed by bankers, if the 15. The proposed new Heading No. Collector is satisfied that, owing to 12A, deals with duty on bonds given bankruptcy or any other cause, the under Ordinance No. 16 of 1915, Section banker cannot recover the duty, or can- 11 (2), to secure the payment of estate not recover all the duty, from the per- duty. In the Stamp Ordinance, 1901, son who is liable to pay the duty. The such bonds were liable to the same duty The effect of the Stamp proposed new sub-section (8) provides as mortgage. that in the case of a genuine cancella Ordinance, 1921, was to render them tion, as distinguished from a set off, the liable to a fixed duty of $20. exchange contract cancellation note duty a hardship in the case of small estates, shall be payable only in respect of the and accordingly, by a regulation made original contract, although for the pur- such bonds should pay at the same rate on the 17th June, it was provided that poses of the banker's accounts the con-
as mortgages up to the maximum of $20. cellation may take the form of a second It was necessary to fix this maximum be- exchange contract. The conditions of this concession are that the cancellation duties by regulation, but it seems obvious cause there is no power to increase stamp agreement must be come to, and the ex- that such bonds should pay at the same change for the cancellation be fixed, and rate whatever the amount. The new the transaction be completed, on the Heading No. 12A therefore renders such same day.
bonds liable to the same rate of duty as mortgages, whatever the amount of the bond.
and the effect of this clause is to throw, notes, the onus of proof on the person who asserts that there has been no splitting. He is the person who knows all the facts, and it is only fair that he should be required to show that the splitting up into two documents or more was done bona fide and not to evade duty. Clause 4 deals with exchange contracts. It makes three main changes in the col- lection of that duty. In the first place, it imposes on the banker, if either party to the contract is a banker, the duty of seeing that the stamp duty is paid. If both parties are bankers, the seller is to put the stamps. If neither party is a banker, the seller again has to put the stamp. The reason for the first of these requirements, is that bank- ers are used to collecting these duties, they have the necessary stamps and they are less likely to find difficulty and less likely to overlook the necessary stamp. Another change is to give the Collector power to remit the duty on exchange contract cancellation notes, if the Col- lector is satisfied that, owing to the bankruptcy of the seller, the banker
cannot
recover duty from the person liable to pay it. The third change is
to make it clear that in the case of genuine cancellation of exchange con- tract notes, as distinct from a set-off, the duty is payable only on the original exchange contract, although, for the purposes of a banker's accounts, the cancellation may appear in his books a second exchange contract. This
as
5.-Where an adjudication is applied for the Collector has, under section 14 (2) of the principal Ordinance, power to call for an abstract of the instrument and for evidence to show whether the necessary facts have been set out in the instrument. He has no such power in the case of an instrument which is merely tendered for stamping. Clause 5 proposes to give him this power.
6.-Clause 6 proposes to make certain amendments in the schedule to the prin cipal Ordinance. These amendments are explained below.
comes law.
16. The proposed new Heading 144 provides that, if compradore orders are passed through a bank they must pay the This is only a same duty as cheques.
was in force revival of the rule which
from 1903 to 1921.
17. The proposed new Heading 17A reproduces a regulation which was made on the 13th May, 1921, except that it provides for the case of dividend war- rants issued before the 13th May, 1921. This case is not unimportant, because the practice of issuing in coupon form war- rants to receive any dividends that may be declared is sometimes employed by Chinese companies.
this bill.
" Do
""
7. Paragraph (a) is a repetition of a regulation which was made on May 13th. It is inserted here because it seems con-
18. In noting up in the schedule to the venient to collect in this bill as many as Stamp Ordinance, 1921, the amendments possible of the amendments which have made by Clause 6 of this bill it will be already been made by regulation. Three found that in some cases the sign sets of regulations have already been will give a wrong meaning unless it is made under the Ordinance. Some of read without reference to the insertions these regulations are temporary and made by this bill. For example, the will not be required after the end of sign "Do" in the fourth column of this present year. Others have been Heading No. 15 will still refer to the worked into this bill, and the intention word
" Overembossed and not to the is to consolidate all the remaining re- word " Adhesive " and should be altered to "Overembossed.' "J It gulations early next year. Any regula accordingly tions which are worked into this bill might be supposed that these formal will be repealed as soon as the bill be alterations ought to have been made by The reason why this has not been done is that, as it happens, no such alterations are necessary in the official copy of the Ordinance, which is in fools- cap form, and in which the paging of the schedule is different from that in the The octavo form of the Ordinance. octavo form of the Ordinances is the form in which they appear in the annual volume. The lines of the sections are of the same length in both forms,of the Ordinances. The copy of the Ordinance deposited in the Registry of the Supreme Court is here described as the official copy in reliance on the provisions of Section 10 of the Interpretation Ordi- nance, 1911. It would of course have been better if the sign
"Do " had not been used in the principal Ordnance at all, but no difficulty ought to arise in actual practice.
8. Paragraph (b) corrects a drafting error in Heading No. 12.
only applies on condition that the trans- action is done on the same day. That is to prevent evasion and to avoid parties to an exchange contract pretending a set- off is a genuine cancellation. One of the most important clauses in the Bill is paragraph (c) of clause 6, on conveyances. At present, conveyances under $20,000 pay duty at the rate of 50 cents per thousand and those above $1 per thousand. It is found that this has led to considerable splitting to avoid the higher scale. It is very hard to prove it but the conclusion is almost irresistible that splitting has occurred, and the proposal is to abolish the lower scale and apply the $1 through- out. Paragraph (1) of the same section alters the heading relating to the duty on
9.—Paragraph (c) proposes to abandon- transfers of shares. At present duty is the system of a double scale for convey- calculated on the market value. Market ances, and to charge $1 per 100 in every value is not a suitable term for shares case. There is reason to believe that which have no market e.g. shares in pri- the existennce of a scale has been taken vate companies. It is proposed to omit advantage of for the purpose of evading the word market in heading 14 (a) in duty, though it is almost impossible in the schedule of the Bill. Another provi- any given case to prove that such eva- sion secures that if a compradore ordersion has been intended.
with 10. Paragraph (d) deals is passed through a bank it must pay the same duty as a cheque.
question of the liability for stamping The COLONIAL SECRETARY seconded, and The object is to impose the liability on
exchange contract
notes.
the banks wherever a bank is concern ed. If neither party to the contract is a banker, the seller will remain liable to put on the stamps, as at present. The liability to see that the stamp duty is paid does not affect the question of the liability for the duty as between the see section 22 parties to the contract: (4) of the principal Ordinance, as amend- ed by this bill.
12
the Bill was read a first time.
The "
""
Objects and Reasons state:-
1. The object of this bill is to make in the Stamp Ordinance. 1921, certain amendments which experience has shown to be necessary.
2.-Clause 2 supplies a drafting omis- sion, and corrects a drafting error, in section 3 of the principal Ordinance.
3. Claose 3 amends section 10 of the principal Ordinance so as to throw the onus of proof upon the person who as- serts that there has been no splitting in order to evade stamp duty.
""
"
4.-Clause 4 deals with exchange con- tracts. The insertion of the words Or carried out is proposed because it might possibly be argued that the present section 22 of the principal Ordinance applies only to cases where something in the nature of cancellation takes place. Paragraphs (b) and (c) of clause 4 are explained in paragraph 10 below. The proposed new sub-section (7) of section 22 gives the Collector power to remit the duty on exchange contracts cancellation
|
cancellation
the
11.-Paragraphs (e), (f) and (g) repro- duce regulations which were made on the 17th June.
12. Paragraph (h) corrects a drafting error in Heading No. 33, sub-heading (7). 13. Paragraph (i) proposes to delete the word market in the sub-heading relating to the duty on transfer of shares. The reason for this amendment is that the term market value is not very appro- priate to the case of shares in private companies, or even to the case of shares in public companies which in fact have at the time no general market.
14.--Paragraph (j) proposes to insert certain headings in the schedule to the 'principal Ordinance.
ESTATE DUTY ORDINANCE
The ATTORNEY-GENERAL moved the first reading of a Bill intituled an Ordinance to amend the Estate Duty Ordinance,
1915.
He said: The position, at present, is not quite clear as to the liability of land in the New Territories to estate duty. The old rule was that probate duty is not payable at all in respect of New Territory land where the grant was made by the Supreme Court or by the Land Officer at Taipo or by the Southern Dis- trict Officer. What the Bill proposes is to make it quite clear that no estate duty is payable on any grant made by the Land Officer but it shall be payable if the land forms part of an estate grant of administration of which has been made by It is the Supreme Court in Hongkong. desirable to encourage the system of grants by the land officer, it is a simpler