356 SECRETARIAL PRACTICE

Loan Capital. The duty on loan capital is charged by s. 8 of the Finance
Act, 1899, as amended by s. 10 of the Finance Act, 1907. It
is payable by every local authority, corporation, company,
or body of persons formed or established in the United
Kingdom upon a statement to be delivered to the Com-
missioners of Inland Revenue before the issue of the loan,
and the duty payable is charged at the rate of 2s. 64. per cent.
Loan capital is defined as meaning any debenture stock,
or any capital which is borrowed or has the character of
borrowed money. It 1s, however, provided that the duty is
not to be charged to the extent to which it is shown to the
satisfaction of the Commissioners that the stamp duty
payable in respect of a mortgage or marketable security has
been paid on any trust deed or other document securing the
loan capital proposed to be issued. In any such case a
statement need not be rendered. Questions have’ arisen
as to whether the conversion or consolidation of loan capital
is an issue of loan capital. This is illustrated by the case of
The Attorney-General v. The Regent's Canal and Dock Com-
pany (1904), 1 K.B. 263, which related to the issue of
debenture stock at one rate of interest in extinction of exist-
ing loans secured by three different debenture stocks at
varying rates of interest, the amount of the new stock issued
to each holder being such an increased amount as would enable
him to receive the same interest as he previously had. By
this means the nominal amount of the new stock considerably
exceeded the nominal aggregate amount of the three previous
stocks, and it was held by the Court of Appeal that there had
been an issue of loan capital in respect of which duty was
payable under the section.

The decision in this case was followed by the Court of
Appeal, and was affirmed by the House of Lords in the case of
The Attorney-General v. The London and India Docks Com-
pany (1909), A.C. 7, relating to an issue of debenture stock
in two classes which became merged in a new statutory
company where the operation did not involve the raising
from the public of any additional capital.

There is in this respect a marked difference between a
consolidation of nominal share capital and a consolidation
of loan capital, seeing that a consolidation of share capital
without an increase does not attract duty. The law was
accordingly amended by s. 10 of the Finance Act, 1907,
which provided that where after August 9, 19o7, duty has
been paid relating to loan capital, and there is afterwards a
conversion or consolidation of the loan capital to which the
statement relates. and a consequent delivery of a new statement