STAMP DUTIES

353
(1909), 1 K.B. 677] which related to a resolution passed on
July 26, 1907, for an increase of capital to an amount not
exceeding £5,000,000, and two resolutions subsequently
passed for actual increases of £200,000 and £2,800,000 re-
spectively, upon which two sums duty was tendered and
refused, and it was held that duty was payable on the
£5,000,000.

Questions have arisen as to the liability to this duty in the
case of a consolidation or a re-arrangement of the capital
of a company. The leading case on this subject is the
Midland Railway Company v. The Attorney-General [(1902),
A.C. 171], which had reference to a Special Act of Parliament
by which the Midland Railway Company was authorised
to re-arrange and consolidate its several descriptions of
capital, and the effect of the arrangement was that (1) certain
stocks bearing interest at fixed rates were consolidated into
one stock bearing a uniform rate of interest, whilst the nominal
amount of the stock issued to some of the holders was increased
and (2) the ordinary stock was cancelled and extinguished, and
in lieu thereof two stocks each for the same amount were
created as ‘preferred’ and ‘deferred’ ordinary stocks. It was
held by the House of Lords that in each case the increase in
the total nominal amount of the stock was an increase in
respect of which the duty was payable.

In the same way the taking over by one company of the
business of another company, in consideration of shares
issued by the absorbing company upon an authority by
statute to increase its capital, was held to involve a liability
to the payment of duty by this company [Great Northern
Piccadilly and Brompton Ry. Co. v. A.-G. (1909), A.C. 1].

In the case of a registered company the statement is to
be delivered to the Registrar of Companies, and the duty on
the first capital is payable on registration, and on any in-
crease is payable within fifteen days after the passing of the
resolution by which the capital is increased.

In the case of any other corporation or company the
statement is to be delivered to the Commissioners of Inland
Revenue within one month after the date of the formation of
the corporation or company or of the increase being authorised.

Since the coming into force of the Finance Act, 1927, it will,
however, generally be possible to secure a substantial reduction
of the duty payable on the statement of nominal share capital
on a reconstruction or amalgamation [see s. 55 of the Finance
Act, 1927, as amended by s. 31 of the Finance Act, 1928, and
supra, p 210)