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Short title.
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1. This Act may be cited as the Transfer of Property Tax Act*.
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Charge of the Tax.
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2.
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(1) Subject to the provisions of subsection (4), where there is a transfer of ownership of any property in Sri Lanka to a person who is not a citizen of Sri Lanka, there shall be charged from the transferee of such property a tax of such amount as is equivalent to the value of that property.
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(1A) No transfer of ownership of any property in Sri Lanka, shall be effected to a person who is not a citizen of Sri Lanka, below such value as shall be specified by the Minister of Finance by regulations made in that behalf, with the concurrence of the Minister of Lands and the Chief Valuer, taking into consideration the prevailing value of land in any Administrative District, Divisional Secretary’s Division or Grama Niladhari Division as the case may be .
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(2) The tax referred to in subsection (1) is hereinafter referred to as ” the tax “.
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(3) A person liable to the tax shall pay the tax to the Registrar of Lands of the district in which the land transferred is situated before the instrument by which the transfer of that land was effected presented for registration in accordance with the provisions of the Registration of Documents Ordinance.
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(3A) Where there is a transfer of ownership of any property within Sri Lanka to a company there shall be charged from the transferee of such property, a tax of such amount as is equivalent to the value of that property, if more than twenty five per centum of the issued shares in such company are owned by persons who are not citizens of Sri Lanka.
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(4) The preceding provisions of this section shall not apply to-
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(a) the transfer of any land to any commercial bank (within the meaning of the Monetary Law Act) or body of persons carrying on the business of insurance which is not a citizen of Sri Lanka arising out of the sale of such land to such bank or body of persons in execution of a decree of court to enforce the mortgage of such land whether before or after the date of operation of this Act as security for a loan or advance given by such bank or body of persons;
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(b) the sale of any land to any person who is not a citizen of Sri Lanka if it is proved to the satisfaction of the Registrar of Lands, who is responsible for the collection of the tax, that the negotiations for such sale had commenced before the date of operation of this Act, and the instrument for the transfer of ownership of such land was effected in consequence of such negotiations;
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(c) the transfer of any land, to any commercial bank (within the meaning of the Monetary Law Act), or a company which is a nominee of such bank, in its capacity as trustee under any instrument whatsoever;
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Subsection (d), (e), (f) Deleted by [§ 2,22 of 1992]
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(g) the transfer of property of any such class or description or the transfer of property to any person, body of persons or category of persons as is specified by Order made by the Minister. Every such Order shall be published in the Gazette.
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(5) The preceding provisions of this section shall be deemed to have come into operation on August 1, 1963.
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Effect of the non-payment of the tax.
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3. Where a person liable to the tax in respect of any property does not pay the tax as required under this Act the tax shall be deemed to be in default, and the Commissioner-General of Inland Revenue shall, upon notification of such default by the Registrar of Lands take steps for the recovery of the tax deemed to be in default. For the purposes of such recovery the provisions of the Inland Revenue Act, No. 4 of 1963, or the Inland Revenue Act (No. 28 of 1979), shall, mutatis mutandis, apply in like manner and to the same extent as such provisions apply for the recovery of any tax in default under those Acts.
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Non-citizens to whom ownership of any land is transferred to sign a declaration in instrument of transfer.
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59A. Where the ownership of any land, is transferred to any person, being a person who is not a citizen of Sri Lanka and who is liable to the tax, such person shall sign a declaration at the foot of the instrument effecting such transfer stating that he is not a citizen of Sri Lanka. The signature of the declarant shall be attested by the notary attesting such instrument.
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Conditions for the registration of instruments relating to transfers of property.
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4.
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(1) Where an instrument effecting a transfer of ownership of any land to any person is presented for registration, in accordance with the provisions of the Registration of Documents Ordinance, to the Registrar of Lands, the Registrar shall, subject to the provisions of that Ordinance, register such instrument:
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Provided, however, that where such instrument contains a declaration referred to in section 59A the Registrar shall refuse to register such instrument unless and until the tax payable in respect of the transfer effected by such instrument has been paid to him.
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SubSection 2, 3 Repealed by [§ 4,22 of 1992]
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Persons transferring-property between August 1,1963, and the date of enactment of this Act to non-Sri Lankan liable to the tax.
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5.
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(1) Where a transfer of ownership of any property to a person who is not a citizen of Sri Lanka has been effected on any date during the period commencing on the first day of August, 1963, and ending on the date on which this Act becomes an Act of Parliament, and-
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(a) where the instrument by which such transfer was effected has, if such property consists of land, been registered in accordance with the provisions of the Registration of Documents Ordinance, or
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(b) where such property consists of shares in a company, such transfer has been registered in the registers maintained by that company for the purposes of the transfer of shares, before the expiration of such period, then the transferee of such property shall be liable to the tax.
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(2) A person who is liable to the tax under subsection (1) shall, upon being requested by notice in writing sent to him by the Registrar of Lands, or the company, as the case may be, by registered letter through the post, pay to such Registrar or company, within the period specified in such notice, the amount of the tax specified in the notice, such amount being an amount equivalent to the value of the property transferred to the person who is not a citizen of Sri Lanka.
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Sums paid or recovered as the tax to be credited to the Consolidated Fund.
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6. All sums paid to or recovered by a Registrar of Lands as tax under this Act shall be credited by such Registrar to the Consolidated fund.
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Proceedings for the recovery of tax due from persons liable under section 5.
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7. Where any person fails to pay the amount of the tax specified in a notice sent to him by a Registrar of Lands or a company under subsection (2) of section 5, such amount shall be deemed to be in default, and such Registrar or company may issue a certificate containing particulars of such amount and the name and address of the defaulter to a Magistrate having jurisdiction in the division in which such defaulter resides. The Magistrate shall thereupon summon the defaulter before him to show cause why proceedings for the recovery of the tax in default should not be taken against such defaulter, and if sufficient cause is not shown, the amount of the tax in default shall by order of the Magistrate be recovered as if it were a fine imposed by the Magistrate on such defaulter.
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8.
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Subsection 1 Repealed By [§ 6,22 of 1992]
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(2) Every person who is liable to the tax under subsection (1) of section 5 shall notify in writing, within fifteen days after the date on which this Act becomes an Act of Parliament,-
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(a) if the property consists of land, the Registrar of Lands of the district in which the land transferred by an instrument referred to in that subsection is situated, of the fact of the execution of such instrument, or
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(b) if the property consists of shares in a company, the company in the registers of which the transfer of such shares was registered, of the fact of the transfer of such shares.
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(3) Any person who fails to comply with the provisions of subsection (2) shall be guilty of an offence under this Act, and shall, on conviction after- summary trial before a Magistrate, be liable to a fine not exceeding one thousand rupees or to imprisonment of either description for a term not exceeding six months or to both such fine and imprisonment.
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(4) Any person, being a person who is required by section 59A. to sign a declaration in an instrument effecting a transfer of ownership of any land to such person, who fails, to sign such declaration shall be guilty of an offence under this Part of this Act and shall on conviction after summary trial before a Magistrate be liable to a fine not exceeding one hundred thousand rupees or to imprisonment for a term not exceeding two years or to both such fine and imprisonment and in every case, to an additional penalty equal to twice the value of the land transferred by such instrument.
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(5) Where an offence under subsection (4) is committed by a body of persons, then
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(a) if that body of persons is a body corporate, every person who at the time of the commission of the offence was a director, manager, secretary or other similar officer of that body corporate; or
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(b) if that body of persons is a firm, every person who at the time of the commission of the offence was a partner of that firm,. shall be deemed to be guilty of that offence unless he proves that the offence was committed without his knowledge or connivance and that he exercised all such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of his functions and in all the circumstances.
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This Act to prevail over other written law.
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9. The provisions of this Act shall have effect notwithstanding anything to the contrary in any other written law.
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Interpretation.
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10. In this Act, Unless the context otherwise requires,-
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” citizen of Sri Lanka”-
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(a) in the case of a person who is an individual, means an individual who is a citizen of Sri Lanka under any law for the time being in force relating to such citizenship,
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(b) in the case of a person which is a company, means a company to which Pan XI of the Companies Ordinance * does not apply, and
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(c) in the case of a person which is a firm consisting of two partners, means a firm where both partners are citizens of Sri Lanka, and in the case of a firm consisting of more than two partners, means a firm where the majority of the partners are citizens of Sri Lanka;
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“company” means a company incorporated or registered under any law in force in Sri Lanka or elsewhere;
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” land ” includes-
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(a) any land covered with water;
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(b) any house or building or any part thereof; and
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(c) any undivided share of any land;
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” market value”, with reference to the transfer of any property otherwise than by sale, means the price which that property could have fetched on the date of the transfer in an open market;
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” property ” means any land ;
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” transfer of ownership “, with reference to any property, means the transfer of ownership of that property by sale, gift or in any other manner whatsoever other than a transfer of ownership arising-
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(b) by gift or testamentary disposition by any individual to his spouse, child, parent, brother or sister, and the issue of such child, brother or sister who is not a citizen of Sri Lanka; or
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(c) upon the succession of any person as trustee to a person appointed as trustee under a will or any instrument of trust or of any provident fund or any investment;
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” transferee ” includes-
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(a) in the case of a transfer of ownership by a deed of gift, the donee; and
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(b) in the case of a transfer of ownership by gift by a testamentary disposition, the person to whom it is so gifted; and
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” value ” means-
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(a) in the case of any property of which the transfer of ownership took place by sale, the price realized by such sale;
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(b) in the case of any property of which the transfer of ownership took place otherwise than by sale, the amount equal to the market value of such property on the date of such transfer.
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