CONSIDERATION. Consideration has been defined as " some right, interest, profit, or benefit, accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other." Upon a sale of property, the purchase price is the consideration, and that amount is inserted in the deed of conveyance, and the stamp duty, ad valorem, calculated thereon.
In a deed of gift, as, for example, where a property is the subject of a gift from, say, a father to his son, the consideration may be " natural love and affection." With regard to the stamp duty on gifts inter vivos, the Finance (1909-10) Act, Section 74, enacts that any conveyance operating as a voluntary disposition inter vivos, shall be chargeable with the same duty as if it were a con veyance on a sale, with the substitution of the value of the property conveyed for the amount of the consideration. (See CON VEYANCE.) The consideration named in a transfer, upon a sale of stock or shares, may differ from the amount received by the original seller, owing to subsequent sales having taken place. The price paid by the last purchaser is the one inserted in the transfer, and on which stamp duty is paid. The difference is explained in a printed foot-note on transfer forms, and this foot-note justifies a transferor in executing a transfer where the consideration differs from the amount received by him.
In a transfer of shares to a bank or its nominees as security for a loan or advance, the consideration is usually a nominal one, say five or ten shillings ; and the same nominal consideration is inserted in a transfer when the shares are being transferred as a gift.
Where shares are specifically left in a will, the consideration in a transfer from the executors to the legatee will be a nominal one ; but where a legatee agrees to accept a transfer of certain shares, instead of re ceiving the cash to which he is entitled, the consideration must be the price agreed upon between the legatee and executors, and the stamp duty will be ad valorem.
All deeds prior to the Conveyancing Act, ISS1, should have indorsed thereon a receipt for the consideration stated in the body of the deed. Since that date it is sufficient if the receipt is in the body of the deed. It must, however, be an actual receipt and not simply a statement that the money has been paid. (See NOMINAL CON SIDERATION.)