- The probate tax
There is a practice in the Probate Registry of the High Court of Lagos State of collecting a certain levy or tax (commonly referred to as estate duty) before granting Probate or Letters of Administration. Untold hardship and great inconvenience is suffered by many people who apply for probate or letters to administer the estate of deceased persons who die either with a will or intestate as a result of their inability to pay this tax. A huge amount of funds is tied up in banks because of the inability of dependants to access the monies left behind by their bread winners. Furthermore, capital is locked because of the inability of dependants to secure the legal title required to transfer property or use it to obtain credit facilities.
- Absence of statutory authority
Curiously, there appears to be no law or statutory instrument authorizing the collection of this tax. The Capital Transfer Tax Act 1979 was a Federal legislation which created a tax on the devolution or transfer of asset on the death of the owner of the property but since the repeal of the CTTA and the abolition of that tax in 1993 there appears to be no statutory authority to collect an inheritance tax of this nature. All taxes in Lagos state are collected by the Lagos Inland Revenue Service LIRS on behalf of the State Government or by the Local Governments. There is no provision in the Laws of Lagos State or specifically in the High Court Law or in the Probate Rules that authorises the collection of an estate tax. The Taxes and Levies (Approved List for Collection) Act 1998 (as amended by the 2015 Act) contains the list of taxes that are approved for collection by all three tiers of Government and nowhere in that legislation is an estate duty mentioned.
- Collection of tax
This tax is currently collected by the probate registry but the High Court is a not tax collection agency. Under the constitutional principle of separation of powers, it is the duty of the legislation to create and impose taxes; the executive to administer and collect the taxes; and the judiciary to interprete and enforce the tax laws. For this reason in particular, the estate duty is a strange tax. Therefore, it is my humble and considered opinion that the State Government should urgently grant legal backing to the estate tax or simply charge an administrative fee similar to the consent fee on land transactions. Whatever the case the current estate duty (10%) is exorbitant and should be reduced because the cumbersome and costly process of obtaining probate or letters of administration has forced many dependants to abandon the process.
Jide Bodede
08035130694
jide@lawfieldslawyers.com
