Mercury Tax - Law Society Practice Note

The Law Society has published a practice note on the execution of documents by virtual means. The practice note advises on good practice in the light of the Mercury Tax case (R (on the application of Mercury Tax Group and another) v HMRC [2008] EWHC 2721) and, following the publication of the City of London Law Society’s "virtual closing protocol", it suggests different options for so-called virtual signings and closings. A virtual signing is the signing of a document by a person who is distanced from the document that would ordinarily be regarded as the original, but who signs the original by submitting a signed execution page.

Practitioners may wish to follow the guidance given in this practice note. However, remember that: (a) if the document is registrable at the Land Registry, the Land Registry will require a document that bears a “wet ink” signature, and not one that bears a PDF or faxed copy of a signed execution page; (b) the Land Registry will reject an application to register a deed where parties appear to have signed separate execution pages which have then been put together to form a single document; and (c) Mr Justice Underhill, in the Mercury Tax case, might just have been right. All guidance and opinions given to date are based upon a narrow view of the Mercury Tax case, and a wide view of the concept of the “discrete physical entity” that Mr Justice Underhill referred to. Traditionalists may like to adhere to traditional methods of securing the execution of a document.