ik /' y^y •-# y /y-V y ^ ^ & 'f y y^f ^ yyy/,yShy ^ ^y K. fyyyyyyi y^ -y 'yy^ fiy y ■ yy /fy /y '//l ! y y rjy yy ^y yy /yyyy y 'i yyy/ i' 'y yiy" y y /y y y/. ■4 y y yygy o'yy -s- 'ifyyyyy, 'y, ,'yf y ' '' ACT, 1894 VicT.. c jo)>. ;t.4TES TO THE Ind the f /'• •/• . .U.i^ /EXTMI^O. BOUGHT WITH THE INCOME FROM THE SAGE ENDOWMENT FUND THE GIFT OF $l«nrg W. Sage 189X ...4 8:M.0..:i.-A:. _i^/r^96; Cornell University Library HJ5813.G7 A4 The F Act 1894, (57 & 58 Vict. c. olin 3 1924 030 223 451 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030223451 ESTATE DUTY AND SUCCESSION DUTY. THE FINANCE ACT, 1894 (57 & 58 VICT. c. 30), so FAK AS IT KKLATES TO ESTATE DUTY AND THE SUCCESSION DUTY, WITH AN INTRODUCTION AND NOTES J. B. CRAWFORD MUNRO, LL.M. or THE MIDDLE TEMPLE, BAREISTER-AT-LAW. LONDON: EYRE AND SPOTTISWOODE, GOVEKNMENT AND GENERAL PUBLISHERS, EAST HARDING STREET, E.G. 1894. PEEFACE. The Finance Act, 1S94. consists of six parts. The first part and the Schednles relate to the new Estate duty ; the second part deals with Customs : the third part deals with Excise : the fotirth part with Income Tax ; the tifth part with Composition for certain SLamp Duties and the exemption of Coupons from Ihity ; and the sixth part with Imperial and Xaval Defence loans. The first part is the only portion of the Act discussed in the jresent work, hut the 35th section which tears on the calculation of "principal value " is incorporated. I desire to express my grateful thants to Mr. J. Gerard Laing, of the Middle Temple, for valuable assistance in seeing the work through the press. J. E. C. M. 2; Xew Square, Lincoln's Inn. TABLE OF CONTENTS. Intkoduction. Objeoti3 of the Act «" Commencement of the Act - - • - xv The position of an executor : — (i.) Eendering an'aocount .,.--- xvi (ii.) Paying Estate duty ----- xvii The position of trustees and beneficiaires : — (i.) Rendering an account ------ xvii (ii.) Paying Estate duty . - - - xviii Property liable to Estate duty ^'^lii Property not liable to Estate duty - - - . xx Talnation of property liable : — (i) Principle of valuation : — Agricultural property ..---- xxi (ii.) Who determines the value : — (a.) The Commissioners ----- xxiii (6.) Yaluers ----- xxiii (c.) The Court - xxiii Amount of duty - - - - - 2i:xiv (i.) Aggregation . - - - xxiv (ii.) Allowances - - - - . - . xxt (iii.) The rate of duty ----- xxvi (iv.) Interest - - - - ... xxvi (v.) On small estates - - - xxvii Time of payment - - - - . xxvii Unpaid duty a charge - - - - xxviii Incidence of Estate duty - xxviii Discharge from the duty - - - xxix Repayment -- ..-.-- xxx Property situate out of the United Kingdom : — (i.) In a Foreign State ----- xsx (ii.) In a British Possession - - - - . sxxii ■Settled property - - - xxxiii Succession duty - - .... xxxiii Suggestions ------- xxxiv Form of affidavit - - xxxv Paut I. — Estate Duty. Grant of Estate Duty. Sect. 1. Grant of Estate duty ....... 2 2. What property is deemed to pass . - . . 5 8. Exception for transactions for money consideration - 12 4. Aggregation of property to form one estate for purpose of duty - - - - - - -14 6. Settled property - 15 Vlll TABLE OF COXTENTS. Pager, Collection and Recovery of Duty and Value of Property. 6. Collection and recovery of Estate dnty - - - 19 7. Value of property .--.-.. -23- 8. Supplemental provisions as to collection, recovery, and repayment of and exemption from Estate duty - - 35- 9. Oharge of Estate duty on property and facilities for raising it---.- - - - -48 10. Appeal from Commissioners 51 Discharge from and Apportionment of Duty. 11. Release of persons paying Estate duty - - - 54 12. Commutation of duty on. interest in expectancy - - 56- 13. Powers to !i,ccept composition for death duties - - 57 14. Apportionment of duty .--.-. 59' 15. Exemptions from Estate duty - - • - 60' Small Estates. 16. Provision for estates not exceeding 1,000L - - - 62 Bates of Estate Duty. 17. Scale of rates of Estate dnty - - . - 66 Succession Duty. 18. Value of real successions for succession duty - - - 66 Local Taxation Grant. 19. Adaptation of law as to probate duty grant - - 69 British Possessions. 20. Exception as to property in British Possessions - - 69 Savings and Definitions. 21. Savings - - ... 71 22. Definitions - - 73 Application to Scotland. 23. Application of part of Act to Scotland - - - 77 Commencement. 24. Commencement of part of Act - .... 85 Short Title. 42. Short title ... ... 83 Schedules ... §4 .>^^0-3«cCN^=4- TABLE OF CASES. Page. Advocate-G-eneral, Thomson v., 12 CI. & F. 1 - - - 10 Archbishop of Canterbury, Paice v., 14. Ves. 364 - 24 Attorney-General v. Bouwens, 4 M. & W. 171 - - 10, 12 Attorney-General v. Campbell, L.R. 5 H.L. 524. - - 11 Attorney-General v. Chapman, 2 Q.B. 526 . - - 9, 10 Attorney-General r. Dimond, 1 Cr. & J. 356 - - 10, 12 Attorn^-Gcneral v. Gosling, 1 Q.B. 546 - 9, 10 Attorney-General c. Heywood, 19 Q.B.D. 326 ; 56 L.J. Q.B. 572 - . - 9 Attorney-General v. Higgins, 2 H. & N. 339 - - 11 Attorney-General r. Hope, 1 CM. & K. 630 ; 2 CI. & P. 84 - 10, 12 Attorney-General u. Theobald, 24 Q.B.D. 667 - 10 .Attorney-General t). Wallace, L.R. 1 Ch. 1 - - 10 Baker, Johnson t;., 2 C. & P. 207 - - - 24 Bouweus, Attorney-General v., 4 M. & W. 171 10, 12 Bridge v. Brown, 2 Y. & C. 181 - 24 Bremer v. Freeman, 10 Moo. P.C. 306 - xxxi Brodic r. Brodie, 2 Sw. & Tr. 259 - - 26 Brooks,' Colquhoun II., 19 Q.B.D. 407 11 Brown, Bridge v., 2 Y. & C. 181 - - - 24 Campbell, Attorney- General v., L.R. 5 H.L. 524 - - 11 Chapman, Attorney-General v., 2 Q.B. 528 - 9, 10 Colquhoun v. Brooks, 19 Q.B.D. 407 . . . . H Colvin, Lord v., L.R. 3 Eq. 737 - - - - 72 Commissioners of Inland Revenue, Conservators of River Thames v., 18 Q.B.D. 279 ; £6 L. J.Q.B. 181 ; 66 L.T. 198 ; 35W.R. 274 - 3 Commissioners of Inland Revenue, Limmer Asphalto Co. r., L.R. 7 Ex. 211; 41 L.J. Ex. 106; 26 L.T. 633; 20 W.R. 610 - - - - - 3 Commissioners of Inland Revenue, Potter i'., 10 Ex. 147; 23 L.J. Ex. 345 - 3 Conservators of River Thames v. Commissioners, 18 Q.B.D. 279 ; 56 L J.Q.B. 181 ; 66 L.T. 198 ; 36 W.R. 274 - - 3 Grossman r. The Queen, 18 Q.B.D. 256 ; 56 L.J.Q.B. 241 - 9 De Mestre i'. West, 1891 App. Cas. 264; 60 L.J.P.C. 66; 64 L.T. 375 ... - - 10 Dimond, Attorney. General v., 1 Cr. & J. 356 - - 10, 12 Don V. Lippmann, 6 CI. & F. 1 - - - 26 Earl Howe n Earl of Lichfield, L.R. 2 Ch. App. 166 - - 64 Earl of_Glasgow, Lord Advocate v., 12 Sco. L.R. 216 - 32 Femandcs' Executors' Case, L.R, 5 Ch. 314 - - 10, 11 Flower, Tourton v., 3 P. Wms. 870 - - - - xxxii X TABLE OF CASES. Forbes, Whicaker v., L.R. 10 C.P. 583 ; 1 C.P.D. 51 - - 11 Treeman, Bremer 1)., 10 Moo. P.O. 306- .... sxsi Gosling, Attorney-Greneral v., 1 Q.B. 545 - - - 9, 10 Handcook v. Podmore, 1 B. & Ad. 260 - - - 24 Heywood, Attorney.General v., 19 Q.B.D. 326; 66 L.J.Q B. 672 - ... ... 9 Higgins, Attorney-General ■«.. 2 H. & N. 339 - - ]1 Hope, Attorney.General v., 1 CM. & R. 530 ; 2 01. & F. 84 - 10, 12 In re Oameron and Wells, 37 Oh. D. 32 ; 67 L. J. Oh. 69 - 10 In re Oigalas' Trusts, L.R. 7 Oh. D. 351 - - - 11 la re Earl Oowley, L.R. 1 Ex. 288 - - - 80 In ro Lovelace's, Trusts, 4 De G. & J. 340 - - - 11 In re Mackenzie's Trusts, 23 Oh. D. 750 ; 52 L.J. Oh. 726 - In re Wallops' Trusts, 1 De G. & S. 656 - - - 11 Johnson v. Baker, 2 0. & P. 207 - . - - 24 Lee V. Moore, Palm 165 - - - - xxxii Limmer Asphalte Oo. v. Oommtssioners, L.R. 7 Ex. 211; 41 L.J. E.'c. 106 ; 26 L.T. 633 ; 20 W.R. 610 - - - 3 Lippmann, Don t'., 5 01. & F. 1 26 Lord V. Oolvin, L.R. 3 Eq. 737 - ... 72 Lord Advocate v. Earl of Glasgow, 12 Sco, L.R. 215 - - 32 Lyall V. Lyall, L.R. 15 Eq. 1 - - 11 Milles, Smith v., 1 T.R. 475 xxxi Moore, Lee t'.. Palm, 165 - . - ... xxxii Niboyet v. Niboyet, 4 P.D. 1 ; 48 L.J.P.D. 1 . - .26 Offley V. Offley, Prec. Chan., 26 - - 24 Paice V. Archbishop of Canterbury, 14 Yes. 364 - - 24 Podmore, Handcook v., 1 B. & Ad. 260 - - 24 Potter V. Commissioners, 10 Ex. 147 ; 23 L.J. Ex. 345 - 3 Punter, Stag r., 3 Atk. 119 24 Re Parsons, Stocklcy r. Parsons, 45 Ch. D. 51 ; 59 L.J. Oh. 666 ; 62 L.T. 929 ; 38 W.R. 712 - ... 4 Smith V. Milles, 1 T.R. 476 . - - . . xxxi Stag V. Punter, 3 Atk. 119 - - . - - 24 The Queen, Grossman v., 18 Q.B.D. 256 ; 56 L.J.Q.B. 241 - 9 Theobald, Attorney-General v., 24 Q.B.D. 557 - - 10 Thomson v. Advocate-General, 12 01. «»«cft^tS«. 37 INTRODUCTION. The Finance Act, 1894, substitutes the Estate duty for all duties in the nature of Prohate duty. The Legacy and Succession duties remain, but Succession duty, both as regards the rate and valuation of property, is to be levied on principles similar to those hitherto applied to Legacy duty. The duties in the nature of Probate duty were three in number : — 1. The Pi'obate duty, strictly so called, levied on all personalt}'', locally situated within the United Kingdom, that vested in the executor or admini- strator as such. The duty was payable as a stamp duty on the affidavit in England or Ireland, and on the inventory in Scotland (44 & 45 Vict. c. 12). 2. The Account duty levied on donationes mortis causa and voluntary gifts and settlements made within twelve months of the death (44 & 45 Vict. c. 12. g. 38). The object of the Account duty was to prevent the evasion of Probate duty by voluntary gifts. 3. The temporaiy Estate duty of 1 per cent, levied on personal property where the valus of the estate and effects in respect whereof duty was charged on the affidavit or inventory exceeded 10,000?. (52 Vict. c. 7. s. 5). The Succession duties imposed by the 16 & 17 Vict. c. 61. were increased in 1888 by 10s. per cent, in the case of lineals, and 11. 10s. per cent. in. the case of others (51 Vict. C. 8.), and in 1889 by 1 per cent, where the value of the succession exceeded 10,000Z. (52 Vict. c. 7. s. 6). The Legacy duty is payable under the 06 Geo. III. c. 52., as amended by sul-sequent Acts. XIV INTRODUCTION. The following table shows the rates of Legacy and Succession duties at the date of the passing of the Finance Act:— LeKacy Duty. Succession Duty. A. Death B. Death on or C. Death on or after 1st June 1889, and Value of Succession before 1st July 1888. alter 1st July 1888. over 10,001) i. £ £ £ s. & s. 1 . Lineal issue or lineal ancestor I 1 1 10 2 10 2. Brother or sister or descen- 3 3 4 10 5 10 dants of brother or sister. 3. Brother or sister of father 5 5 6 10 7 10 or mother or descendant of such brother or sister. 4. Brother or sister of grand- 6 6 7 10 8 10 father or descendant of such brother or sister. 5. Evcrj other person - 10 10 11 10 12 10 Some important changes were introduced by the 44 Vict. c. 12. in regard to Ijegacy duty. Where the gross value of the whole of the personal estate and eflfects of the deceased did not exceed SOOi. the payment of a fixed Probate duty covered all Legacy or Succession duty in respect of the effects disclosed by the affidavit, and the lineal issue or lineal ancestors were exempted from the 1 per cent. Legacy or Succession duty. But this exemption did not apply to the proceeds of real estate directed to be sold or to foreign assets or property. The Finance Act abolishes the Succession duties marked B. and C. in the above table. The 1 per cent, duty, in so far as legatees or successors are liable to pay the same, is also abolished (First Schedule). The result is that the rates of Legacy and of Succession duty will, for the future, be the same, viz., 31., U., U., or \Ql. per cent., according to the degrees of relationship set out in the above table. rosition of executor. xv Commencement of the Act. The Act, in so far as it affects the death duties, comes into force " c.n the expiration of the 1st day of August, 1894," s. 24. In the case of persons who die on or before that day Probate duty will be payable as if the Act had not passed : in the case of those who die after that day Estate duty will be payable, s. 21 (2). Settled est3,tes will be liable to Estate duty on the death of the tenant for life after the 1st August 1894, though the settlement may have come into foice before that date. Two privileges are, however, granted by the Act in the case of such last-mentioned settlements : first, the settlement Estate duty of 1 per cent, is not payable, s. 21 (4), and secondly, in the case of settlements of personal pro- perty made by a person dying on or before the 1st August 1894, where Probate duty under the Customs and Inland Eevenue Act of 1881 is payable, Estate duty is not to be pay- able unless the deceased had been competent to dispose of the property at any time subsc quent to the settlement taking effect, s. 22 (1). The Act also confers certain exceptions in favour of interests in expectancy sold or mortgaged, and of marriage settlements that have taken effect, before the commencement of the Act, s. 2 J (3) (5). Position of the Executok. Tl;e Act approaches the subject of Estate duty chiefly from the point of view of the executor. The word executor is defined by the interpretation section as meaning the executor or administrator, or executor de son tort of a deceased person, s, 22 (1) {d.) As applied to Scotland, executor means " every person who, as executor, nearest of " kin, creditor, or otherwise, intromits with or enters upon '' the possession or management of any personal property " of a deceased person," s. 23 (11). In th's introduction the word executor will be used as meaning the executor or the administrator, or any of the persons above mentioned. XVI INTEODTJCTION. The position of the executor may be considered under two heads : (i.) his duty to render an account, and (ii.) his duty to pay the Estate duty. (i.) The Executors duty to render an Account. The executor, on applying for probate, is to specify in appropriate accounts annexed to the Inland Revenue affidavit, all the property in respect of which Estate duty is payable, s. 8 (3), s. 22 (1) {n). Hitherto, on applying for probate, the executor was required to lodge with the Inland Revenue affidavit an account of the personal estate situate in the United KingJom passing to him by virtue of his office. For the future the executor will have to include in his account all the property of the deceased, real or personal, settled or unsettled, whether situate in the United Kingdom or abroad, on which Estate duty is pay- able. As we shall see, he is not under a legal liability to pay Estate duty on all such property. The object of the account is, not merely to enable the Commissioners to ascertain the amount of duty payable by the executor, but also to give them the information necessary to enable them to collei;t the Estate duty from other persons who are liable to pay the same. It is not the duty of the executor to delay his application for probate until he can furnish an absolutely full and correct account. It is sufficient if he furnishes an account " to the best of his knowledge and belief " at the time of application. If he has reason to believe that property of whioh he does not know the amount or the value, e.g., personal property situate abroad, he maj' state that such property exists, but that he does not know its amount or its value, and that he undertakes, as soon as the amount and the value are ascertained, to bring in an account thereof, and to pay all further duty, s. 6 (3). The executor's account should be, if possible, carried in within six months of the death of the deceased. After the expiration of such six months the duty becomes in arrear, s. 6 (6\ POSITION OF EXECUTOR. XVU (ii.) The Executors liability to pay Estate Duty. The executor is bound to pay Estate duty only on the personal property of the deceased of which the deceased was competent to dispose, wherever situate, s. 6. ',2). He is not bound to pay the duty on real estate, but he is required to pay duty, not only on the personal property that belonged to the deceased, but on settled personalty, s. 6, and on personalty over which the deceased had a general power of appointment, s. 22 (2), and on personalty situate abroad, if the deceased dies domiciled in this country, .s. 2. (2). In no case is he to be liable for any duty in ■excess of the assets which he receives as executor, s. 8 (3). It is quite possible that a testator who owns property in England and abroad may appoint a double set of executors, ^ne set in respect of property situate in the United King- 'dom and the other set in respect of property ia a colony ■or in a foreign state. The English executors will then be liable for duty in respect of the foreiga personal estate up to the amount of the English personal estate. If the latter be very small the foreign personality may practically escape the Estate duty. Though not bound to pay duty on any property except personal property, the executor ha^ an option given him of paying the duty on (1) any other property that passes on the death, which by the will is under his control, and (2) in the case of property not under his control, if the persons accountable for the duty request him to make such payment, s. 6 (2). It is not probable that executors will exercise this discretion, except where the person liable for the duty advances it to the executor at or before the iime of payment of the duty by the executor. The position of Trustees, Beneficiaries, &c. (i.) To render an Account. In the case of property (other than personal property that passes on the death of the deceased) the following classes of persons may be called on to furnish an account : — 1. Persons who take a beneficial interest in possession. b xviii INTRODUCTION. 2. Trustees, guardians, and committees to the extent of the property received. 3. Any other person in whom any interest in the pro- perty so passing, or the management thereof is vested to the extent of the property received. 4. Any person in whom the property is vested in. possession by alienation or ether derivative title. (ii.) To pay Estate Duty. The above classes of persons who may be called on for arr aciount are also liable to pay the Estate duty. But the principle underlying the Act is that in the case of realty the person who takes the property left by the testator, or who benefits by the death of the testator, is to bear a pro- portionate share of the duty, s. 14. It is open to a testator to appropriate a specific fund to the payment of Estate duty or to direct that it shall fall on the residuary estate, but where no such appropriation is made or direction given, the beneficiaries of real estate must ultimately bear the incidence of the duty. Where a trustee pays the duty he has full power to raise the same, s. 9 (5). Property liable to Estate Duty. Estate duty is payable in respect of all property real or personal, settled or unsettled, " passing on the death." The phrase " passing on the death " is used with a technical meaning. The object of the Act is to impose duty not merely on the property of which a testator could dispose, but on all the property he enjoyed at the moment of his death and on all gifts made within twelve months of the death. The following classes of property are liable to Estate, duty : — 1. All property of which the deceased at the time of his death was competent to dispose, s. 2 (a\ By s. 22 (2) a person is to be deemed competent to dispose of property if he has such an estate or interest therein or such " general power " as would, if he were sui juris, enable him to dispose of the property, including a tenant in tail, whether in possession or not. The expression " general power '" PROPERTY LIABLE TO DUTY. xix includes eveiy power or authority enabling the donee to appoint or dispose o£ property as he thinks fit. It follows that if the deceased had a general power of appointment over property, such property will be liable to Estate duty though the testator did not exercise such power. In the three following cases the deceased is not to be regarded as competent to dispose of property within the meaning of the Act : — i. Where he has a power of disposition exercise- able in a fiduciary capacity under a dis- position not made by himself. ii. Where he has a statutory power of sale as tenant for life under the Settled Land Act, 1882. iii. Where he has a power of disposition as mortgagee, s. 22 (2). In Scotland an institute or heir of entail in possession of an entailed estate, whether sui juris or not, is deemed to be a person competent to dispose of such estate. Interests ceasing on the death of the deceased to the extent to which a benefit accrues or arises by the cessor of such interest. The deceased, for example, may have enjoyed a life interest charged on real estate To the extent to which the owner of such real estate benefits by the cesser of the charge, the life interest is regarded as liable to Estate duty, and is to be included in the aggregate of the property that determines the rate of duty, s. 2 (1) (6). But if the person who enjoyed the life interest is a person other than the deceased, then the value of the life interest in certain cases is not to be aggregated with the other property of the deceased that passes on death, but is to form an estate by itself, s. 4. Sometimes a life interest in pi-operty is enjoyed by a person as a holder of an oflSce or as the recipient b 2 XX INTRODUCTION. of a charity or as a corporation sole, sucli as a beneficed clergyman. A life interest in such cases is not to be regarded as passing on the death of the deceased. 3. Bonationes mortis causa, s. 2 (1) (a). 4. Gifts made by any disposition inter vivos within 12 months before death, s. 2 (1) (c). 5. Gifts made at any time -where the possession and enjoyment was not immediately assumed by the donee and retained to the exclusion of the donor, s. 2 (1) (c)._ 6. Property which the deceased caused to be vested in himself and another so that on his death it passes to the survivor, s. 2 (1) (c). 7. Property settled by the deceased otherwise tban by will, in which he retains a life interest or a power to restore it to liimself, s. 2 (1) (c). .8. The beneficial interest in any annuity purchased by the deceased alone or jointly with another to the extent to which such interest arises or accrues by survivorship on his death, s. 2 (1) (d). D. Moveable property situate abroad if the deceased dies domiciled in the United Kingdom, s. 2 (2). 10. Settled property, ss. 1, 5, 22 (3). 11. In Scotland — (a.) Any property comprised in any special arrange- ment or disposition taking effect on death, s. 23 (12). (h.) Entailed Estates, s. 23 (^16) (19). Property not liable to Estate Duty. Though, as a lule, all property that passes on death is liable to Estate duty, certain exceptions are found in the Act. 1. Property that passes by reason of a bona fide pur- chase for full value from the person under whose disposition it passes, s. 3 (1). VALUATIOX. XXl 2. Property that passes by reason of the ftilling into possession of a reversion on an estate for lives purchased for full value, s. 3 (1). 3. Property that passes by reason of the determination oi' an annuity purchased for full value. 4. An annuity not exceeding 251. purchased by the deceased for the life of himself and another and the survivor of them to arise on his own death in favour of the survivor. Only one annuity is entitled to exemption, s. 15 (1). 5. Pensions or annuities payable by the Government of British India to the widow or child of a deceased officer, s. 15 (3). 6. Advowsons or church patronage which are free from Succession duty under s. 24 of the Succession Duty Act, 1853, s. 15 (4). 7. Settlements of personal property made by a person dying on or before the 1st day of August 1894 in respect of which probate duty has been paid or is payable, s. 21 (1). 8. Property of soldiers or seamen dying in Her Majesty's service, s. 8 (2). Valuation of PaoPERTY liable. (i.) Principle of Valuation. The different kinds of property liable to Estate duty are to be estimated at the price which, in the opinion of the Commissioners, such property would fetch if sold in the open market at the date of the death of the deceased. Special provisions have been introduced relating to (a) agricultural property; (6) interests in expectancy; and (c) interests arising from cesser. (a.) Agricultural 'property. — In the case of agricultural property, if no part of the principal value is due to the expectation of an increased income from such property, the principal value is noi^ to exceed 25 times the annual value as assessed under Schedule A. of the Income Tax Acts after making such deductions as have not been allowed in XXir INTRODUCTION. that assessment and are allowed under the Succession Duty Act, 1853, and making a deduction for expenses of management not exceeding 5 per cent of the annual value, s. 7 (5). Agricultural property means agricultural land, pasture, and woodland, including such cottages, farm buildings, farm houses, and mansion houses (together with the lands occupied therewith) as are of a character appropriate to the property, s. 22 (1) (g). From 25 times such annual value the deductions allowed by the Succession Duty Act, 1853, are to be made. The Succession Duty Act permits all necessary outgoings to be deducted. Tlie following are regarded as necessary outcroinofs : — 1. Chief rents. 2. Fines, compositions, and reliefs incident to the tenure, and paid by the successor. 3. Premiums on fire insurance. 4. Repairs, if they have to be executed by the landlord. 5. Tithes and tithe rentcharge, if payable by the successor, and where the property is actually let. 6. Rates, provided they have been paid by the owner, and provided the property tax assessment, or the gross assessment to the poor, is not returned as the annual value. 7. The land tax, if paid by the owner. 8. Drainage charges. 9. Incumbrances, if not created by the successor. 10. Money laid out in substantialrepairs, or in permanent improvements. 11. Unpaid instalments of Succession duty. 12. Relinquished property. Expenses of management are not regarded as " necessary outgoings," but by s. 7 (5) they may be deducted as regards Estate duty up to 5 per cent, of tlie annual value. These deductions being made, we arrive at the " principal value " of agricultural property. Such deductions must be •VALUATION. XXlll ■distinguished from the deductions in respect of debts and incumbrances under s. 7 (1) mentioned below. (6.) Duty on interests in expectancy. — The duty on in- terests va. expectancy may be paid with the duty in respect of the rest of the estate or wheil the interest falls into possession, or the duty may be conimuted at any time, s. 7 (6), s. 12. If the duty is not paid with the duty on the rest of the ^3state, the interest is to be valued as at the date of the death, in oi'der to ascertain the rate of duty payable on the rest of the estate, and as on the day when it falls into possession, in order to determine the rate of duty payable on it, s. 7 (6). (c.) Interests arising hy cesser. — The value of a benefit arising by the ces&er of an interest is, if the interest extends to the wliole income of the property, to be tlie principal value of tliat property, but if the interest extends to less than the whole income it is to be the principal value of an addition to the property equal to the income to which the interest extended, s. 7 (7j. (ii.) Who determines the value. The value of any property liable to Estate duty is to be •determined by the Commissioners of Inland Eevenue, in .accordance with the principles laid down in the Act. They imay accept the value placed upon the property by the executors, provided such value is supported by the usual ■evidence, s. 8 (7). The Commissioners may appoint a person to inspect and value any property, the costs of such valuation being •defrayed by them, s. 7 (8) (9). If the person is aggrieved by the decision of the Commis- sioners, he may appeal to the High Court, or in case the value, as alleged by the Commissionc s, of any property does not exceed 1,000?., to the county court. The court may refer any question of disputed value to a valuer appointed by the county council of the county in which the appellant resides or tlie property is situate, s. 10. xxiv inteoduction, Amount of Dotv payable. In order to ascertain the amount of duty payable — First. — Add together or aggregate tie values of the. different classes of property liable to Estate duty. Secondly. — Add all income accrued and outstanding at- the date of death. Thirdly. — Deduct the allowances under s. 7. Fourthly. — Kefer to the table in s. 17 and ascertain the rate of duty. Fifthly.— Calculate the amount of dutj'' payable in respect of the value of the personal estate. Such sum, plus. 8 per cent, interest from the date of death, is the amount- payable by the executor. (i.) Aggregation. The values of all the different classes of property liable to Estate duty are aggregated so as to form one estate, s. 4. Suppose, for example, A. dies leaving 10,OOOL personal property and a fee simple estate of the value of 40,OOOJ., the two values are to be added together in order to ascertain the rate of duty. (a.) Settled property. — Where the deceased had an inte- rest in settled property, such property is, as a rule, to be aggregated with the deceased's other property. But in some cases of settlements there will be no aggregation. The following typical cases may be given by way o£ illustration : — 1. A., by a disposition made during his Jifetime, settles' property on B. for life, with remainder to C. On the death of A. no Estate duty is payable, as the settled property does not pass on his death. But if the settle- ment was made within 12 months of his death there may be a liability to duty under s. 2, sub-s. 1 (c\ 2. A. by a disposition made during his lifetime, settles; property on himself for life, with remainder to his son B. On the death of A. the settled property will be aggregated with the other property that belongs to A., to determine ALLOWANCES, XXV the ordinary rate of duty and the settled property will pay this rate, plus 1 per cent. 3. A., by a settlement made during his lifetime, settles property on B., with remainder to B.'s children, with, remainder to C. No Estate duty is payable on A.'s death, but on B.'s. death duty is payable. If B. leaves children, the settled property i^ aggregated with B.'s other property, but if B. leaves no children, so that the settled property goes to C, the settled property is not aggregated, but forms an estate by itself, s. 4. 4. When the net value of the property real and personal in respect of which Estate duty is payable does not exceed 1,000^., such property is not to be aggregated, but is to form an estate by itself. The same principle is applied where property in which the deceased never had an interesti passes to some person other than the wife, husband, lineal ancestor, or descendant of the deceased, ss. 4 and 16. (ii.) Alloivances. The deductions allowed are (a) reasonable funeral expenses ; (b) debts and incumbrances ; and (c) expenses, of foreign administration, s. 7. (a.) What are reasonable funeral expenses depends oni the tes'ator's condition in life, and on the prices that have to be paid at the time. The cost of mourning is not a funeral expense. (6.) As regards debts and incumbrances, they may be deducted if they have been incurred by the deceased hond fide for full consideration for his own use, and take effect out of his own interest. There must not be a right to re-imbursement from someone else. Debts due to persons out of the United Kingdom are not to be deducted in the first instance, unless contracted to be paid in the United Kingdom or charged on property situate within the United Kingdom. But if duty is payable on personal estate situate out of the United Kingdom, debts due to persons resident out of- XXVI INTRODUCTION. the United Kingdom may be deducted from the value of such personal property, s. 7 (4). (c.) The additional expenfse of administering property situate out of the United Kingdom may be allowed by the Commissioners up to 5 per cent, of the value of the property, s. 7 (3). (iii.) The Rate of Daty. Having arrived at the principal value of the estate, we are able to ascertain the rate of duty. The rate varies with the value of the aggregate property passing on death, fractions of lOL counting as lOZ. Estate Duty shall be Where the Principal Value of the Estate payable at the Eate per cent, of £ £ Exceeds 100 and does not exceed 500 One pound. 500 1,000 Two pounds. 1,000 10,000 Three pounds. 10,000 , , 25,000 Four pounds. 25,000 , , 50,000 Four pounds ten shillings. 50,000 , 75,000 Five pounds. 75,000 100,000 Five pounds ten shillings. 100,000 150,000 Six pounds. 150,000 , 250,000 Six pounds ten shillings. 250,000 500,000 Seven pounds. 500,000 , , 1,000,000 Seven pounds ten shillings. 1,000,000 Eight pounds. Where the property is settled, an additional 1 per cent. is payable in the case of all settlements that take effect after the commencement of the Act. (iv.) Interest. In the case of Probate duty, the duty was payable on the value at the date of the grant of probate, but in the case of Estate duty the value is to be the value as on the ■day of the deceased's death, interest on the duty at 3 per ■cent, being payable in respect of the interval that elapses between the date of the death and the d silvery of the Inland Revenue affidavit (s. 6 (6)). After six months TIME OF PAYMENT. XXVll from the death the duty is in arrear, and interest at 4 per cent, is payable from the expiration o£ six months. (v.) Small Estates. If the gross value, i.e., the value without deducting debts or funeral expenses, of the real and personal estate of the deceased in respect of which Estate duty is payable, exclusive of property settled by the will of the deceased, exceeds 100?. and does not exceed 300?., representation may be obtained on payment of 15s. for court fees and 30s fixed duty. If the gross value exceeds 300?. and does not exceed 500?., the fixed duty is 50s. The payment of such fixed duty exempts the estate from the payment of legacy or succession duty. The ad valorem duty may be paid instead of the fixed duty. If the net value of the property, real and personal, in respect of which Estate duty is payable, exclusive of property settled otherwise than by the will of the deceased, does not exceed 1,000?., the property is to form an estate by itself, and is nob to be aggregated with other property, and the payment of the Estate duty will exempt the estate from the payment of the Settlement Estate duty and the legacy and succession duty (s. 16 (3)). Where the fixed duty of 30s. or 50s. is paid within 12 months of the death of the deceased, interest on such duty is not payable. Time of Payment. Estate duty in respect of personal property is due from an executor or administrator On lodging the Inland Revenue affidavit and the account when applying for a grant of probate or of letters of administration, s. 6 (2). In so far as Estate duty is not due from an executor or adminis- trator, the person accountable ought to pay it, on delivery of the account, within six months fiom the death, s. 6 (4), unless he exercises the option given by s. 6 (8) in the case of real property. After the expiration of six months the Estate. duty is in arrear, except in the case of the fixed duties of 30s. and 50s. payable on small estates under s. 16, XXVlll INTRODUCTION. Twelve months is allowed for the payment of such fixed duties. Duty on real property maj' be paid by eight equal yearly instalments or IG half-yearly instalments, with interest at 3 per cent, from the date the firsb instalment is due, less income tax. The first instahnent is due on the expiration of 12 months from the death. The duty may be paid up in full at any time. Duty on interests in expectancy may be paid either with the duty on. the rest of the estate, or when the interest falls into possession (s. 7 (6)), or may be commuted at any time, s. 21 (3). Unpaid Duty a Charge. Unpaid E-tate duty on property other than personal estate is a cliarge on such property, except as against a bond fide purchaser for value without notice, provided it is not situate in a British possession, s?. 9, 20 (2). A rateable part of the duty is a charge on the specific part of the pr(?perty in respect of which it is payable, s. 9 (1). The certificate of the Commissioners is conclusive evidence of the existence of such charge, s. 9 (3). On the payment of all Estate duty tlie Commissioners can grant a certificate dischaiging tlie property from any further claim for sucli duty, s. 11 (1). Bond fide purchasers for value, without notice, are not liable to or accountable for Estate duty, s. 8 (18). The Act incorporates sections 12 to 14 of the Customs and Inland Eevenue Act, 1889, which gave purchasers for value and mortgagees protection against claims for succes- sion duty after the expiration of six years from the time tlie Commissioners had notice that a successor had become entitled in possession or from the date of the payment of the first instalment of succession duty, s. 8 (2). Incidence of the Duty. Estate duty in respect of personalty will, like the Probate duty, fall on the general personal estate. As regards Estate duty on real property a testator may direct DISCHARGE FROM DUTY. XXIX tliat a specific fund be appropriated to tlie payment of the duty, or he may direct the executor to discharge it out of the residuary estate. Where he does not do so, each person who benefits by the property passing on the death will have to bear his share of the duty, proportionate to the value of the benefit taten by him. If the executor exercises the discretion given him, cf paying the duty on real property under his control, the persons who are entitled to the property will have to bear the duty. Where the real property is not under the ■control of the executor, or where it is under his control but he does not pay the duty, the persons who take the property must also bear the duty. If the trustees or ^ardians or persons who have the management of the property arc compelled to pay the duty under s. 8 (4), they have full powers under s. 9 (5) to raise the duty. In the case of settlements the duty inay. be paid out of money arising from a sale of the property, or out of money held upon trust to lay out upon the trusts of the settlement, or out of capital money arising under the Settled Land Act, s. 9 (7). And if a tenant for life pays the duty he has a charge upon the property in respect thereof, s. 9 (6). Discharge from the Duty. A certificate discharging the property mentioned in such ■certificate from any further claim for Estate duty is to be granted by the Commissioners where they are satisfied that the duty either Las been paid or will be paid, s. 11 (1). After the expiration of two years from the death the Commissioners may determine the rate of duty, and on payment of the duty give a certificate of discharge. This provision is intended to meet the case in which it is difficult to close the administration of an estate. The powers of the Commi:ssiouers to give a certificate mder -these circumstances is discretionary, s. 11 (2). A certificate is not to act as a discharge in case of fraud or failure to disclose material facts, but it will exonerate a hondfide purchaser for value without notice, s. 11 (3). xx s introduction. Eepayment. If too much duty be paid the excess is repayable, aud if the overpayment was due to over valuation, the excess is to be repaid with interest at 3 per cent, per annum K. 8 (12). Property situated out of the United Kingdom. i. In Foreign States. Property locally situated out of the United Kingdom was not liable to Probate duty, but the Finance Act applies to all foreign property that under the law in force before the passing of the Act was liable to legacy or succession duty, or would be so liable but for the relationship of the person to whom the property passes, s. 2 (2). Real property situated abroad has never been liable to succession duty, inasmuch as the Succession Duty Acts only apply to real property situated in the United Kingdom. But where a deceased person was domiciled in the United Kingdom at the time of his death his personal or moveable property abroad was liable to legacy or succession duty. An executor must therefore bring into the account all moveable property situated abroad, s. 2 (2). If he does not know the amount or value of such property at the time of applying for probate, he must undertake to bring in a further account, and to pay all further duty to which the property is liable, s. 6 (3). It might happen that the assets actually in the executor's hand are not sufficient to pay the duty on the foreign personal estate. In such case he is protected by s. 8, sub-s. 2, which provides that the executor is not to be liable for any duty in excess of the assets which he has or might have received as executor. If the executor incurs any additional expense in administering or in realising property situate out of the United Kingdom, the Commissionets may make an allowance fro'n the value of such property not exceeding .5 per cent. FOEEIGN PROPERTY. XXXl It is quite possible that the executor in collecting property situated abroad may have to pay duty in the foreign country in which the property is situate, as well as duty in this country. As a rule, an executor is entitled to collect the personal property of a deceased person without taking out probate. His title is derived from the will ; the probate is only evidence of his title, Smith v. Milles, 1 T.R. 475. In England, as well as in the United States, an executor to whom the personal property of the deceased is voluntarily transferred need not take out probate in order to give a good receipt for the property. It is only when he has to enforce his title in a court of law that probate is necessary. By the 55 Geo. 3. c. 184. s. 37 an executor who omits to take out probate within six months of the death, is liable to a penalt_v of 100?. and 10 per cent, on the duty. And by the 44 Vict. e. 12. s. 40, any person who ought to obtain probate who neglects to do so within the period prescribed by law for the purpose is liable ta double the amount of duty chargeable. The Finance Act provides (s. 8 (6)) that any person wh» wilfully refuses to deliver an account or pay the duty is liable to a penalty of lOOi., or double the duty for which he is liable, at the option of the Commissioners. If the executor remains outside the jurisdiction it is difficult to see how the payment of these penalties could be enforced. A further principle must be borne in mind in regard to foreign wills. A will made by a testator in accordance with the law of his domicile at the date of his death is valid according to English law, Bremer v. Freeman,. 10 Moo. P. C. 306. An executor appointed by such will is therefore a duly constituted executor. Hence, if A., a foreigner domiciled abroad, appoints B. his executor by a will valid according to the law of his domicile, and A. dies possessed of personal estate irt England, the executor may collect such personal estate without taking out probate, though by so doing he incurs the above penalties under the 55 Geo. 3. c. 184. s. 37 and the XXXU INTRODUCTION. 44 Vict. c. 12. s. 40. But if he has to sue in an English court, he must prove the will by an English grant oi probate. Lee v. Moore, Palm. 165, Tourton v. Floiver, 3 P. Wms. 370. But if A. appoints B. his executor as xegards property situate in England, and C. his executor as regards property situate abroad, and directs B. to remit the English property to C. If B. takes out probate in England his liability to Estate duty on the foreign property will be limited to the amount of the assets that come into iiif? hands. The legal position of an administrator is different from that of an executor, inasmuch as his title is derived from the court that grants the letters of administration. Until the administrator is clothed with a title by the court, he lias no authority to collect the property of the deceased. Hence, it does not follow that if a person in the possession ■of property is justified in handing it over to an executor «]iJer a foreign grant, that he would be justified in handing- it to a foreign administrator. British Possessions. The Act draws a distinction between property situated in a British possession and property situate in a foreign State. By s. 20, in the case of moveable property in a British possession, the duty payable there may be deducted :from the duty payable here if an Order in Council applies the section to such British possession. The section is only to be applied if the law of such British possession levies no duty in respect of property situate in the United JKingdom, cr if the law of such possession as respects any duty so leviable is similar to the section. If A. dies domiciled in the United Kingdom, possessing personal property in New South Wales, his executor is liable for duty on such property, but if a separate executor is appointed as regards all property situate out of the United Kingdom, such property may largely escape Estate dutv". SUCCESSION DUTV. XXXlll Settled Peoperty. For the future, the corpus of settled property is to be liable to Estate duty, but only once during the continuance of the settlement. In consideration of this single payment, an extra duty, called Settlement Estate duty, is payable in respect of the settled property, except where the only life interest is that of a husband or wife. The settled property is to be aggregated with the unsettled property, to determine the ordinary rate of dutj^, and this rate plus 1 per cent, is payable on the settled property. Where the property is settled by the deceased, the duty is payable on his death. Where the property was settled by someone else, the duty is payable on the death of the first tenant for life, s. 5. When a tenant for life pays the duty on settled property, he has a charge on the property for the duty paid, s. 9 (6). If the trustees of the settlement pay the duty, they have power to raise the amount by sale or mortgage, or by a terminable charge on the property, s. 8 (5). The duty may be paid out of money arising from the sale of the pro- perty, or out of capital money arising under the Settled Land Act, 1882, s. 8 (7). As regards entailed estates in Scotland, see s. 23 (16). Succession Duty. As already pointed out, the payment of Estate duty does not exempt a beneficiary from liability to legacy or succession duty. But for the future, succession duty is to be levied on similar principles to those followed in the case of legacy duty. 1. The rates of succession duty are to be the same as the rates of legacy duty. 2. Succession duty is to be no longer payable on tne value of the successor's life interest in real property, but if the successor is " competent to dispose " of the property, on the " principal value," i.e., the " principal value " as ascertained for the purpose of Estate duty, after deducting c XXXIV INTRODUCTION. (a) the Estate duty payable in respect thereof, (6) the expenses, if any, properly incurred in raising and paying the same, s. 18. 3. Succession duty is payable by the same instalments as in the case of Estate duty, the first instalment being due 12 months after the date on which the successor becomes entitled in possession to his succession, or to the receipt of the income or profit thereof. 4. After the expiration of such 12 months, the provision as to discount in case the instalments are paid \vp do not ai'ply Suggestions. 1. Unpaid Estate duty being a charge on real property situate in the United Kingdom, inquiry will usua'ly be made by a purchaser as to its payment, though a bond Jide purchaser without notice is protected by the Act, s. 9. The best evidence that all Estate daty has been paid, will be the certificate under s. ] 1 (1). 2. Where a sum is being charged on property, whether as capital or as an annuity, it will be necessary to consider whether the person entitled to such charge is to bear any Estate duty that may be payable on the same, see s. 14 (1). 3. Where a will disposing of propert}' in the United Kingdom and abroad is made by a person likely to die domiciled in the United Kingdom, he ought to consider whether he will appoint one set of executors or two sets, one for property locally situated in the United Kingdom, and the other for property locally situate outside the United Kingdom. As already pointed out, the latter course may greatly affect the amount of Estate duty payable. The existence in some of our colonies of com- panies authorised to discharge the functions of an executor, avoids the difiiculty that might arise owing to the ■unwillingness of anyone in a colony to act as executor. 4. In the case of persons who die domiciled abroad pos- .sessing personal property in the United Kingdom, it is not FORMS. XXXV absolutely necessary for the foreign executor to take out probate in order to collect such property, so long as he has not to enforce his title in court. The question will arise whether the executor of such a person is entitled to have shares in English companies transferred to him without taking out an English probate. As far as companies incorporated after the 1st August 1894 are concerned, the point ought to be borne in mind in drafting articles of association. Forms of Affidavits and Accounts. The forms that have been prescribed under the Act are — Affidavits. A — 1. Inland Ilevenue Affidavit for Probate or Adminis- tration, except where B — 1 is applicable. No. 17. Summary of Duty and Interest : To accompany Form A — 1. B — 1. Inland Revenue Affidavit for Probate or Adminis- tration where the GROSS principal value of the property, real and personal, in respect of which Estate duty is leviable on the death of the deceased, exclusive of property settled otherwise than by the will of the deceased, does not exceed 5001., and, if any Estate duty is payable thereon, the fixed duty of oOs. or 50s. is to be paid. A — 3. Form to accompany the Form A — 1, where the deceased has been dead more than 12 months and the execusor wishes to pay Estate duty on real property. D — 1. (In duplicate.) Corrective Affidavit. Accounts. C — 1. (In duplicate.) Account of property which passed at the death, but the Estate duty whereon was not paid on the Inland Revenue Affidavit. C- — 2. (In duplicate.) Account for Settlement Estate duty. XXXVl INTRODUCTION. C — 3. Account for second and subsequent instalments of Estate duty on real property. D — 2. (In duplicate.) Corrective Account. All the forms can he obtained of any Collector of Inland Revenue, or by personal application at the Legacy and Succession Duty Office, Somerset House. The forms A — 1, A — 3, and B — 1, can be obtained of any Probate Registrar. All the forms except A — 3 can be obtained at any Money Order Post Office outside the Metropolitan Postal District. Delivery of Affidavits and Accounts. The Inland Revenue Affidavit is to be delivered to the Probate Registrar on application for Representation. Accounts and corrective affidavits are to be delivered personally, or by an agent, at the Legacy and Succession Duty Office, Somerset House, London, W.G., or, luhere duty is to be paid, they may be sent there through the Post from an address outside the Metropolitan Postal District. They will be examined, and instructions as to the amount of duty and how to pay it will be issued. Where duty is to be returned the corrective Affidavit or Account must in all cases be presented personally, or by an agent, at the Legacy and Succession Duty Office. Separate instructions are issued for the payment of Legacy and Succession duties. THE FINANCE ACT, 1894 (57 & 68 YIOT. c. 30), so EAR AS IT RELATES TO THE ESTATE DUTY AND THE SUCCESSION DUTY. An Act to grant certain Duties of Customs and a.d. 1894, Inland Revenue, to alter other Duties, and to amend the Laio relating to Customs and Inland Revenue, and to maJce other promsion for the financial arrangements of the Year. [31&t July 1894.] Most Gracious Sovereign, WE, Your Majesty's most dutiful and loyal sub- jects, the Commons of tlie United Kingdom of Great Britain and Ireland in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto Tour Majesty the several duties herein-after mentioned ; and do therefore most humbly beseech Your Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : PART I. Estate Duty. Grant of Estate Duty. Sect. 1. 1. In the case of every person dying after the Grant of Commencement of this Part of this Act there shall, "^' save as herein-after expressly provided, be levied and paid, upon the principal value ascertained as kerein-after provided of all property, real or personal, settled or not settled, which passes on the death of such person, a duty, called " Estate duty," at the graduated rates herein-after mentioned, and the existing duties mentioned in the First Schedule to this Act shall not be levied in respect of property chargeable with such Estate duty. This section lays down the. general principle that in the case of .•all persons dying after the 1st day of August 1894 a graduated Estate duty is payable instead of Probate or Administration ■duty. In the case of persons dying on or before tlie 1st August 1894, Probate or Administration duty, and not Estate duty, is payable, s. 21. sub-s. (2). In the case of settlements of personal property made by a person who died before the commencement of the Act in respect of which Probate or Administration duty has been paid, or is payable, no Estate duty is payable unless the deceased had been competent subsequent to the date of the settlement to dispose of the property, e. 21., sub-s. (1). Commencement of the Act. — The Act applies to all persons dying after the 1st August 1894. But see s. 21 as to settlements made on or before the 1st August 1894. Be levied and paid. — The Estate duty is payable by means' of a stamp on delivery of the account. See a. 6, sub-s. (1) and s. 8, sub-s. (16). Save as herein-after provided the principal sections of the Act containing exemptions from Estate duty are as follows: — S. 8 (1) (estates of seamen, marines, or soldiers, and estates iiinder 100/.) ; s. 16 (estates under 1,000/.) ; s. 3 (transactions for money consideration); s. 15 (I) (small annuities) ; s. 15 (3) (pensions) ; s. 15 (4) (advowsons) ; and s. 21 (1) (settlements of personalty made by persons dying on or before the 1st August 1894). Eeference may also be made to s. 20 regarding property •GRANT OF ESTATE DUTY. o in British possessions, and to s. 15 (2) regarding remission of Sect. 1. duty in the case of works of art bequeathed to the public. Upon the principal value ascertained as herein-after provided. — " Principal value " is defined by s. 7, sub-s. (5) as " the price ■" which in the opinion of the Commissioners such property ■" would fetch if sold in the open market at the time of the death ■" of the deceased," but in the case of " agricultural property" a maximum principal value is prescribed. The date at which the principal value is to be ascertained is the day of the death of the deceased, and not the date of the grant of probate or administration ; but interest at 3 per cent, is payable «pon the Estate duty from the date of death up to the delivery of the account or the expiration of six months from the death. See s. 6. sub-s. (6). The method of ascertaining the principal value is prescribed by s. 7. An appeal lies from the Commissioners to the High Court, who may refer any question of disputed value to valuers appointed by the county or borough council, s. 10. Of all property, real or personal. — The word " property " by " Property." itself is ambiguous. It is sometimes used to denote an estate or interest ; at other times it means that in which an estate or interest exists. For example, if A. has a life estate in Blackacre, the life estate of A. is often called property, and Blackacre is often called property. The Act does not contain any hard or fast definition of "property." S. 22, sub-s. (1) (/) states that "the expression *' ' property ' includes real property and personal property, and *' the proceeds of sale thereof respectively, and any money or " investment for the time being representing the proceeds of " sale." It is obvious that the use of the word " includes" con- templates the possibility of the existence of forms of property other than those expressly mentioned. S. 2 specifically mentions certain forms of property that are to be regarded as falling under the term, but the section does not aim at being exhaustive. By the Stamp Act, 1870 (33 & 34 Vict. c. 97.), ad valorem duty is payable on a conveyance on a "sale of property." In Limmer Asphalte Paving Company v. Commissioners of Inland Revenue, L. E., 7 Ex. 211, the Court of Exchequer adopted the definition of property given by Pollock, C.B., in Potter v. Commissioners of Inland Revenue (10 Ex. at p. 136 ; 23 L. J. Ex. at p. 347), viz., " property is that which belongs to a person exclusive of others, " and which can be the subject of bargain and sale to another." The meaning of the term "property" in connection with the Stamp Acts was considered in Conservators of River Thames v. Commissioners of Inland Revenue, 18 Q. B. D. 279, in which a permission granted by the Thames Conservators by an instrument not under seal to a pier company to construct and erect a jetty in consideration of an annual payment so long as the Conservators allowed the jetty to remain was held not to be property. a2 4 GRANT OF ESTATE DUTY. Sect. 1. As to the distinction between " property " and nspes successionis^ see He Parsons, Stockley v. Parsons, 45 Ch. D. 51. See the definition of "property" in the Conveyancing Act, 1881, s. 2 (i.), and in the Conveyancing Act, 1882, s. 1,. sub-s. (4) (i.). If the deceased is domiciled in the United Kingdom at the time of his death, Estate duty is payable in respect of all his movable property that passes on the deatli situate abroad. See cote to s. 2, sub-s. (2). Settled or Unsettled. — Settled property is defined by s. 22, sub-s. (1) (li) as "property comprised in a settlement" ; and a settlement is defined as " any instrument, whether relating to real " property or personal property, which is a settlement -within " the meaning of section two of the Settled Land Act, 1882, or, " if it related to real property, would be a settlement within the " meaning of that section, and includes a settlement effected by a. " parol trust." By section 2 (1) of the Settled Land Act, 1882, a settlement is defined as follows : — Any deed, will, agreement for a settlement, or other agreement, covenant to surrender, copy of court roll, Act of Parliament, or other instrument or any number of instruments, whether made or passed before or after, or partly before and parti}' after, the commencement of this Act, under or by virtue of which instrument or instra- ment? any land or any estate or interest in land stands for the time being limited to or in trust for any persons by way of succession, creates or is foj' purposes of this Act a. settlement, and is in this Act referred to as a settlement or as the settlement, as the case requires. Parol trusts. The above definition of a settlement in the Settled Land Act does not cover the case of a parol trust, but parol trusts are included in the definition contained in the Finance Act. The Act applies to estates in dower and by the curtesy in like manner as it applies to property settled by the will of the deceased, s. 22 (3), s. 23 (19). Scotland. — By s. 23, sub-s. (1.5) the expression "settled property " is not to include property held under an entail. As to entailed estates, see s. 23, sub-s. (15). As to estates of terce or courtepy, see s. 23, sub-s. (17). Which passes on the death of such jerson. — See note to s. 2 (1). A duty called " Estate duty " at the graduated rates herein- after mentioned. — Estate duty means " Estate duly " under this Act; s. 22, sub-s. (1) (e). The duty imposed by ss. 5 and 6 of the Customs and Inland Eevenue Act, 1889, was also called an estate duty. PROPERTV PASSING OX DEATif. 5 And the existing duties, &c. — The duties referred to in the Sect. 1. First Schedule are — 1. Tlie Probate duty, imposed on affidavits for probates and letters of administration granted in England and Ireland, and on inventories exhibited and recorded in Scotland. Customs and Inland Revenue Act, 1881 (44 Vict. c. 12.), ss. 27 and 38; Customs and Inland Revenue Act, 1889 (52 Vict. c. 7.), s. 11. 2. The Account Stamp duty, imposed on certain voluntary gifts and settlements not liable to probate duty by the Customs and Inland Revenue Act, 1881, s. 38, and the Customs and Inland Revenue Act, ]8£9, s. 11. This duty is analogous to the Probate duty. 3. The additional Succession duty imposed by the 51 Vict. c. 8. of \ per cent, for lineals, and 1^ per cent, for collaterals and strangers. 4. The Estate duty imposed by the 52 Vict. c. 7. on personal estates and successions of 10,000/. value and upwards. 2. — (1.) Property passing on ihe deatli of the Sect. 2. deceased sliall be deemed to include the proj)erty what property X Ti • J.1 J. • J. is deemed to Tollowing, that is to say : — pass. Property. — »S'ee^ note-to s. 1 as to meaning of " property." Property passing on the death. — By s. 22, sub-s. 1 (I), the expression property passing on the death includes " property " passing either immediately on the death or after any interval " either certainly or contingently and either originally or by way " of substitutive limitation, and the expression ' on the death ' " includes ' at a period ascertainable only by reference to the " death.'" By s. 23, sub-s. (12) property in Scotland comprised in any special assignation or disposition taking effect on death is to be deemed to pass on the death. The following classes of property are by the Act excluded from " property passing on the death." i. Property situate out of the United Kingdom which under the law in force before the commencement of the Act is not liable to Legacy or Succession duty. S. 2, sub-s. (2). ii. Trust property under certain conditions. S. 2, sub-s. (3). iii. An interest under a settlement that fails by the death of the person entitled before it becomes an interest in succession S. 5. sub s. (4). (a.) Property of which the deceased was at the time of his death competent to dispose : — Competent to dispose. — By. s. 22, subs. (2). " (a.) A person shall be deemed competent to dispose of property if he has such an estate or interest therein or PXIOPERTY PASSING ON DEATH, Sect. 2. " Competent to dispose." 45 & 46 Vict. c. 38. Interest ceasing on death. such general power as would, if he were sni juris, enable him to dispose of the property, including a tenant in tail whether in possession or not ; and the expression " general power" includes every power or authority enabling the donee or other holder thereof to appoint or dispose of property as he thinks fit, whether exerciseable by instru- ment inter vivos or by will, or both : but exclusive of any power exerciseable in a fiduciary capacity under a dis- position not made by himself or exerciseable as tenant for life under the Settled Land Act, 1882, or as mortgagee."' " (b.) A disposition taking effect out of the interest of the deceased person shall be deemed to have been made by him whetlier the concurrence of any other person was or or was not required." " (c.) Money which a person has a general power to charge or> property shall be deemed to be property of which he has power to dispose." The following persons are competent to dispose of property within the meaning of this Act : — The owner of a fee simple. A tenant in tail. A person with a general power of appointment whether exerciseable by deed or will, even though he has not exercised the- power. A person who has a power exerciseable in a fiduciary character if such power was conferred on him by himself, A person who has a general power to charge property with the; payment of money. But the Act excludes from its provisions — ■ A person with a special power of appointment. A person exercising in a fiduciary capacity a power conferred on him by another person. A tenant for life in respect of the powers of the Settled Land Act. A mortgagee in respect of his powers of sale. (&.) Property in wHcli the deceased or any other person had an interest ceasing on the death of the deceased, to the extent to which a benefit, accrues or arises by the cesser of such interest ; but exclusive of property the interest in which of the deceased or other person was only an interest as I older of an office or recipient of the benefits of a charity, or as a corporation sole. The deceased may have enjoyed an estate for his own life, or a life annuity charged upon land ; in both these cases the life interest is to le regarded as passing on his death. CESSER OF INTEREST. 7 Any other person. — A. may have an interest in property Sect. 2. belonging to B. that ceases on the death of C. Here, though C. has no interest in the property, the life interest is to be regarded as passing on his death, but by s. 4 it is not to be aggregated in certain cases. But the general effect of this sub-section is modi- fied by s. 3 as regards the falling into possession of a reversion or the determination of an annuity, or a bond fide purchase. An interest ceasing on the death. — On the death of a tenant for life or of a person who enjoyed an annuity for life charged on land, the value of such life interest or annuity will be aggre- gated with the rest of the deceased's property in order to determine the rate of duty payable under s. 17. Estate duty in respect of an interest ceasing on death is not payable out of the estate of the deceased, but is payable by the person who benefits by the cesser of the interest. Settlements. — Where the deceased has enjoyed an annuity that Annuities, passes at his death to another. Estate duty will be payable on the annuity in respect of the period that the annuity has still to run. For example, if an annuity is created for 100 years, and granted to A., B., and C. successively for life ; A. enjoys the annuity for twenty years and dies. Estate duty will be payable in respect of an annuity that has 80 years (100 — 20) to run. Where an annuity of lOOZ. a year charged on land is granted to A. for life, on the death of A. Estate duty will be payable in respect of the benefit the owner of the property on which the annuity is charged derives by the falling in of the annuity. Where, however, an annuity for lives, has been purchased for full value, Estate duty is not payable on the cesser of the annuity.. See sub-s. 2 (d). As to the valuation of the benefit accruing by the cesser of an interest ceasing on the death of the deceased, see s. 7. Holder of ofilce or recipient of the benefits of a charity. — In some cases the holder of an office, e.g., the master of a school, is entitled to the income of an endowment so long as he holds the office. The holder may have the freehold of the office or he may- be only life tenant. Corporation sole. — Bishops, members of a chapter, or parsons and vicars are examples of corporations sole, and frequently lands are vested in them in virtue of their office. (c.) Property whicli would be required on the death, of the deceased to be included in an account under section thirty-eight of the Customs and Inland Eevenue Act, 1881, as ■^^ ^^ ^^ vict. e 12, amended by section eleven of the Customs and Inland Eevenue Act, 1889, if those sections 52 & 53 vict. c 7, were herein enacted and extended to real 7 PKOPERTY PASSING ON DEA'IH. Sect. 2. proDerfcy as well as personal property, and tlie words " voluntary " and " voluntarily " and a reference to a "volunteer" were omitted therefrom ; and Gifts inter The sections of the Acts of 1881 and 1889 referred to were """'*• passed for the purpose of preventing any evasion of probate duty by imposing duty on certain classes of voluntary gifts and settlements made by the deceased in his lifetime. The sections are printed below, but their general effect is to make the following classes of property liable to be included in an account for the purposes of Estate duty : — 1. Donationes mortis causa. 2. Gifts made by a disposition inter vivos within 12 months before death. 3. Gifts made at any time where the donor retains any interest. 4. Property which the deceased caused to be vested in himself and some other person so that on his death it passes to the survivor. 5. Property settled by the deceased otherwise than by will, in which he retains a life interest or has a power of revocation. The provisions of the sections are for the future to apply to real as well as personal property, and to settlements whether voluntary or not. 44 & 45 Vict. S. 38 of the Customs and Inland Eevenue Act, 1881, as c. 12. B. 38. amended by s. 11 of the Customs and Inland Eevenue Act, 1889, and by the above sub-section reads as follows, the amendments being printed in italics. The personal property or movable property to be in- cluded in an account shall be property of the following descriptioDs, viz. : — ((X.)2Any propeity taken as a donatio mortis causa made by any person dying after the expiration of the 1st day of August 1894, or taken under a . . , disposition made by any per.^on so dying, purport- ing to operate as an immediate gift inter vivos, whether by way of transfer, delivery, declaration of trust, or otherwise, which shall not have been bona fide made 12 months before the death of the deceased, including froperty taken under any gift, whenever made, of which property hond fide ■possession and enjoyment shall not have been assumed hy the donee immediately upon the gift GIFTS (inter vivos). 9 and thencefonuard retained to the entire ex- S ect. 2. elusion of the donor or of any benefit to him by contract or otherivise. (p.) Any property which a person dying on or after such day, having been absolutely entitled thereto, has . . . caused, or may . . . cause to be transferred to, or vested in himself, and any other person (including also any purchase or investment effected by the person who was absolutely entitled to the property either by himself cdone, or in concert, or by arrangement with any other person), jointly, whether by disposition or otherwise, so that the beneficial interest therein, or in some part thereof, passes or accrues by survivorship on his death to such other person, (c.) Any property passing under any past or future . . . settlement, including any trust, whether expressed in tvriting or otherwise . . . and if contained ia a deed or other instrument effecting the settlement, whether such deed or other instrument was made for valuable considercUion or not as between the settlor and any other person, made by any person dying on or after such day, by deed or any other instrument, not taking effect as a will, whereby an interest in such property or the proceeds of sale thereof for life, or any other period, determinable by reference to death, is reserved either expressly or by implication to the settlor, or whereby the settlor may l.ave reserved to h'mself the right by the exercise of any ] ower to restore to himself, or to reclaim the absolute interest in such property or the proceeds of sale thereof. See Attorney-General v. Chapman (1891), 2 Q, B. 526, and Attorney- General v. Gosling (1892), 1 Q. B. 545, .13 10 the reservation of a life interest by a settlor. The cases that have been decided on these sections relate Voluntary chiefly to the question whether the settlement in question was a settlements, voluntary one or not, a question that will not have to be answered under Ihe Finance Act, since it applies the above sections to all settlements (see Grossman v. The Queen, 18 Q. B. D. 256, Attorney- General v. Heywood, 18, Q. B. D. 326, Attorney -General 10 PKOPERTY PASSING ON DEATH. Sect. 2, V. Theobald, 24 Q. B. D. 557, In re Cameron and Welh, 37 Ch. D. 32, De Mestre v. West (1891), App. Cas. 264, Attorney- General \. Chapman (1891), 2 Q. B. 526. Attorney- General y. Gosling (1892), 1 Q. B. 545.) {d.) Any annuity or otHer interest purchased or provided by tlie deceased, either by himself alone or in concert or by arrangement with any other person, to the extent of the beneficial interest accruing or arising by survivorship or otherwise on the death of the deceased. Annuities. Foreign property. This sub-section is controlled by s. 3, sub-s. (1), as regards annuities for lives purchased for full consideration, and by s. 15, sub-s. (1), -which exempts from estate duty one annuity not exceeding 25^. purchased as above. (2.) Property passing on the death of the deceased when situate out of the United Kingdom shall be included only, if under the law in force before the passing of this Act, legacy or succession duty is payable in respect thereof, or would be so payable but for the relationship of the person to whom it passes. Immovable propeity situated abroad has never been liable to succession duty. By the Succession Duty Act, 1853 (16 & 17 Vict. e. 51), the term "real property" is to include all freehold, copyhold, customary leasehold, and other hereditaments and heritable property, whether corporeal or incorporeal "in Great Britain and Ireland." Foreign immovable property will not therefore fall under " property passing on death." Personal or movable property locally situated outside the United Kingdom was not liable to probate duty, inasmuch as probate duty was only payable in respect of bona notabilia in the place where the goods were situated. Fernandes' Executors Case^ L. E. 5, Ch. App. 314. Thomson v. Advocate-General, 12 CI. &¥.\.,A.-G. V. Boimens, 4 M. & W. 171, ^.-G. v. Dimond, 1 Cr. & J. 356, A.-a. V. Hope, 1 C. M. & R. 530, 2 CI. & F. 84. But in the case of legacy and succession duty the actual situation of the property is disregarded, and duty under the Legacy Duty Acts (Thomson v. Advocate-General, 12 CI. & F. 1), and under the Succession Duty Acts {Wallace v. Attorney -General, L. K. 1 Ch. 1), is payable to the Stale, in case the deceased atos domi- ciled in the United Kingdom at the time of his death. Hence the domicile of the testator or intestate at the time of his death FOREIGN DUTY. ]1 determines the liability of movable property to succession or Sect. 2. legacy duty. If, however, the deceased appointed two sets of executors, one in respect of his movable property locally situated in England, and another in respect of the movables situated abroad, and the foreign movables were not remitted to the English executors, it is difficult to see howr the State could recover the duty, inasmuch as it could not sue the foreign executors and the English executors would not be liable. Testator domiciled abroad. — As a rule, if a testator dies domi- Testator ciled abroad, succession duty is not payable in this country in domiciled respect of the movable property in the United Kingdom. But to a^™^d. this rule there were certain exceptions. Where a testator domiciled abroad was entitled to exercise an absolute power of appointment under an English settlement over settled personalty paid into court, it was held that as the appoint- ment was under an English instrument, the fuud appointed was liable to succession duty. In re Lovelace's Trusts, 4 De G. & J. 340. A similar question arose In re Wallops' Trusts, 1 De G-. & S. 656, where a testator who died domiciled abroad, by his will directed that an annuity was to be paid out of a portion of his personal estate, to be invested in England, to his sister for her life, and on her death such personal estate was to be divided amongst his three children ; the House of Lords held that Succession duty was payable on the division taking place. Attorney- General V. Campbell, L. E. 5 H. L. 524. "You cannot," said Lord Westbury, " apply an Enghsh Act of Parliament to foreign " property whilst it remains foreign property, but after the " purposes of administration have been answered and distribution " made, if a person taking a distributive part comes to this " country and invests it upon trusts, it assumes the character of a " British settlement and British property." Lord EDmilJy followed this case in Lyall v. Lyall, L. R. 15 Eq. 1, where the funds in England on which duty was elaix.ed had not been paid to the trustees of the English settlement at the time of the succession. Where French rentes and shares in a French bank were settled by an English selttlemerit made in England prior to tho marriage of an Englishwoman and a domiciled Itahau, and vested in English trustees, and on the death of husband and wife the children succeeded, it was held by Jessel, M.R., that succession duty was payable, re Cigalas Trusts, L. R. 7, Ch. D. 351. See remarks of Wills, J., in Colquhoun v. Brooks, 19 Q. B. D., at p. 407. Under the Finance Act estate duty will bo payable in all t lie above cases. Whether property is or is not situate out of the United Kingdom becomes a mixed question of law and fact when it is of an incorporeal nature. A rentcharge arising out of land would appear to be situate in the county in which the laud is situated {see fVJiitaker v. Forbes, L. R. 10, C. P. 583 ; 1 C. P. D. 51). Shares in public companies are regarded as bona noiabilia in the country where the head office is situated {Attorney-General n. Higgins, 2 H. & N. 339; Fernandes' Case, L. R. 5, Ch. App. 12 PROPERTY PASSING OX DEATH. Sect. 2. 314), and liable to probate duty in such country. It has also besn held that stocks, funds, or bonds of foreign countries or of Kritish possessions, transferable in the United Kingdom, are liable to probate duty {Attorney-General v. Bouwens, 4 M. & W. l7l ; Attorney-General v. Dimond 1 Cr. & J. 35G ; Attorney- General V. Hope, 1 C. M. & R. 530). (3.) Property passing on the death of the deceased shall not be deemed to include property held by the deceased as trustee for another person, under a dis- position not made by the deceased, or under a disposition made by the deceased more than twelve months before his death where possession and enjoyment of the property was bona fide assumed by the beneficiary immediately upon the creation of the trust and thenceforward retained to the entire exclusion of the deceased or of any benefit to him by contract or otherwise. Trusts. In order that property held on trust by the deceased may be excluded from property passing on death, the following conditions are required by this sub-section to be observed :— • 1. The property must have been held upon trust for another person and not for the deceased himself. 2. The trust must not have been created by the deceased, or if created by the deceased, (a) the disposition must have been made 12 months before his death, (b) on the creation of the trust, the beneficiary must have assumed the enjoyment of it, and retained such enjoyment to the entire exclusion of the decea.sed. Trustee. — As applied to Scotland, " trustee " includes tator, curator, and judicial factor. S. 23, sub-s. (13). . Sect. 3. 3, — (1.) Estate duty shall not be payable in Exception for respect of property passing on the death of the transactions , jt_ i^iaot i for money oeceased by reason only or a bona nde purchase from the person under whose disposition the pro- perty passes, nor in respect of the falling into possession of the reversion on any lease for lives, nor in respect of the determination of any annuity for lives, where such purchase was made, or such lease or annuity granted, for full consideration in money or money's worth paid to the vendor or consideration. MONEY TRANSACTIONS. 13 grantor for his own use or benefit, or in tlie case S ect. 3. of a lease for tlie use or benefit of any person for whom the grantor was a trustee. This sub-section deals with three cases in which jjroperty may be Transactions said to pass on death, but where it is tliougbt equitable to exempt f<"' money !,(. iiji <=i '. consideration, such property trom estate duty : — i. A bond ^de purchase from the person under whose disposi- tion the property passes. If A. purchases for full consideration, e.g., a lump sum, from B. an estate for the life of C, ou C.'s death the life estate will pass away from A. and will fall into B.'s reversion. Estate duty is not payable on such life estate. ii. The falling into possession of the reversion on any lease for lives. A. grants a lease to B. for the lives of C. and D. for full consideration. On the deaths of C. and D. the reversion on the lease falls into possession, but estate duty is not payable. iii. The determination of any annuity for lives. An insurance company grants an annuity for the joint lives of A. and B. for full consideration. The annuity ceases on the death of A., but estate duty is not payable. It will be observed that the sub-section requires the following conditions to be observed : — 1. The purchase must he for full con- sideration. See sub-s. (2) as to partial considerations. 2. The consideration must have been paid to the vendor or grantor for his own use, or if the vendor or grantor is a trustee, for the use of the cestui que trust. (2.) Where any such purchase was made, or lease or annuity granted, for partial consideration hi, money or money's worth paid to the vendor or grantor for his own use or benefit, or in the case of a lease for the use or benefit of any person for whom the grantor was a trustee, the value of the considera- tion shall be allowed as a deduction from the value of the property for the purpose of Estate duty. This sub-section enacts that if the purchase was made or the Transactions lease or annuity granted for a "partial" consideration, the value for partial _ of such consideration is to be allowed as a deduction from the consideration, value of the property for the payment of Estate duty. The value of property '■ for the payment of Estate duty " is material in two ways, first, in determining the value of the aggregate so as to arrive at the "rate" of duty; secondly, in determining the amount of duty to be paid in respect of any class of property. Inasmuch as the property that is aggregated under s. 4, to determine the " rate " of duty, is limited to property " in respect 14 AGGllEGATION. Sect. 4. Aggregation of property to form one estate for purpose of duty. " of whicli Estate duty is leviable," the classes of property included in s. 3 are neither to be aggregated nor to pay duty. 4. For determining the rate of Estate duty to be paid on any property passing on the death of the deceased, all property so passing in respect of which Estate duty is leviable shall be aggregated so as to form one estate, and the duty shall be levied at the proper graduated rate on the principal value thereof : Provided that any property so passing, in which the deceased never had an interest, or which under a disposition not made by the deceased passes immediately on the death of the deceased to some person other than the wife or husband or a lineal ancestor or lineal descendant of the deceased, shall not be aggregated with any other property but shall be an estate by itself, and the Estate duty shall be levied at the proper graduated rate on the principal value thereof ; but if any benefit under a disposition not made by the deceased is reserved or given to the wife or husband or a lineal ancestor or lineal descendant of the deceased, such benefit shall be aggregated with property of the deceased for the purpose of determining the rate of Estate duty. All the property of a deceased person passing on the death is to be aggregated or thrown together so as to form one estate, and by s. 17 the total duty payable will depend on the principal value of such estate. As to how the principal value is to be ascer- tained, see s. 7, subs. 5. As to what property passes on death, see note to s. 2, sub-s. (I). The property to be aggregated is the property passing on death " in respect of which Estate duty is leviable." Hence the property exempted from Estate duty by s. 3 (transactions for money consideration), s. 8 (property of soldiers and others dying in the service of the Crown, and sums under 100/. payable to officials), s. 15 (1) (a single annuity not exceeding 25/.), s. 15 (3) (pensions and annuities payable by Government of British India), s. 15 (4) (advowsons free from succession duty), and s. 21 (1) (settlements PEOPERTY NOT AGGREGATED. 15 of personal property made before commeaoement of this Act that Sect. 5. are liable to probate duty). Property to form an estate by itself. — (1.) Property passing on the death of the deceased, in which the deceased never had an interest, is to form an estate by itself. For example, where the deceased had a special power of appointment by will over property in which he had no interest, and he exercises the power by will, the property that passes under the power is not to be aggregated with the rest of the appointor's property so as to increase the rate of duty payable out of the appointor's assets. (2.) Property which under a disposition not made by the deceased passes immediately on the death of the deceased to some person other than the wife or husband, or lineal ancestor, or lineal descendant of the deceased is also to form an estate by itself. Suppose A. to be tenant for life of an estate, and to possess personal estate to the value of 10,000/. If he has no issue the settled estate (m his death will pass to some collateral, say X., and by his will he leaves the 10,000/. personalty to Y. If the value of the personalty is aggregated with the value of the settled estate, Y. will have to bear a heavy duty, though he never had any interest in the settled estate. In meeting this difficulty the Act draws a distinction according as the settled estate on the death of the tenant for life devolves on — (1) the wife or husband or a lineal ancestor or lineal descendant of the deceased ; (2) some other person. In the latter case the value of the settled estate is not to be aggregated with the other property of the deceased, but is to be regarded as an estate by itself, and will therefore pay a lower rate of duty. But if the original settlement reserves or gives any benefit to the wife or husband, or lineal ancestor, or lineal descendant, of the deceased, such benefit, as distinct from the entire property out of which the benefit issues, is to be aggregated. (3.) Where the net value of the property in respect of which estate duty is payable, exclusive of property settled otherwise than by the will of the deceased, does not exceed 1,000/., the property is to form an estate by itself. See s. 16, sub-s. (3). 5. — (1.) Where property in respect of wtich Sect. 5. Estate duty is leviable is settled by tbe will of the SettieT" deceased, or having been settled by some other P'^°P«''*y- disposition passes under that disposition on the death of the deceased to some person not competent to dispose of the property, — 16 SETTLED DUTY. Sect. 5. The chief provisions of the Act relating to settlements are as follows : — By s. 1 "settled property" is liable to Estate duty at the ordinary rate. Settled property is defined by s. 22, sub-s. 1 (A) as property comprised in a settlement. As to the meaning of settlement, see s. 22, sub-s. 1 (i). By s. 22, sub-s. (3) the Act applies to property in -which the wife or husband of the deceased takes an estate in dower or by the curtesy in like manner as it applies to property settled by the will of the deceased. Once Estate duty is paid ttie property included in the settlement is not again liable to Estate duty until the death of a person who is competent to dispose of it, s. 5, sub-s. (2). lu consideration of this privilege the settled property is liable to an additional duty called the Settlement Estate duty, s. 5, sub-s. (1) (a), of one per cent., s. 17, less the ad valorem stamp duty charged on the settlement, s. 6, sub-s. (4), but such additional Settlement Estate duty is payable only once during the continuance of the settlement, s. 5, sub-s. (1) (6). The Settlement Estate duty is not payable in resjject of property settled by a disposition which has taken effect before the commencement of the Act, s. 21, sub-s. (4). Nor is it payable where the only life interest after the death is that of a wife or husband of the deceased. See s. 5, sub-s. (1) (a) below. Where an interest under a settlement fails by reason of the death of the person entitled before coming into possession and subsequent limitations continue to exist, the property in the settlement is not regarded as passing on death, s. 5, sub-s. (4). Where a settlement was made by will or deed by a person who died subsequent to the 1st August 1894, and Probate duty or account duty in the nature of probate duty has been paid, or is payable under the Customs and Inland Revenue Acts, 1881, Estate duty is not payable unless the deceased was competent to dispose of the property, s. 21, sub-s. (1). As to settlements by a husband and wife, see s. 21, sub-s. (6). To some person not competent to dispose of the property. — See note to s. 2, sub-s. (1) (a), as to the meaning of these words. On the death of a tenant for life settled property usually passes to another tenant for life, who is unable to dispose of the corpus of the settled property, except under the Settled Land Act, 1882, but by s. 22, sub-s. (2) (a), such statutory power does not make the tenant for life competent to dispose of the settled property within the meaning of this Act. Ihe same principle is laid down regarding fiduciary powers of disposition. (a) a furtlier Estate duty (called settlement estate duty) on the principal value of tlie settled property shall be levied at the rate herein-after specified, except where the only life interest in the property after the death SETTLED ESTATES. i< of the deceased is that of a wife or husband Sect. 5. of the deceased ; but The further Estate duty i^ 1 per cent., s. 17. Sctilement As to how '• principal value" is caleulated, see s. 1, sub-^s. (5), K^tate duty. (6), and (7). .Settlemint Estate duty is not payable : — (1.) Where the property is settled l.y a disposition which has taken effect before the commencement of the Act, s. 21, sub-s. 4. (2.) Where the net value of the i>roperty in respect of which Estate duly is payable exclusive of property settled otlierwise than by the will of the deceased does not exceed 1,000/., s. 16, siib-s. (3). The only life interest. — If there are life interests subsequent to the life interest of the husband or wife the further duty is payable. {b) during the continuance of the settlement the settlement Estate duty shall not be payable more than once. "VThen the ultimate remainderman succeeds to the fee the Sctdeinent property is still held under the settlement, bit if the -etlkment dutj payable istate duty has been paid on the determination of a previous lifi.- interest, it is not again payable. (2.) If Estate duty has already been paid in respect of any settled property since the date of the settlement, the Estate duty shall not, nor shall any of the duties mentioned in the fifth paragraph of the First Schedule to this Act, be payable in respect thereof, until the death of a person who was at the time of his death or had been at any time during the. continuance of the settlemeiit competent to dispose of such property. Suppo.se property to be settled on A. for life. r.:maiDder to 15. for life, remaindf-r to C. for lite, remainder in fee to D. If the Estate duty is paid on the ceath of A. and there is no re-setikment, it is not again payable until the death of D. Duties mentioned in the fifth paragraph of the First Schedule. — These words refer to the 1 per cerit. legacy and succes-ion dulv payable under the -io Geo. 3. e. ISi, and the Ifi & 17 Vict. c. .51. bv lineab. The duties are under certain circumstances remitted by the 44 Yict. c. 12. <. 41. T? 18 SETTLED ESTATtS. Sect. 5. Competent to dispose of such property. — See s. 22, sub-s. (2> (a), (6), and (c), and note to s. 2, sub-s. (1) (a). (3.) In the case of settled property, where the- interest of any person under the settlement fails- or determines by reason of his death before it becomes an interest in possession, and subsequent limitations under the settlement continue to subsist,, the property shall not be deemed to pass on his- death. Failure of interest. Ad valorem conveyance (Jut)'. If a pei'son who takes an interest under a settlement, (1) dies before his interest comes into possession, and if (2) subsequeut limitations continue, Estate duty is not payable on his death. (4.) Any person paying the settlement Estate duty payable under this section upon property comprised in a settlement, may deduct the amount of the ad valorem stamp duty (if any) charged on tJie settlement in respect of that property. Tliis sub-section places settlements by will and settlements by deed on the same footing ns far as the payment of taxes to the- estate is concerned. No tax or duty is levied upon the making of a will, but an ad valorem stamp duty is payable upon the making of a settlement. By the gtamp Act, 1891 (54 & 55 Vict. c. 39), an ad valorem duty of bs. for every lOOZ. of the amount or value of the settled property is payable. (5.) "Where any lands or chattels are so settled, ■whether by Act of Parliament or royal grant, that no one of the persons successively in possession thereof is capable of alienating the same, whether his interest is in law a tenancy for life or a tenancy in tail, the provisions of this Act with respect to settled property shall not apply, and the property passing on the death of any person in possession of the lands and chattels shall be the interest of his successor in the lands and chattels, and such interest shall be valued, for the purpose of Estate PAYMENT OF DUTY BY EXECUTOR. 19 duty, in like manner as for the purpose of Euccossion Sect. 5. duty. For a list of tlie annuities granted to persons ont'of the public revenues by Act of Parliament, see the Index to the Statutes. Estates have also been granted by Statute to the l>uke of ]\Iarlbofough, Lord Nelson, and the Duke of Wellington. See Index of Statutes. Collection and Becovery of Duty and Value of Property^ 6.— (1.) Estate duty shall be a stamp duty, Seethe, collected and recovered as herein-after mentioned. Collection and recovery- All stamp duties, for the time being chargeable by law, are of Estate under the control of the Commissioners of Inland Eevenue. See ''"*>'• the 54 & 55 ViQt. c. 38. s. 1. The Estate duty is to be cDllected by means of stamps, or by such other means as the Commissioners may prescribe, s. 8, sub-s. (16^. As to the "recovery" of Estate duty, see s. 8, sub-s. (1). (2.) The executor of the deceased shall pay the Estate duty in respect of all personal property (wheresoever situate) of which the deceased was competent to dispose at his death, on delivering the Inland Revenue affidavit, and may pay in like manner the Estate duty in respect of any other property passing on such death, which by virtue of any testamentary disposition of the deceased is- under the control of the executor, or in the case of property not under his control, if the persons accountable for the duty in respect thereof request him to make such payment. This sub-section distinguishes between three classes of Pajincnt of property :^ duty by (1.) The personal estate, wherever situated, of which the deceased '^^'^'^"*'"''- was competent to dispose at his death. The duty on this property is payable by the executor on delivery of the Inland Revenue affidavit. Probate duty was only payable on personal property that was regarded as locally situated within the jurisdiction. As to the meaning of the Avords " competent to dispose," see s. 22, sub-s. (2), and the notes to s. 2, sub-s. (1) (a). The word "executor" means not only executor or administrator, but " any person who takes. B 2 20 PAYMENT BY EXECUTO.?. S«ct. 6. " possession of or intermeddles with the personal property " of a deceased person," s. 22,sub-s. (1) {d). As to the meaning of the term in Scotland, see s. 23, sub-s. (11). " Personal property " in Scotland is to mean moveable property, s. 23, srib-s. (8). See also as regards an executor's liabilily, f. 8, sub-s. (3). The Inland Revenue affidavit means the affidavit under the enactments f-pecified in the Second Schedule, see s. 22, sub-s. (1) (ra). The executor will be required therefore to pay Estate duty on taking nut probate. In Scotland the duty will be payable on exhibiting and recording a duly stamped inventory, as provided by 48 Geo. 3. c. 149. See s. 23, sub-s. (G). (2.) Any other property passing on such death, which by virtue of any testamentary disposition of the deceased is under the control of the executor. Real estate bequeathed to an executor on (rust, for sale, or witha power of sale would apparently be an example of this class. See Williams on Executors and Administrators, 9th ed., p. 573. Here the executor may pay the estate duty on delivery of the Inland Revenue affidavit, but he is not bound to do so. '■Property" includes real and personal property, and the proceeds of sale thereof, and money or investment representing the proceeds of sale, s. 22, sub-s. (1) (/). (3.) Property not under the control of the executor. For example, an estate in fee simple which descends to the heir-at-jaw direct. The executor is not bound to pay the proportion of Estate duty chargeable in respect of such fee simple, but may do so if the heir-at-law requests him to make such payment. If the executor pays the duty, he is entitled to repay- ment from the owners or trustees of the property. See s. 9, sub-s. (4). (3.) Where the executor does not know the amount or value of any property which has passed on the death, he may state in the Inland Revenue affidavit that such property exists but he does not know the amount or value thereof, and that he undertakes, as soon as the amount and value are ascertained, to bring in an account thereof, and to pay both the duty for which he is or may be liable, and any further duty payable by reason thereof for which he is or may be liable in respect of the other property mentioned in the affidavit. PERSONS ACCOUNTABLE. 21 This sub-section relieves the executor of a difficulty that might Sect. 6. arise in caso the testator was entitled to property in a foreign country or in a colony. If tlie value of such property had to be Further ascertained before grant of probate, great delay might ensue. ^''°°"° As to the account to be furnished by the executor, see also s. 8, sub-s. (3). To pay the duty for which he is or may be liable. — The executor is liable for the Eslats duty on all personal property, ■wherever situated, of which the deceased was compoteut to dispose of at bis death. Sec s. 6, sub-s. (2). Any further duty. — If an executor biings in an account for 10,000/. the rate of duty is 4 per cent. 15ut if subsequently a further account is brought in of an additional 20,000/., the result is that the rate payable is 4^ per cent. The executor is required to pay duty at 4^ per cent, on the 20,000/., and the further duty of i per cent, on the 10,000/. mentioned in the original affidavit. (4.) Estate duty, so far as not paid by the executor, shall be collected upon an account setting forth the particulars of the property, and delivered to the Commissioners within six months after the death by the person accountable for the duty, or within such further time as the Commissioners may allow. Person accountable. — By s. 8, sub-s. (4), where an executor is not accountable for Estate dutj', the person to whom the beneficial interest in possession of the property passes is primarily liable to account. Trustees, guardians, committees, and persons in whom the property is vested, or who have the management thereof, except agents or bailiffs, are liable to account. Purchasers may also be called on to account, s. 8, sub s. (4). (5.) Every estate shall include all income accrued upon the property included therein down to and outstanding at the date of the death of the deceased. In estimating the aggregate amount of the deceased's property income for Estate duty, all income that has accrued due up to the date accrued at of his death is to be included, and all income accruing due after death, the date of death is to be excluded, but interest at the rate of 3 per cent, per annum on the Estate duty is to be paid in jespect of the interval that elapses between the date of the death and the date when the Estate duty is payable. See next subsection. (6.) Interest at the rate of three per centum per annum on the Estate duty shall be paid from the 22 PAYMENT BY INSTALMENTS. gect. 6. date of the death up to the date of the delivery of the Inland Revenue affidavit or account or the expiration of six months after the death, whichever first happens, and shall form part of the Estate duty. Interest. Iq the case of probate duty the duty was payable on all income that acciued due up to the delivery of the account. For the future the value of the estate for the purposes of Estate duty is to be the value as on the day of the death of the deceased. But interest at 3 per cent, is payable on the Estate duty from the date of the death up to the date of delivery of the affidavit. If the aiiidavit be not delivered within six months, interest at 3 percent. is payable up to the expiration of such six months, and interest at 4 per cent, after the expiration of such six months, under s. 8, sub-s. (10). But see next sub-section as to payment of the duty on real property by instalments. (7.) The duty which is to be collected upon an Inland Revenue affidavit or account shall be due on the delivery thereof or on the expiration of six months from the death whichever first happens. When duty After the expiration of six months the Estate duty becomes in arrear, and 4 per cent, interest is payable, see note to s. 8, sub-?. (10), but in the case of real property the duty may be paid by instalments, see s. 6, siib-s. (8). (8.) Provided that the duty due upon an account of real property may at the option of the person delivering the account be paid by eight equal yearly instalments or sixteen half-yearly instalments with interest at the rate of three per centum per annum from the date at which the first instalment is due, less income tax, and the first instalment shall be due at the expiration of twelve months from the death, and the interest on the unpaid portion of the duty shall be added to each instalment and paid accorditigly, but the duty for the time being" unpaid, with such interest to the date of payment, may be paid at any time, and in case the property is sold is due. ALLOWANCES. 23 stall be paid on completion of tlie sale, and if not Sect. 6. so paid shall be duty in arrear. This section gives the right of paying the Estate duty on real Paj'ment by ■estate by instalments spread over eight yesrs from the date of the iQsta.ments. death. Three per cent, interfst is payable on the duty for the time being unpaid. If an instalment is not paid at the date appointed, 4 per cent, interest will be payable from such date until "the instalment is paid. Keal property. — Leasehold interests are not real property. Delivery of the Inland Revenue affidavit.— By s. 23, sub-s. (6) Semland. these words mean in Scodand the exhibiting and recording a duly •stamped inventory under 48 Geo. 3. c. ,149. s. 38. Fixed, duties. — Where the fixed duty of 30*. on estates under c?OOZ. value, and of 50*. on estates over 300/. and under 500Z., is paid within 12 months after the death, interest is not payable, s. 16, sub-s. (5). 7. — (1.) In determining the value of an estate sect. 7. for the purpose of Estate duty, allowance shall be ~~f made for reasonable funeral expenses and for debts property, and incumbrances ; but an allowance shall not be made — • (a) for debts incurred by the deceased, or incum- brances created by a disposition made by the deceased, unless such debts or incumbrances were incurred or created bona fide for full consideration in money or money's worth wholly for the deceased's own use and benefit and take effect oat of his interest, nor (h) for any debt in respect wliereof there is a right to reimbursement from any other estate or person, unless such reimbursement cannot be obtained, nor (c) more than once for the same debt or incum- brance charged upon diff'erent portions of the estate ; and any debt or incumbrance for which an allow- ance is made shall be deducted from the value of the land or other subjects of property liable thereto. 24 ALLOWANCES. Sect. 7. Funeral ex- penses. Mourning. Debts and in- cumbrances. The deductions allowed .are (1) reasonable funeral expenses^ (2) debts, and (3) incunibnmees. Tbe 44 Viet. c. 12. s. 28: permitted reasonable funeral expenses to be deducted from the- gross assets in the case of grants of probate on or after the 1st June, 1881 when the deceased person died, domiciled in. the United Kingdom. What are "reasonable funeral expenses" depends mainly on the testator's condition in life, and on the prices that have to be- paid at the time. The question as to what funeral expenses will be allowed an executor has been considered in the courts as- against creditors .ind legatees. In Stag v. Punter, 3 Atk.- 119, Lord Hardwicke allowed 60/. In Hancock v. Podmore, 1 B. & Ad. 2o0, the Court of King's- Bench allowed 201. as against a creditor ia the case of a captain- in the army, the executor claiming 191. ; the total assets in the executor's hands, after paying 55/. for probate duty and 79/. for funeral expenses, being 129/. Where the deceased was solvent, 630/. was allowed in the- case of a man of great estate and reputation (Offiey v. Offley,. Piec. Chan. 26). In Paice v. the Archbishop of Canterbury (14 Ves., 364), Lord Eldon allowed the expense of 93/. \2s. Qd.. for mourning rings. Mourning for the deceased's relatives is not a funeral expense- (Johnson v. Baker, 2 C. & P., 207), though it is often passed as- against the residuary legatee. The cost of a monument or- tombstone to the deceased is not a funeral expense (Bridge v.. Brown, 2 Y. & Coll. C. G. 181). The deceased, by his will, n ay direct the executor to incur- certain expenses, such as the erection of a monument. The executor -will be justified in carrying out the deceased's wishes, but such an expense, not being a funeral expense, cannot be- deducted from the aggregate value of the estate in valuing such estate for Estate duty. The deduction in respect of debts in the case of probate duty was limited to dtbts due to persons resident in the LTnited Kingdom, and payable out of assets comprised in the affidavit (44 Vict. c. 12. s. 28). As regards debts and incumbrances this section permits them to- be deducted, but an examination of the section shows that ia order that a debt or incumbrance may be deducted, the following conditions must be fulfilled :^ First. — It must have been incurred by the deceased. Secondly. — It must have been incurred bond fide for full! consideration in money or money's -worth. Thirdly. — It must have been incurred for the deceased's own use. Fourthly. — It must take effect out of his own interest. Fifthly. — It must not be a debt for which reimbursement cam be obtained. DEBTS. 25 As regards debts due to persons resident out of tli" United Sect. 2". Kingdom they can only be deducted out of the personal property of the deceased in the United Kingdom, in the first instance, if — (1) tlie deceased contracted to pay them in the United Kingdom, or (2) they are charged on property situate in the United Kingdom. Sub-s. (2). But where it is proposed to pay duty on personal property situated out of the United Kingdom, the debts payable out of the United Kingdom may be deducted (see sub-s. 2). By the 44 Vict. c. 12. s. 28 debts for which an allouance was Vo'untary made on taking out probate were not to include " voluntary debts debts. " expressed to be payable on the death of the deceased, or payable '• under any instrument which .^hall not have been bond fide " delivered to the don°e thereof three months before the dealii " of the deceased." The present sub-section is wider in its terms, and covers all debts that were voluntary at the time they were incurred, i.e., those not founded on money or money's worth, e.g., marriage. The 44 Vict. c. 12. s. 28 does not allow " debts in respect Eeimburs»- " whereof . . . any real estate may be pennanently liable, or ment. '' a reimbursement may be capable of being claimed from any " real estate of the deceased, or from any other estate or person." Here the words " any other estate " are contrasted with " any real estate of the deceased,"' and would include leaseholds, th& result being that where the deceased had mortgaged his I'cal' or personal estate, and the executor was entitled under Locke King's- Act and the amending Acts (17 & 18 Vict. c. H3. ; SO & 31 Vict, c. 69. ; and 40 & 41 Vict. c. 34.) to be reimbursed out of such mortgaged estates, such mortgage debt could not be deductecJ from the amount on which probate duty was payable. The present section does not make any reference to real estate^ and it would therefore seem as if the words " other estate " mustr be taken as meaning an estate belonging to some other person. If the reimbursement is not due from some other estate, it may be due from some other person, as, for instance, where the debt is one in respect of which the deceased is a surety, the debt cannot be deducted. The last words of the clause permit the debt to be deducted if reimbursement cannot be obtained. The Commissioners would probably reqtiire proof that every elfort had been made to obtain, reimbursement. But where the person liable to make reimbursement has been adjudicated a bankrupt, the debr, less any dividend paid or payable, may be deducted. A mortgage debt may exist in respect of different estates, viz., Mortgage*, Blackacre and Whiteacre. If the debt is deducted from the value of Whiteacre it is not to be again deducted from the value of Blackacre. 26 ALLOWANCES, Sect. 7. (2.) An allowance stall not bs made in the first instance for debts due from tbe deceased to persons resident out of the United Kingdom (unless con- tracted to be paid in tte United Kingdom, or charged on property situate within the United Kingdom), except out of the A'alue of any personal property of the deceased situate out of the United Kingdom, in respect of which Estate duty is paid; and there shall be no repayment of Estate duty in respect of any such debts, except to the extent to which it is shown to the satisfaction of the Com- missioners, that the personal property of the deceased situate in the foreign country or British Possession in which the person to whom such debts are due resides, is insufficient for their payment. Debts due to A debt due to a person resident out of the United Kingdom is persons out of not to be deducted unless — the United (1) it is contracted to be paid in the United Kingdom ; or Kingdom. ^g) it is charged on property situated within the United Kingdom, but if Estate duty be paid on any personal (as opposed to real) property of the deceased situated out of the United Kingdom, the foreign debts may be deducted from the value of such property. Persons resident out of the United. Kingdom.— The Act contains no definition of " residence." Tl;e word does not appear to be here used in the sense of " domicile." Residence may be temporary or permanent, and it may be the domestic home or the place where business is carried on. In this sub-section " resident out of the United Kingdom " probably means 6o«a j'^cfe resident out of tiM United Kingdom at the time of the testator's death. Bond fide residence not amounting to domicile has received Tccognition from the English courts in divorce cases {Niboyet v. Niboyet, 4 P. D. 1, Brodie v. Brodie, 2 Sw. & Tr. 259.). Contracted to be paid in the United Kingdom. — If no place of payment has been agreed upon, the parties to a contract are presumed to contemplate payment in the place where the contract is entered into (T)on v. Lippman, 5 CI. & F. 1, at p. 12.) Bills of exchange usually mention the place of payment. Where no place of payment is mentioned, payment is due where tlie contract was made. By English law the contract is made where the delivery of the bill is effected. Bills of Exchange Act, 1882, s. 21. FOREIGN PKOPEETy. 27 And there shall be no repayment, &c. — li tlio deceased died Sect. 7. pofsessing 10,000/. personal property in New South Wales, and liis foreign debts amounted to 5,000/., the executor has to pay Estate duty on 5,O00Z. If the executor is not aware of the debts at the time he obtains probate and pays duty on the 10,OOOZ. and afterwards ascertains that there were 5,000/. foreign debts, he cannot claim repayment of duty in respect of such debts, but if the debts amounted to 15,000/., he can reclaim duty in respect of 5,000/. (3.) "Where the Commissioners are satisfied that any additional expense in administering or in realising property has been incurred by reason of the property being situate out of the United Kingdom, they may make an allowance from the value of the property on account of such expense not exceeding iu any case five per cent, on the value of the property. The expense of getting in a testator's estate could not be Expense of deducted in estimating (he value of such estate for the purpose of administering probate duty. The same principle holds as regards Estate duty, foreign but this sub-section gives the Commissioners a discretion to make P^P^'^'y- an allowance in respect of any additional expense in getting in property situate out of the United Kingdom. The words " has been incurred" would imply that the expense must be one that has actually been incurred at the time, and not a problematical expense. (4.) Where any property passing on the death of the deceased is situate in a foreign country, and the Commissioners are satisfied that by reason of such death any duty is payable in that foreign country in respect of that property, they shall make an allowance of the amoimt of that duty from the value of the property. The deduction allowed by this sub-section in respect of duty Deduction of payable on property situate in a foreign country is to be a '^"'7- deduction not from the Estate duty payable here, but merely from the value of such property ; the result being that the value of the aggregate will be reduced. This may affect the rate of duty. The owners of the foreign property will then have the double advaiitage of paying at a lower rate on the reduced value of the foreign property. 28 PRINCIPAL VALUE. Sect. 7. 16 & 17 Vict. u. 51. (5.) The principal value of any property stall he estimated to be the price which, in the opinion of the Commissioners, such property would fetch if sold in the open market at the time of the death of the deceased ; Provided that, in the case of any agricultural property, where no part of the- principal value is due to the expectation of an increased income from such property, the principal value shall not exceed twenty-five times the annual value as assessed under Schedule A. of the Income Tax Acts, after making such deductions as have not been allowed in that assessment and are allowed under the Succession Duty Act, 1853, and making a deduction for expenses of management not exceeding five per cent, of the annual value so assessed. Principal value. Deductions under the Income Tax Acts. By this sub-section the principal value is to be ascertained by- estimating what the properly -would bring if sold in the open market on the day of the deceased's death, but in the case of agricultural property, a maximum s'ubject to certain deductions is prescribed. The object of that portion of the section which relates to agricultural property is to prevent the speculative value of agricultural land in the neighbourhood of towns that might be used for building being taken into account for the purpose of the Estate duty. Agricultural property. — The maximum value is to be 25 times the annual value, as assessed under Schedule A. of the Income Tax A.ctg, after making certain deductions. By the Income Tax Act, 1842 (5 & 6 Vict. c. 35. Schedule A.), " the annual value of lands, tenements, hereditaments, or heritages " charged under Schedule (A.) shall be understood to be the rent " by the year at which the same are let at rack-rent, if the amount " of such rent shall have been fixed by agreement commencing " within the period of seven years preceding the 5th day of " April next before the time of making the assessment, but if the " same are not so let at rack-rent, then at the rack-rent at which " the same are worth to be let by the year, which rule shall be " construed to extend to all lands, tenements, hereditaments, or " heritages, of whatever nature, and for whatever purpose occupied " or enjoyed, of whatever value, except the properties mentioned " in No. II. and No. III. of this schedule." . INCOME TAX. 29 The section does not require a new assessment to be made as on Sect. 7. the day of the deceased's death. The words " as assessed " contemplate the assessment in force at the time. The deductions allowed under Schedule A., so far as land is concerned, are — 1 . For the amount of the land tax chai'ged on hinds, tenements, and hereditaments or heritages under the 38 Geo. III. c. 5., where the charge thereon shall not have been redeemed. 2. For the amount charged ou lands, tenements, hereditaments, or heritages by a public rate or assessment in respect of draining, iencing, or embanking the same. 3. By the 16 & 17 Vict. c. 31. s. 37 a deduction is allowed for the amount expended by the owner of land on an average of the 21 preceding years in the making or repairing of sea walls and embankments against the encroachment or overflowing of the sea, or a tidal river, though the sums expended may not have been charged by any public rate or assessment. By s. 35 of the Finance Act certain further deductions are Deductions allowed in respect of income tax under Schedule A. under Finance Act in the ease . of income tax. In respect of the income tax hereby imposed imder Schedule A., where the tax is charged upon annual value estimated otherwise than by relation to profits, the following provisions shall have •effect : — • (a.) In the case of an assessment on lands in- clusiA^e of the farmhouse and other buildings (if ary), the amount of the assessment shall, for the purpose of collection, be reduced by a sum equal to one-eighth part thereof ; and (b.) In the case of an assessment upon any house or building (except a farmhouse or building- included with lands in assessment), the amount of the assessment shall,- for the purposes of collection, be reduced — (i.) Where the owner is occupier or assess- able as landlord, or where a tenant is occupier, and the landlord undertook to bear the cost of repairs, by a sum equal to one-sixth part of that amount; and 30 ALLOWANCES. Sect. 7. (ii.) Where a tenant is occupier, and under- took to bear tlie cost of repairs, by sucb a sum not exceeding one-sixth, part of that amount as may be necessary to reduce it to the amount of rent payable by him. (c.) As between the owner and a mortgagee of bis property, or any person having a charge thereon, or entitled to any ground rent, rent- charge, annuity, or other annual sum payable thereout, the owner's right of deduction under the Income Tax Acts in respect of income tax shall be in no wise prejudiced or affected by the relief afforded by this section. Where the amount of the assessment in the case of lands (inclusive of the farmhouse and other buildings) is more than one-eighth, and in the case of any house or building (except a farm- house or building included with lands in assessment) is more than one-sixth, below the rent, after deducting from such rent any out- going which should by law be deducted in making the assessment, this section shall not apply. Deductions From 25 times the annual value, as assessed under the under Schedule A., is to be deducted, (1) such deductions as have not Succession been allowed in that assessment, and are allowed under the ir"*/ '' Succession Duty Act, 1853, and (2) the expenses of management, not exceeding 5 per cent, of the annual value so assessed. By s. 22 of the Succession Duty Act, 1853 (16 & 17 Vict. c. 61.), "in estimating the annual value of lands used for agri- " cultural purposes . . . .an allowance shall be made of all " necessary outgoings." " The term ' necessary outgoings ' means not all such outgoings as the predecessor may have thought proper to expend, but all such as are intrinsically necessary — such outgoings as it wp.s not in the option of the predecessor to expend or not as he pleased," per Bramwell B. in In re Earl Cotoley, L. R. 1 Ex. 288, at p. 294. Income tax is not a necessary outgoing. {In re Earl Cou-ley. lb., and ^ee In re Elwes, 3 H. & N". 719.) Neither are expenses of management. (lb.) 1853. OUTGOINGS. 31 (i.) Deductions in respect of outgoings. Sect. 7. 1. Chief rents. „ ^ ~. Uutgoingp* 2. Fines, compositions, reliefs, or charges incident to the tenure and paid by the successor. " If a successor, or any person on his " behalf, upon becoming entitled to any copyhold or other real " property shall be subject to any fines, casualties of superiority, " compositions, reliefs, or charges incident to the tenure thereof, " and due in respect of his succession, he shall be entitled to have '■ a deduction allowed to him of the amount of such fines, " casualties, compositions, reliefs, or charges from the assessable " value of his interest in such copyhold or other real property." 16 & 17 Vict. c. 51. s. 22. The method adopted for carrying out the provisions of this section is as follows : the amount of such tines, &c. is turned into an annuity for the life or other limited interest of the successor, in accordance with the tables annexed to the Succession Duty Act. This annuity is then deducted from the annual value of the succession. 3. Premiums on fire insiirance. 4. Repairs, where they have to be executed by the landlord. Generally 5 to 7^ per cent, on the gross rental is allowed in respect of buildings on farms. If the tenant be liable to repairs, no deduction can be made. 5. Where the lord compels the copyholder to enfranchise the copyhold under the 15 & 16 Vict. c. 51., amended by the 21 & 22' Vict. c. 94., the enfranchisement takes place in consideration of a rentcharge, and in such case the copyholder is entitled to an allowance in respect of such rentcharge. S. 35 of the Succession Duty Act, 1853. If the copyholder compels enfranchisement or voluntarily joins in enfranchisement, no deduction is allowed. 6. Tithes and tithe rentcharge are only allowed as a deductioa where payable by the successor, and where the property is- actually let. As to the valuation of tithes for Succession duty, see 16 & 17 Vict. c. 51. and s. 18 of this Act. 7. Rates such as sewers rate, improvement, highway, water,, county, town, drainage, and poor rates, provided they have been paid by the owner. But if the property tax assessment, or the- gross assessment to the poor, be returned as the annual value, then rates cannot be deducted. 8. The land tax, where paid by the owner in respect of property actually let. But where the land tax has been deducted under the Income Tax Acts, it cannot be deducted again. 9. Drainage charges. But, if terminable, a claim for succes- sion duty will arise on cesser of the charge (16 & 17 Vict. col. s. 5). But see above as to deductions in respect of drainage charges under the Income Tax Acts. (ii.) Deductions in respect of charges. — By the Succession Charges. Duty Act, 1853, s. 34, it is enacted : " In estimating the value of " a succession no allowance shall be made in respect of any 32 ALLOWANCES. Sect. 7. " incumbrance thereon created or incurred by the successor, not " made in execution of a prior special power of appointment, *' but aa allowance shall be made in respect of all other " incumbrances, and also in respect of any moneys which the " successor may, previously to his possession, have laid out in "' the substantial repairs or permanent improvement of real ■" property comprised in his succession ; provided that upon any ■*' successor becoming entitled to real property, subject to any ■" prior principal charge, an allowance shall be made to him in ■" respect only of the yearly sums payable by way of interest or *' otherwise on such charge as reducing the annual value pro •" tanto of such real property." Succession Duty Act, 1853, a, 34. The first portion of s. 34 enacts that no allowance can be made in respect of incumbrances created by the successor himself, and jiot made in execution of a prior power. Where A., tenant for life, and B., tenant in remainder, joined in disentailing and in resettling an estate on A. for life, remainder •to the use that A.'s widow should receive a life annuity of 1,000/., vwith remainder to such uses as A. and D. should jointly appoint; .and subsequently A. and B. exercised the power of appointing, by mortgaging the estate at different times for 90,000A, partly for the .•sole benefit of A. and partly for the joint benefit of A. and B., and iby appointing an annuity of 500Z. to B.'s son, it was held that, so far as succession duty was concerned, the mortgages for 90,000/. •were to be regarded as created by B., inasmuch as A. under the resettlement took back his old life estate, and the mortgages were "to be regarded as taking effect out of the inheritance of the son. An allowance has, however, been permitted in the case of incum- t)rances created by a preceding heir of entail under a Scotch :settlement with the successor's consent. {Lord Advocate v. Earl ^of Glasgoiv, 12 Sco. L. E. 215.) Wiliere the successor creates a charge before succeeding to the possession, he may have an allowance made to him when he obtains possession, or may postpone paying succession duty until ■the determination of the charge under s. 20 of the Succession Duty Act, 1853. The allowances in respect of incumbrances are therefore only -fidmissible where the incumbrance is not created by the successor. (iii.) Moneys laid out by the successor previous to his pos- rsession, in substantial repairs or in permanent improvement?, may Ibe deducted. (iv.) Unpaid instalments of duty for which the predecessor was liable. See Succession Duty Act, 1853, s. 21. (v.) Relinquished Property. — " Where any successor upon " taking a succession shall be bound to relinquish or be deprived ■" of any crown property, the Commissioners shall upon the com- -" putation of the assessable value of his succession, make such ■" allowances to him as may be just in respect of the value of ■" such property." lb. s. 33. INTERESTS IN EXPECTANCY. 33 By 52 Vict. c. 7. s. 10, sub-s. (1), " The allowance under g. 3 Sect. 7. " of the Succession Duty Act, 1853, to a successor upon taking a " succession upon the death of any person dying on or after the " 1st day of June 1889 shall only be made in respect of the " value of property which the successor may have acquired by " any title not conferring a succession on him, and which passes " from the successor to some other person." (6.) Where an estate includes an interest in expec- tancy. Estate duty in respect of that interest shall be paid, at the option of the person accountable for the duty, either with the duty in respect of the rest of the estate or when the interest falls into pos- session, and if the duty is not paid with the Estate duty in respect of the rest of the estate, then — (a) for the purpose of determining the rate of Estate duty in respect of the rest of the estate the value of the interest shall be its value at the date of the death of the deceased ; and (&) tlie rate of Estate duty in respect of the interest when it falls into possession shall be calculated according to its value when it falls into possession, together with the value of the rest of the estate as previously ascertained. This section follows the principle embodied in section 37 of Interests in the Succession Duty Act, 1853. expectancy. The expression " interest in expectancy " includes an estate in remaindei- or reversion and every other future interest, whether vested or contingent, s. 22, sub-s. 1 (i). Such an estate is to be included in the aggregate of the pro- perty that determines the rate of duty, and for this purpose is to be valued as at the time of death. It is, however, not necessary to pay the duty until the estate comes into possession, but if this course is adopted, the amount of duty will depend on the rate determined as above, and the value of the interest at the time it falls into possession. By s. 12 the duty on an interest in expectancy may be commuted. Where the interest in expectancy has been sold or mortgao-ed before the commencement of the Act, then no other duty is to be payable when the interest falls into possession than would have been payable if the Act had not passed, see s. 21, subs. (3). 34 CESSER OF INTEUKST. Sect. 7. (7.) The value of the benefit accruing or ariaing from the cesser of an interest ceasing on the death of the deceased shall — (a) if the interest extended to the whole income of the property, be the principal value of that property ; and (b) if the interest extended to less than the whole income of the property, be the principal value of an addition to the property equal to the income to which the interest extended. Cesser of By s. 2, sub-s. (I) (b), property in which the deceased or any interest. other person had an interest ceasing on the death of the deceased, is to be included in the property passing on death to the extent to which a benefit accrues or arises by the cesser of such interest. This sub-section prescribes how the value of the benefit accruing by cesser is to be determioed. The rule is as follows : — If the deceased enjoyed the whole interest from the property, then the principal value of the property is to be taken ; if the deceased enjoyed less than the whole income, then the principal value of an addition to the property equal to the income to which the interest extended is to be taken. As to how " principal value " is arrived at, see s. 6, sub-s. (5) , (8.) Subject to the provisions of this Act, the -value of any property for the purpose of Estate duty shall be ascertained by the Commissioners in such manner and by such means as they think lit, and, if they authorise a person to inspect any property and report to them the value thereof for the purposes of this Act, the person having the custody or possession of that property shall permit the person so authorised to inspect it at such reasonable times as the Commissioners consider necessary. Inspection of The account delivered is prima facie evidence of the value of property. jjjg property, but the Commissioners may decline to accept such value. This sub-section provides for inspection of the property. " Subject to the provisions of this Act." See s. 7, sub-s. 5 as to how the principal value of property is to be calculated ; .*. 7, sub-s. (6) as to the valuation of interests in expectancy, .ind s. 7, COLLECTION. 35 ■sub-s. (7) as to the valuation of teaefits arising by cesser of Sest. 7. interest. (9.) Where the Commissioners require a valu- ■ation to be made by a person named by them, the reasonable costs of such valuation shall be defrayed loj the Commissioners. ■See the preceding sub section. (10.) Property passing on any death shall not be ■aggregated more than once, nor shall Estate duty in respect thereof be more than once levied on the ■same death. This is to prevent the possibility of the Estate duty being levied One aggre- twice on the same death. gation. 8. — (1.) The existing law and practice relating Sect^S. to any of the duties now leviable on or with reference Supplemental ITT, I ■ 1 . . provisions as to death shall, subject to the provisions of this Act, to collection, and so far as the same are applicable, apply for the repwyment^of purposes of the collection, recovery, and repayment f^m ETa^te"" of Estate duty, and for the exemption of the property ^"'y- of common seamen, marines or soldiers -who are slain or die in the service of Her Majesty, and for the purpose of payment of sums under one hundred pounds "without requiring representation, as if such law and practice were in terms made applicable to this Part of this Act. This is the type of spction that is the deliglit of the legislator but the despair of the commentator. The existing law and practice relating to the death duties are scattered ovei- many Acts of Parliament and decided cases. It is proposed here to refer to the legal methods available for enforcipg payment of the death duties at the date of the passing of the Act. In the case of probate duty, the 55 Geo. 3. c. 184. s. 37 imposed Trobate dutj-. a penalty of lOOZ. and 10 per cent, on the duty on the executor for not proving wills veithin a given time, and s. 43 imposed a similar penalty for not paying full duty after discovery of too little paid at first. By 44 Vict. c. 12. a person who ought to obtain probate or letters of administration, or deliver a further c 2 36 REPRESENTATION NOT REQUIRED. Sect. 8. Legacy duty. Succe.=sion dutv. Temporary Estate duty. affidavit or exhibit an inventory, or who is required to exhibit an account and neglects to do so, is liable to a penalty of double the- amount of duty chargeable. As to legacy duty, if the duly be not paid wii.hin a given time, a penalty of 10 per cent, on the dutv is payable, 36 Geo. 3. c. 52. s. 29; 48 Ceo. 3. c. 149. s. 44. Executors are required to pay the duty on legacies within a given time, in default they incur a penalty of treble the value of the duty, 36 Geo. 3. c. 52. s. 29. As to succession duty, a penalty of 1 per cent, per month on the amount of duty is payable where neglect to give notice of a succession continues. Power to enforce accounts under the Succession Duty Act^ 16 & 17 Vict. c. 51., and under the Legacy Duty Acts was given by ss. 47 and 48 of the 16 & 17 Vict. c. 51., but these sections- were repealed by the 28 & 29 Vict. c. 104. By s. 55 of the last- mentioned Act, the Commissioners are empowered to sue out of the Court of Exchequer (now the High Court of Justice), a writ of summons requiring accountable persons under the Successioft or Legacy Duty Acts to deliver an account. See as to Scotland 19 & 20 Vict. c. 56. The 52 Vict. c. 7., which imposed the temporary Estate duty on estates exceeding 10,000/., imposes by s. 8 a penalty of- double duty on any person liable to render an account under that Act and neglecting to do so. The Finance Act, by s. 8, sub-s. (6), imposes a penalty oa persons not complying with its provisions relating to the furnishing of accounts and the payment of duties. Repayment. — See sub-s. (12). The property of common seamen, marines, or soldiers. — By the 55 Geo. 3. c. 184. sched., Pt. III., " probate of will, letters " of administration, confirmation of testament and eik thereto, " and inventory of the effects of any common seaman, marine, " or soldier who shall be slain or die in the service of His " Majesty, his heirs and successors," are exempt from all probate duties. Payment of snms under £100 without requiring represen- tation. — It is not necessary to obtain probate or to take out administration in order to pay over sums under 100/. in the following cases : — 1. Payment of a sum not exceeding 100/. by a friendly or industrial society to the next-of-kin of a deceased member intestate, 37 & 38 Vict. c. 42. s. 29, 38 & 39 Vict. c. 60. s. 15, 46 & 47 Vict. c. 47. s. 3. 2. Payment of the residue of the personal effects, not exceeding 100/., of an officer or soldier dying on service, after all preferential debts are discharged, by the Secretary of State for War or for India, to the widow, child, or relative of the deceased, under the 26 & 27 Vict. c. 57. s. 16. The .Secretary of State may require representation to be taken out. See also 47 & 48 Vict. c. 55. s. 4. PROTECTION OF PURCHASERS. 37 3. Payment by the Admiralty of the residue of any pav or Sect. 8. pension, not exceeding 100/., due at the date of the deatli of any officer, seaman, or marine at (be date of his death, to bis widow or oiher per;?ou entitled to the same. The Admiralty may require representation to be taken out, £S & 29 Vict. c. 111. 4. I'ayment by the Treasury of any sum not exceeding 100/. due at the death of any person in the Ciyil Service, 50 & 51 Vict. c. 67. 5. As to deposits in savings banks, see 50 & 51 Yict. c. 40. (2.) Sections twelve to fourteen of tlie Customs 52&53Yict. ^ ' ^ c. , . and Inland Revenue Act, 1889, and section forty- seven of tlie Local Eegistration of Title (Ireland) fet''^'"' Act, 1891, shall apply as if Estate duty Tvere therein mentioned as "well as Succession duty, and a> if an account were not settled within the meaning of any of the above sections until the time for the payment of the duty on such account has arrived. Tiie section? of the 52 & 53 Yict. c. 7., incorporated in this Protection of -Act, are as follows : — purchasers and mortgagees. 12. — (1.) Notwithstandino' tlie fortv-second section of 5- •'^ 53 Vict. "the Siiccession Duty Act, 1853, or any other ])rovision contained in that Act, real property, or any estate or interest therein, shall not, as against a purchaser for valuahlc consideration, or a mortgagee, remain charged -with or liable to payment of any sum for succession duty ■or duty herein-before imposed by this part of this Act, after the expu^ation of six years from the date of notice to the Commissioners of Inland Revenue of the fact that the suc-cessor, or any person in his right or on his behalf, has become entitled in possession t'j his succession or to the receipt of the income and profits thereof, or from the ■date of the fir-t payment by such successor or person of any instalment or part of the duty, in c-'se the successor shall not have availed himself of the option given to him liy section twenty-two of the Customs and Inland Revenue Act, 1888, or after two years froro the time for the pay- ment by such successor of the last instalment or pai-t of the duty, if he ha? availed himself of such option ; or, in the absence of any such notice or payment, after the 38 PROTECTION OF PURCHASERS. Sect. 8. expiration of twelve years from the happening of the- ' e\ent (whether before or after the passing of this Act) which gave rise to an immediate claim to such duty, or if such period of twelve years expires within six years from the date of the passing of this Act, then after the expiration of six years from the last-mentioned date. By s. 9 Estate duty is made a first charge on property which' does not pass to the executor as such and is not situated abroad. By the same section the property is not so chargeable as against a bona fide purchaser for value without notice. The incorporation of s. 12 of the 52 & 53 Vict. c. 7. will, limit the period within which the Revenue authorities can claim, unpaid duty from any bona fide purchaser for value with notice- 1o six years fl) from the date when the Commissioners of Inland Revenue are made aware of the fact that the person liable has- become entitled in possession, or (2) from the date of the first payment of Estate duty. If the Commissioners are not aware of a claim to Estate duty having arisen, or if no payment has been made, then the limit is 12 years from the date the claim arose. 52 & 53 Vict. (2.) The duty (if any) unpaid at the expiration of suchi c. 7, s. 12. period of six years, or of twelve years or six years, as the- case may be, shall be payable and paid by the successor or the persons mentioned as accountable in section forty- four of the said Act, other than the purchaser or mortgagee,, and shall become cliarged substitutively upon any other- estate or interest comprised in the succession of the suc- cessor, remaining vested in him, or in any person in his', right or on his behalf, other than the purchaser or mort- gagee, and in case of a mortgage upon the equity of redemption. The persons made liable by the 4'lth section of the 16 & 1 7 Vict, e. 51. are "every trustee, guardian, committee, tutor, curator, or " husband in whom respectively any property, or the management " of any property, subject to such duty, shall be vested, and every " person in whom the same shall be vested by alienation or other " derivative title at the time of the succession becoming au interest " in possession." Compare s, 8, sub-s. 4, as to the persons accountable for Estate duty. 52 & 53 Vict. (3-) "^^'^ section is not to lessen or effect any liability c. 7. 6. 12. of any successor or accountable person, other than the PROTECTION OF PURCHASER?. 39 purchaser or mortgagee, to payment of duty, whether out Sect. 8. of money received on any sale or mortgage, or otherwise ; but a purchaser or mortgagee shall not, for the purpose of obtaining the exemption conferred by this section, be bound to see that the duty is discharged out of the money or other consideration paid or given as the con- sideration for the sale or mortgage. The exemption from liability as given by s. 12 (1) is strictly confined to purchasers and mortgagees. 13. — (1.) Any person may cause an attested copy 52 & 53 Vict, (which shall be exempt from stamp duty) of any docu- °' ''• ^' ^^' ment which creates a liability for payment of any succession duty, or duty herein-before imposed by this part of this Act, other than a testamentary document admitted to probate, to be deposited witii the Commissioners of Inland Revenue at theii" principal office in London, Edinburgh, or Dublin, as the case may require, and such copy sliall be received at that office. This provides for lodging with the Commissioners an attested copy of any document under which a claim for duty arises, and any claim for duty must be made within six years, see sub-s. (3). (2.) The officer of the Commissioners receiving the copy shall, on request of the person making the deposit, and either by indorsement on the original document or other- wise, give a receipt in writing under his hand for the copy. (3.) After a receipt has been given by an officer for a copy of a document under this section, no person shall be Hable for payment of any duty under such document after the expiration of six years from the date of notice to the Commissioners of the fact which gives rise to an immediate claim to such duty. (4.) The costs of depositing a copy of a document and obtaining a receipt under this section shall be deemed costs duly incurred by a trustee, executor, or administrator, or any other person in the execution of his duties as trustee, executor, or administrator, or otherwise, under the document. 14. No person shall, under a testamentary document 52 & 53 Vict, admitted to probate, or under letters of administration, or ''^ ' ' ^' ^^' 40 executors' account. Sect. 8. under a confirmation, be liable for payment of any legacy duty or succession duty, or duty herein-before imposed by this part of this Act, after the expiration of six years from the date of the settlement of the account in respect of which the duty is payable, where such account was in all respects a full and true account and contained all the facts material to be known by the Commissioners of Inland Eevenue for the ascertainment of the rate and amount of .duty ; and no trustee, executor, or administrator shall, .after the expiration of such six years, be liable to such duty if it is proved to the satisfaction of tlie Commissioners that the account rendered was correct to the best of his knowledge, information, and belief. (3.) The executor of the deceased shall, to the best of his knowledge and belief, specify in appro- priate accounts annexed to the Inland Revenue affidavit all the property in respect of which Estate duty is payable upon the death of the deceased, and shall be accountable for the Estate duty in respect of all personal property wheresoever situate of which the deceased was competent to dispose at his death, but shall not be liable for any duty in excess of the assets which he has received as executor, or mighfc but for his own neglect or default have received. The executor's account. — Tiie account to be delivered liy the executor or administrator is not restricted, as in the case o£ probate duty, to personal estate, but is to include an account of all the property in respect of which Estate duty is payable. If he does not know the amount or value of any property he brings in a supplemental account under s. 6, sub-s. (3). The account should be delivered within six months of the death, otherwise the Estate duty will be in arrear, s. 6, sub-s. (6). By the 28 & 29 Vict. c. 104. s. 53 the Commissioners can enforce delivery of accounts. The Inland Revenue affidavit. — By s. 22, sub-s. , 1 (w) this means the affidavit made under the enactments specified in the Second Schedule to this Act with the account and Schedule annexed thereto. ACCOUNTS BY TRUSTEES. 41 Executor's liability to the duty. — The executor is not made Sect. 8. accountable for the estate duty on re.al estate, but only for the ■duty on the personal estate wherever situated of wliich the ■deceased was competent to dispose. This sub-section makes him accountable for the Estate duty on personal property situate outside the United Kingdom. If the ■executor desires to collect the personal estate of tlie deceased in a foreign country, or in a colony, he may have to take out probate in such country or colony. The personal estate of a deceased person vests in the executor by force of the will, and probate is only evidence of his title, and not the title itself. Hence there is good reason for saying that if an executor can get porjsession «f property situated abroad without having recourse to the courts, he can give a good discharge though he has not taken out probate in such country. It is possible that the foreign personal estate may never come into the hands of the executor. For instance, the testator might appoint A. to be his executor in the United Kingdom and B. to be his executor in a colony. Suppose B. to be lesident in such colony, and that the testator, after making certain bequests out of his English personalty, directs A. to remit the residue to B. In this case B. only obtains a title to the personalty in England. Assuming the colonial personalty to be liable to ;'o has boon dolivouHl undor this Act, bo jiavablo. and bo lrivisiiiil I'lH' tl\i> piiviiu'iil of !Vil(lilioii!il pnilmti' diilv, wln^rc it was iliscox riril Ihiil Iho lUMsontil osliilo was nf <;ro;iU'i' Viiluo tlmu tile viihu^ uu'iitioiii'il in llio ct'ilill- <'!ilo ^ivi'M liv lluM'ourl !i( tlu> I'lul i>l' ll'i> j>'ninl lis to th^\•;■l^>-^s viilu.- of tl\oVsliilo. (/A., s. W). Tiio viiluo lis osliiiuitcil ill tlu> iii'i'onnt is tho priiiiil ftii'ii' viiiiio for tlio piirposi' of duly. Too little duty. — Wlicro propiMty ol" tlio dcroiisod liiiMo to ^liilv is ilisiMVi-ri'il siilisoiiui-iil to tlu- piiyuu'iit of duty ill llio llist instiiiHO mlditioniil duly will bo piiyiiliio oil such propi-ily, mid if ;ri\i;!ito il lutiv ivsiilt ill phi'iiii;- tlu> pro|H riy ill ft class lliiil is lialilo lo a luLjlicr nilo tliivu the ralo lit which llic duly was oris^iiialiy ■»'nlcuhitcd. Unless a certifloato of disolvavgo lias boon dolivovod, A ccrliliciilc of (liscliiiri;'i> under section U) will only discliarfi'o the jiropeily shown hy the eertilic«t(> to ronii the esliite or pail ihereol'. Il'dutv lias been paid and » ceitillcate granted and siibseipically it is ascertained llmt the deceased possessed other property liable s not cover such ndditioiial prop(>rly, . cinered by S. ll,sub-s. .'f, « hich enaels that a eerlilicale under s. 10 shall not ulTect lliu riilo ol' duly payable (Ui any p-opcrtv al'terwards shown to have passed on the death, and the duly Ihei'eoii shall be at Htieh rale as wouM bo payahle if llie value tliereor were added to llui valiKMiC the properly on which lias been Mlii'inly paid. The iati> ol' duly will be the rate payahle if tliu additional propei'ty hail been orijfinally iiicliidctl in the ai'jjrei^ati". :Seeondly. — AN'ill additional duty be payable on (lie prop(>rly Ihal. (iri;j;inally paiil duty in respe<'l, ol {\[o dill(ireni'(\ between the orii;inal rate anil the rate to which the property would have been liable luid the lu^wly diseov(ii'ed propeiiv been included ill the orifi;inid a)';i;re^al,e 'i* Such addilional duty will iiol. he piiyiiblo ir 11 (lertillcalo of diMelia.rj;« has beiMi graiited. Treated as a duty in iirroiir, — My s. H, Hiib-s. 10, lnb^l•esl. on ■)iri-e;irH ol' I'Islaleduly is payable iis U' Ihny were iirreiirs ol' le;;iiey \('(Milor as s\icli. In oi'd<>r to ascertain if l,li(> dnly lias biHMi ])aiil, it is nuiHWSiiry to know (I) ll\ii valiio of tho propoi-ty in quoslion, (2) (lio value of the wholes properly liahlo lo duly, as liiis determines the rale of duly. (9.) Whore tlu* Oomniissionors aro satisfied that tho Estate duty leviable in respect of any property c.'iimot Avithont excessive aaci'ifice be raised at onco^ tliey may allow payment to bo postponed for such period, to such extent, and on i)ayment of such interest not exceeding four per cent, or any higher interest yiehhxl by the property, and on such terms, as the Comnnssieners think fit. By s. ;)!> of tho IG & 17 Viet. C. 61. tho Commissioners were Cnilitfordutj'- oiupowered "in any speeiiil eiise.s in which thoy may think it " expedient so to do, to enlari:;o tho time for payment of any " duty." ri>e interest payable on iiayinenis so posliionod is lo be f piT eenl."or any liip;lier inUMest yiehled by (lie property." Apjia- rently, if the property yields (i per cent., interest on postponed piiynients may bo eliarged at 6 per ei>i\t. if tho Commissioners- think lit. (10.) Interest on ari-eara of Estate duty shall bo pjiid as if the_y w. 55 Geo. 3. c. 184.- 56 Geo. 3. t. 56. 43 Vict. ^. 14. 44 & 45 Vict. c. 12. The Stamp Act, 1815 An Act the title of which begins with the words " An " Act to repeal the several " stamp duties " and ends with the words "manag- " ing the said duties." The Customs and Inland Revenue Act, 1880. The Customs and Inland Beveniie Act, 1881. Section thirty-eight. Section one hundred and seventeen. Section ten. Sections twentj-nino and thirty- two. I I^ D E X. ACCOUNTABLE pei'sons accountable for Estate duty, 40, 41. executor, 40. other persons, 41, 42. ACCOUNT enforcing under 52 Yicfc. c, 7., 36. enforcing under Succession and Legacy Duty Acts, 36. by- agent, 42. bailiff, 42. committees, 41, 42. executor, 40. duty to furnish, 40. of all property liable to duty, 40. tim.e for delivery, 40. to best of his knowledge and belief, 40. Tvhere he does not know value of property, 20. may bring in further account, 20. guardians, 41, 42. managers, 41. persons taking beneficial interest, 41. person taking an interest, 41, 42. trustees, 41, 43. form of, xxxi. settled, binds all parties, 60. ■when to be delivered, 21. by- executor, 40. other persons, 41, 42. ACCOUNT STAMP DUTY, xiii, 6. when still payable, 72. ACCRUED INCOME, 21. ACT OF PARLIAMENT property settled by, 18, ADDITIONAL SUCCESSION DUTY, xiii, 84. AD VALOREM STAMP DUTY, 18. 88 INDEX, ADMINISTKATION o£ foreign property, 27. ■when urxnecesSBry, 36. civil servants, 37. foreign executor, xxxi. marines, 37. member of friendly society, G6. officers, 36. seamen, 37. soldiers, 36. ADMINISTEATOE. 8ei Executor. foreign, xxxii. title of, xxxii. AFFIDAVIT Inland Revenue, 20, 76. additional, 20, 21. forms of, XXXV. in Scotland, 78. AGENT HOC accountable, 42. information as to property, 42. AGGREGATION, xxiv, 14. exceptions — property bequeathed for national purposes, 61. property in which deceased had no interest, 14, 15. property not liable to duty, 65. property passing under a disposition not made by the- deceased, 14, 15. property under 1,OOOL, 65. of the values of all property liable, xxiv, 14. once only, 35. settled property, xxiv, 14. AGRICULTURAL LAND, 74. AGRICULTURAL PROPERTY deductions — chief rents, 31. compositions, 31. drainage charges, 31. expenses of management, 28, 30. fines, 31. improvements, 31. incumbrances, 31, 32. ■where creatsd by successor, 32, land tax, 31. premiums on free insurance, 31. rates, 31. INDEX. AGEIOULTUBAL VH.OFEB.TY— continued. deductions — oont inued. reliefs, 31. relinquished property, 32. repairs, 31. tithes, 31. under Income Tax Act, 1842, 28. under Succession Duty Act, 1853, 29, 30, unpaid Successive duby, 32. meaning of, 74. principal value of, 28. deductions allowed, 28. ALLOAVANCES, xxv, 23. agricultural property. Sss Agricultural Property, debts, xxv, 23, 24. incurred for full consideration, 23. incurred for partial consideration, 23. due to persons resident out of the United Kingdom, 25_ reimbursement, 2S. voluntary debts, 25. when they can be deducted, 23, 24, 25. duty payable abroad, 27. expense of foreign administration, 27. funeral expenses, 23, 24. do not include mourning, 24. what are reasonable, 24. incumbrances, 23, 24. to be deducted once only, 25. when deducted, 23, 24, 25. ANOESTOE benefit reserved to, 14. ANNUAL VALUE of agricultural property, 28. ANNUITY for lives, determination of, 12, 13. granted for full consideration, 12, 13. granted for partial consideration, 12, 13. if purchased, exempt from duty, 7, 12, 13. liable to Estate duty, 7. except where payable to widow or child of ofEcsr, 61^ except where purchased, 12, 13. passing on death, 10. under 251. purchased jointly, 60. APPEAL FROM COMMISSIONERS as to — amount of duty, 51. repayment, 61. 90 INDEX. APPEAL PBOiM COMMISSIONERS— coiitmiiaZ. conditions of appeal, 51, 52. costs of, 52. to — court of appeal, 52. coanty court, 53. court of session, 52. High Court, 61. APPEAL FROM HIGH COURT to Court of Appeal, 62. leave required, 62. APPORTIONMENT OP ESTATE DUTY, 59. disputes regarding, 59. settled by High Court, 59. or county court, 69. ARBITRATION costs of, 62. reference of value to, 63. ARREARS OF DUTY interest on, 45. too little duty paid, 44. ASSESSMENT TO INCOME TAX reduction, 29. buildings, 29. land, 30. ASSETS liability of executor limited to, 40. BAILIFFS not accountable, 42, BENEFICIAL OWNER liability to account, 41, 42. liability to pay duty, 41 , 42. BENEFICIAL INTEREST meaning of, 42. BILLS OF EXCHANGE place of payment, 26. BISHOPS property attached to office, 7. lONA FIDE PURCHASERS protected, xxTiii, 12. INDEX. 9 1 BONA FIDE PUBOHASERS— cojifrnwed. not liable for duty, 47. BONA NOTABILTA, 10. BOND to secure payment, 82. BRITISH POSSESSIONS. See Pkoperiy in British Possessions. BUILDINGS when included in agricultural property, 74. CALCULATION of Estate duty, 43. CAPITAL MONEY under Settled Land Act, 61. may be applied to pay duty, 51. CERTIFICATE of value of property, 45. of discharge, 54. afier two years, 55. effect of fraud, 66. fraud, effect on purchasers, 66. on commutation of — Estate duty, 66. Legacy daty, 57. Succession duty, 67. of duty paid, 48. of Estate duty, evidence of charge, 49. on grant of probate, 47. no charge for, 47. CESSER OF INTEREST, 6. when interest liable to duty, 6, 7. where interest attached to an ofS.ce, 6, 7. vahiation of interest, 34. CHARGE certificate, evidence of, 49. Estate duty a chai'ge on realty, 48. except as against a liond fide purchaser without notice, 48. on property in British possessions, 70. grant of, for raising duty, 50, Succession duty, 66, 67, 68 CHARITY recipient of, 6, 7. CHIEF RENTS deduction of, 31. ^2 INDEX. CIVIL SBRYANTS, 37. CLASSES of property, valuation of, 44. COLLECTIOlSr by means of stampa, 47. COLOSIAL PEOPEETT. See Pkopeeiy in Beiiish Possessions. COMMENCEMENT OF ACT, 83. persons dying before, 72. COMMISSIONERS appeal from, 51. meaning of, 76. may give time for payment, 45. may order inspection of property, 34. may prescribe forms, 46. may remit duty, 46. may repay excess, 46. ■with interest, 46. COMMITTEE liability to account, 41, 42. to pay duty, 41. COMMUTATION of death, duties, 57. on interests in expectancy, 56. COMPETENT TO DISPOSE, xviii, 5, 76. dispositions taking effect out of interest of deceased, 6. institute in Scotland, 79, 80. heir of entail in Scotland, 80. persons, xviii, xix, 6, 76. tenants in tail, 76. donees of general powers, 76. exceptions — donees of fiduciary powers, 76, 77. mortgagees, 77. tenants for life under Settled Land Act, 77. where concurrence of another is required, 6. COMPOSITION for death duties, 57, 58, COMPOSITIONS deduction of, 31. CONCUEEENCE of another in a disposition, 77. CONFIRMATION, 78. INDEX. 93 CONSIDERATION debts incurred for full, 23. transactions for full, 12, 13. transactions for partial, 12, 13. CORPOEATIONS SOLE, 6, 7. property of, 6. CONTINGENTLY, 76. COPYHOLDER enfranchising, 31. COSTS of arbitration, 53. of appeal, 52. COSTS OF VALUATION ■where Commissioners appoint valuer, 35. COTTAGES, 74. COUNTY COD NOIL to appoint valuers, 63. COUNTY COURT appeal to, 53. apportionment of duty, 59. COURT OE SESSION, 81. CREDIT FOR DUTY, 45. CREDITOR, 79. CURATOR, 12, 79. CURTESY estate by the, 4, 77, 83. DEATH before succeeding to settled property, 18. before commencement of the Act, 71, 72. DEATH DUTIES composition for, 57, 58. meaning of, 57. DEBTS deduction of, 23, 24. incurred for full consideration, 23. due to persons resident out of the United Kingdom, when deducted, 26. place of payment, 26. to be deducted from property liable, 23. 94 IXDEX. DECEASED meaning of, 73. DECEASED PERSON" meaning of, 73. DEDUCTIONS. See Allowakoes. DELIVERY of account, 21, 22. DEPOSIT of document creating liability, 39. DESCENDANT benefit reserved to, 14. DISCHARGE from Estate duty, xxix, 54. by certificate, 54. after two years, 54. DISCOUNT Succession duty, 66, 68. DISPOSITION by husband or wife, 72. taking effect before commencement of the Act, 72. taking effect out of interest of deceased, 6. where concurrence of another is required, 77. DISPOSITION IN SECURITY, 82. DOMICILE determines liability to Legacy and Succession duty, 10. distinct from residence, 26. will yalid by law of, sxxi. foreign domicile, xxxi, 11. Succession duty, 11. DONATIONES mORTIS CAUSA, 8. DOWER estate in, 4, 77. DRAINAGE CHARGES deduction of, 31. DUTY PAYABLE ABROAD allowance for, 27. ENFRANCHISEMENT deductions in respect of, 31. ENTAILS IN SCOTLAND, 79, 80, 81. INDEX. 95 ESTATE BY THE CUflTESY, 4, 77. ESTATE DUTY a charge on realty, xxviii, 48. ■witMn the United Kingdom, 48 , apportionment, 59. exemptions from, xx. adyowsons, 61. annuity not exceeding 251., 60. annuities purchased, 7. interests attached to office, 6, 7. interests attached to a corporation sole, 6, 7. transactions for money consideration, 12. settlements of personalty made before the commencement ol the Act, 71. grant of, 2. meaning of, 74. property liable to, xviii, 2. donaUones mortis causa, 8. entailed estates in Scotland, 79. foreign moveable property, 10. general power of appointment, 6. gifts within 12 months of death, 8, 9. gifts where donor retained interest, 8, 9. interests ceasing on death, xix, 6. of which deceased could dispose, xviii, 5. property passing by surviTorship, 8, 9. personal property, 2, 3. property settled by deceased, 8, 9. real propertj-, 2. settled property, 2, 3, 4. rates of, 66. recovery of, 35. settled accounts, 60. under ReYenue Act, 1889, 4, 5. when payable, 22. in Scotland, 20. ESTATE IN DOWEB, 4, 77. ESTATE OF TERCE, 83. ESTATE OF COURTESY, 83. ESTATES PUR AUTRE YIE, 7. ESTATES UNDER 1,OOOZ., 65. exempt from — legacy duty, 65. settlement Estate duty, 65. succession duty, 65. not to be aggregated, 65. 'SQ INDEX EVIDBK-QE OF OHAEGE, 49. lEXEOTJTOR account by, 40. ■when to be delivered, 40. foreign, 11. English administration, xxxi. liability to duty, 41. not in respect of realty, 40, 41 . on personal property, 19. on foreign personalty, 41. Bieaning of, 19, 73. in Scotland, 79. -option to pay duty, 19. paying duty on real property, 49. may recover from owners, 49. position of, XV. property passing to, 48. time of payment of duty, 19. EXBOUTOE DE SON TOET, 73. EXEMPTIONS from Estate duty, sx, 2. from liability — mortgagees, 37. purchasers, 37. EXISTINa DUTIES, xiii, 25. jEXPEOTANOT. See Intekesi on Expectancy. :EXPE]srsES of raising Estate duty — deducted in respect of Succession duty, 66. ■FAILURE to disclose material facts, 65, 56. of interest, IS. FAEM BUILDINGS, 74. TAEMHOUSES, 74. T?INES deduction of, 31. :fivb hundb,ed pounds estates under, 62. in Scotland, 78. 3PIXED DUTY, xxvii. estates under 1,0002., 65. INDEX. 97 FIXED DUTIES interest, 65. when payable, 65. FOREIGN BONDS, ]2. rOEEIGN CREDITORS debts due to, 26. FOREIGN DUTS may be deducted from value of property, 27". FOREIGN PROPERTY expense of administering, 27. immoveables not liable to Estate duty, 10. moveables, when liable to Estate duty, 10» personalty, 19. wben liable to Estate duty, 10. FOREIGN STOCK, 12. FRAUD effect of, 65, 56. FRIENDLY SOCIETY payment to next-of-kin of decsased member, 36, 36. FUNERAL EXPENSES, 23, 24.. mourning not included, 24. monument not included, 24. wbat ai'e reasonable, 24. when deducted, 23, 24. FURTHER AFPIDAYIT, 20, 21. FURTHER DUTY when executor does not know value of property, 20, 21. FUTURE INTERESTS, 76. GENERAL POWER, 6. of appointment, 6, 76. to charge money, 77. GIFTS, 8. made within twelve months of death, where donor retains an interest, 8. GUARDIANS liability to account, 41. liability to pay duty, 41. HEIR-AT-LAW miy request executor to pay duty, 20. 98 INDEX. HEIE OV ENTAIL, 79. HERITABLE SEOUfiITT, 79. HEEITAaE, 79. HiaH COURT appeal to, 51. may appoint receiver, 46. HUSBAND OR WIPE benefit reserred to, 14. estate by the curtesy, 77. estate in dower, 77. only life interest that of, 16, 17. settlements by, 72. surviyorship, 73. IMMOVEABLES foreign, 10. INOIDBNOE of Estate duty, xxviii. INCOME accrued to date of death, 21. INCOME TAX assessment oa buildings, 29. assessment on land, 29. owner in occupation, 29. owner not in occupation.. 30. Schedule A. — deductions, 29. INCUMBRANCES allowance for, 28. created by successor, 32. includes mortgage, 75. includes terminable charge, 75. meaning of — in Scotland, 79. to be deducted from property liable, 23. INLAND REVENUE AFFIDAVIT in Scotland, 78. INQUIRY as to payment, xxxiv. INSPECTION of property, 34. INDEX. 99 INSTALMENTS Estate duty, 22. Succession duty, 66, 68. interest on, 22. ■vvlien due, 22. INSTITUTE, 79. INTEEEST on Estate duty, 22. after time for delivery of account, 22. not payable on fixed dutips, 2.3. not payable wbere fixed duty paid "within 12 months, G5. on arrears, 45. on excess duty, 46. on instalments, 22. wbere time is given, 45. en probate duty, 22. INTEREST ARISING BT CESSER valuation of, 34. INTEREST IN EXPBOTANOT, 33. meaning of, 33, 75. sold or mortgaged before commencement of the Act, 72. time of payment of duty, S3. valuation of, 33. as regards rate of duty, 33. INVENTORY in Scotland, 78. INVESTJilENTS representing proceeds of sale, 74. IRELAND resealing English probate, 65. resealing Irish probate, 65. JOINT INVESTMENTS, 9. JOINT TENANCIES, 48. JUDICIAL FACTOR, 12, 7S, 79. LAND agricultural, 74. LAND TAX deduction of, 29, 31. a 2 100 INDEX. LEASE reversion, 75. for lives — falling in of reversion, 12, 13. granted for full consideration^ 12, 13. granted for partial oonsideratiDn, 12, 13. LEAVE to appeal, 51. LEaAOY DUTY estates under 1,000^., 65. composition for, 58. penalty for non-payment, 36. on foreign property, 10. LIABILITY FOB DUTY committees, 41, 42. guardians, 41, 42. trustees, 41. LIFE INTEBEST subsequent to interest of husband ov wife, 17. LINEAL ANCESTOB benefit reserved to, 14. LINEAL DESCENDANT benefit reserved to, 14. LOCAL TAXATION QEANTS, 69. LOCALITY of property, 11. MANAGEMENT expanses of, 28. MANAGER liability to account, 41. liability to pay duty, 41. MANSION HOUSE, 74. MANUSCRIPTS bequeathed for national purposes, 61. MARINES ■when exempt from Estate duty, 35, 36. MABRIA.GrE. See Husband or Wife. MABEIAGE SETTLE "jiEN T. ,S.'e Settleheni. INDEX. 101 MONEY arising from sale of settled property, 51. may be applied to pay duty, 51. general power to charge, 6, 77. held on trust to lay out on trusts of settlement, 51. may be applied to pay duty, 51. proceeds of sale under Settled Lands Act, 51. may be applied to pay duty, 51. MONUMENT not a funeral expense, 24. MOETGAGE for raising duty, 50. MOETGAGEE not competent to dispose of property, 6. powers of sale, 77. MOETGAGE DEBT when to be deducted, 23, 24, 25. MOUENING not a funeral expense, 24. MOVEABLE PEOPEETT, 79. foreign, 10. NECESSAEY OUTGOINGS, 30. NEXT OF KIN, 79. NOTICE purchaser without notice, 48. OEEIGE holder of, 6, 7. OFFICEES payments to relatives of deceased, 36. ONE HUNDEED POUNDS estates not exceeding, no Estate duty, 62. " ON THE DEATH," 75. OPTION of executor to pay duty, 19. OEDEE IN COUNCIL, 70, 71. revocation of, 71. OWNER in occupation — income tax, 29. 102 INDEX. OUTGOINGS What are, £0, 31. PAROL TRUSTS, 4>, 75. PARTIAL CONSIDERATION, 12, 13. PARTICULARS to be fiirnislied, 42, 43. PARTNERSHIP PROPERTY, 48. PASSING ON DEATH. See Tkopehtt passing on Deatw. PASTURE, 74. PAYMENT OP DUTY by tenant for life, 50. PENALTY for not accounting, 43. for not furnisbing particulars, 43. for non-payment of legacy duty, 36. PENALTY foj" non-payment of Succession duty, 36. on executor not paying Probate duty, 35. on executor not proving well, 35. PERSONAL PROPERTY executor to pay duty on, 19. meaning of — in Scotland, 28, 79. settled before commencement of the Act, 71. PERSONS competent to dispose of property. See Competent to dispose. dying before commencement of the Act, 72. not competent to dispose of property, 6. donees of fiduciary powers, 6. donees of special powers, 6. tenants for life under Settled Land Act, 6. mortgagees, 6. with limited interest — paying duty, 50. entitled to a charge, 50. PICTURES bequeathed for national purposes, 61. PLACE of payment, 26. INPEX. l03 PORTIONS power to charge, 77. POSSESSION falling into, of interest in expectancy, 33. POWERS exerciseable in fiduciary character, 6, general, 6, 76. frpecial, 6. fiduciary, 77. as mortgagee, 77. as tenant for life, 77. of appointment — general, 6. special, 6. exercise of by will, 16. POWERS OF SALE, 20. to raise duty, 60. POWER OF DISPOSITION, 76. POWER TO MORTGAGEE to raise duty, 60. PREMIUMS on fire insurance, deduction of, 31. " PRESCRIBED," 76. PRINCIPAL YALUE how estimated, 28. of aggi'egated property, 14. of agricultural property, 28. deductions allowed, 28. maximum value, 28. of realty for Succession duty, 66, 67. for purpose of Succession duty — hew ascertained, 68. PRINTS bequeathed for national purposes, 61. PROBATE penalty on executor for not taking out, 35-. PROBATE DUTY Estate duty substituted for, xiii. not payable when Estate duty payable, 2, 5. when payable, 10. PROCEEDS OF SALE, 74. 104 IJfDEX. PBOPEETY aggregation of, 14 di-stinguislied from spes successionis, 4. forming estate by itself, 14, 15. in. which deoeasedhad no interest, 14, 15. liable to Estate duty, xviii. locality of, 11. meaning of, 3, 74. not liable to Estate duty, sx. PROPERTY m BRITISH POSSESSIONS, 69. deduction of duty there payable, 69, 70. Estate duty not a charge, 70. no local proceedings for recovery of duty, 70. not vesting in English executor, 70. Order in Council applying exemption, 70, 71. revocation of Order, 71. when liable to Estate duty, 69, 70. PROPERTY UNDER THE CONTROL OF EXECUTOR, 19, 20. payment of duty, 20. PROPERTY NOT PASSING ON DEATH interests under settlements failing, 5. situate out of United Kingdom, 6. trust property, 5, 12. PROPERTY PASSING ON DEATH, 5. annuities, 10. definition of, 5. donationes mortis causa, 8. foreign projierty, 10. gifts inter vivos, 8. gifts were donor retains an interest, 8, 9. interests ceasing on death, 6. meaning of, 75. of which deceased was competent to dispose, £. passing by survivorship, 8, 9. settled by deceased, 8. special assignation, 79. where inalienable, 18. PROPERTY PASSING TO EXECUTOR as such, 48. PROTECTION of purchasers and morfcagees, 37. PURCHASE for full consideration, 12, 13. partial, 12, 13. INDEX. 10a PUROHASEE bona fide 'without notice, 47. liability to pay duty, 41. PUB CHASERS protection of, after six years, 37, 38. RAISING DUTY, 50. by mortgage, 50. by sale, 50. by terminable charge, 50. RATE of Estate duty, 66. of legacy doty, xiv. of settlement Estate duty, 66. of succession duty, xiv. RATES deduction of, 29, 31. REAL PROPERTY bequeathed to executor on trust for sale* 20. executor paying duty may recover from owner, 49. payment of duty by instalments, 22. meaning of, in Scotland, 79. situate abroad, xxx. RECOVERY of Estate duty, 35. no proceedings in British possessions, 70. EEDUCTIOK" of assessment for income tax in the case of farm buildings, 29. owner, occupier, and landlord repairing, 29. tenant, occupier, and tenant repairing, 30. REIMBURSEMENT, 23, 25. RELINQUISHED PROPERTY deduction in respect of, 32. RELIEFS deduction of, 31. REMAINDER an interest in expectancy, 75. time for paying duty, 33. valuation of, 33. REMISSION of duty, 46. lOU INIHX. fw «ilV;\iu'U\^omo>it. dodviotioiv of, oL looiiUtv 111'. II. KKr.vii;s doaiU'tkn\ of. ol, ;!0. KKrAWMKST iiouo in vospoi't of foroigu dobts. "Jo. unless foreign assets iusullleier.t. -o. of excess, Iti. iippesxl US to. M. of exeess in vespeot of debts duo to pevsoiis resident sibveud. 'JO. to exeeutor b_v owrer, r>0. lo person prodneiiig eevtitiento. -k'. EEl'KKSKN'l'.V'l'lOX nieuniuj;' of. To. wlieu not required, oo, oO. to pay duty, IS^, 'JO. BESI'I.Vl.lNti I'lnglisli er Irish probate in Seotlaiid, 7S. Irish piobOite in Kugliuid, 05. nuniniui;- of, l20. out of the United l\.ingdon\, '20, an inleiestj in oxpeelauey, 75. exiept when expeetant ou ft term, 7.''. oil lease lor lives lullini; in, I'J, lo. linu' for paying d\ily, oil. \ ahiatioii of, ','\','k KENOt'.VflON of C'rder in (.^ouneil, 71. SALK by Order of C'onrt of lSe,ssion, 81. proeiH'ds of, 7-1. to rniso duty, 'AK 8AL1'; OF I'UOl'MRTY pnyini'ut of duty, '-'J. INDEX. lOT SCOTLAND application of Act to, 77. entails, 79. executor, moaning of, 79. rosealing English or Irish iirobate, 79. small estates in, 78. SOIENTIPrO COLLECTIONS Lcqueathod for national purposes, 61. SECUEITr as condition of appeal, 51, 52. SETTLED ACCOUNTS, 63. SETTLED PROPERTY, xxxiii, 4. entails in Scotland, 4. includes estates in dower and by the curtesy, 16. liable to Estate duty, 16. liiiblo to settlement Estate duty, 16. meaning of, 74. in Scotland, 79. jmssing to a stranger, 15. settlement Estate duty once payable, 17. where inalienable, 18. SETTLEMENT definition of, 4. failure of interest, 8. includes parol trust, 75. made by deceased, 8, 9. made before commencement of the Act, 71. not liable to settlement Estate duty, 72. when liable to Estate duty, 71. moaning of, 74. of personalty — liable to duty, 2, made before the Act, 2. SETTLEMENT ESTATE DUTY, 16. estates under 1,000?., 65. once payable during settlement, 17. rate of, 65. when not payable, 17. life interest to husband or wife, 17. SHARES locality of, 11, SHERIFF COURT, 78. SEAMEN when exempt from probate duty, 36. Estate duty, 35, 36, 37. 108 INDEX SEA "WALLS expenses of repair, 29. SCHOOLMASTERS, 7. -SETTLED LAND ACT, 1882, 75. power of sale under, 77. -SHORT TITLE, 83. SMALL ESTATES, xsvii. under 300Z., 62, 63, 64. 500?., 62, 63, 64. 1,000?., 64, 65. SOLDIERS when exempt from Estate duty, 36. STAMP DUTY Estate duty to he a, 19. ."SUBSTITUTIVE LIMITATION, 75. SUCCESSION DUTY changes introduced, 67. composition for, 57, 58. estates under l.OOOZ., 65. on foreign property, 10. on realty — discount, 67. a charge on the property, 66, 68. payable on principal value, 66, 67. payable on principal value, how ascertained, 68. payable by instalment, 67. penalty for non-payment, 36. value of real property, how ascertained, 66, 67. SUCCESSION DUTY UNDER REVENUE ACT, 1881 and 1889, 5. SUCCESSOR interest of — in alienable property, 18. SUMMARY DILIGENCE, 82. SURVIVORSHIP property passing by, 9. TEMPORARY ESTATE DUTY enforcing accounts, 36. TENANT FOR LIFE not competent to dispose of property, 6. paying duty, 50. entitled to a charge, 50. INDEX. lOSJ TENANT IN TAIL competent to dispose of proparty, 76. TENANTRY IN TAIL where inalienable, 18. TERMINABLE CHARGE, 50. TIME for delivery of account, 21. may be extended, 21. for payment of Estate duf-.y, xxvii, 23. on interest in expectancy, 33. on real property, 22. for paying fixed duties, 65. TITHES deduction of, 31. TOO LITTLE DUTY PAID, 44. TRUST PROPERTY does not pass on.dcath, 12. unless held on trust for deceased, 12. trust created by deceased, 12. TRUSTEE in Scotland, 12. liability to account, 41. liability to pay duty, 41. meaning of — in Scotland, 79. TRUST PROPERTY when not liable to duty, 12. TRUSTS parol, 4, 76. TRUST FOR SALE, 20. TUTOR, 12, 79. UNPAID DUTY a charge on realty, xxviii, 49. deduction of, 32. UNDERTAKING by executor to pay further duty,'20, 21. 110 INl^EX. VALUATIOX of iualiouablo settled propeity, IS. of pixiporty liable to dutv — by— comiuUsioners, St. oxeentors, 43. the High Court, M. vahier, o 1. So. interests arising by eesser. xxiii, ;>1. interests iu expeettiuey, xxiii, oo. priueiple ot'>fiilui\tiou, xxi, '2S. agiieultuial prejierty. "JS. of tithes. oL VALUE of realty for Sueeessiou duty. (.Hi, oT. VALUERS eourt may I'efov vsUue to, 5:>. appointed by county council, o'i. VICARS, 7. VOLUiS'TAHY DVavl'S. i^o. WIFK. -St ■ Hvsr.vNP oi: AVipk, WILL includes " codicil, " 73. meauiug of, 7o. WOODLAND, 71. ■VVOEKS OP A1!T bequeathed for national purjiosos, 61. London: Printed by E y b b and Spottiswoode, Printers to the Queen's most Excellent Majesty. l>l>