SUCCESSION DUTY BILL. (Hansard, 1 July 1853)

§ The CHANCELLOR OF THE EXCHEQUER
said, that the right hon. Member opposite (Sir J. Trollope) had moved a proviso to the effect that the annual value of any timber growing or standing on the said lands shall net be included in the said estimate; the meaning of which he understood to be, that no tax should be laid on timber under the Succession Duty Bill.

§ SIR JOHN TROLLOPE
said, that having seen the alteration proposed in the clause by the right hon. Gentleman, it was his intention to withdraw the proviso

§ The CHANCELLOR OF THE EXCHEQUER
said, he thought that an inconvenient course of proceeding. It was desirable to determine whether in some form a tax should be laid on timber.

§ SIR JOHN PAKINGTON
said, the right hon. Gentleman seemed to have forgotten the circumstances under which the proviso was moved. When the Committee decided against the plan of the Government, his right hon. Friend (Sir J. Trollope) placed his proviso in the hands of the Chairman. 1130 That was done on the suggestion of a noble Lord and a right hon. Gentleman opposite. Progress was reported before any decision was come to. Since that time his right hon. Friend had been informed that his proviso was unnecessary, and he, therefore, had no disposition to press it. The right hon. Gentleman, probably smarting under a feeling of annoyance at having been left in a minority to-night, now opposed the withdrawal of the proposition, although the circumstances under which it was made had completely changed. If the right hon. Gentleman would not allow it to be withdrawn, he trusted his right hon. Friend would allow it to be negatived without a division.

§ The CHANCELLOR OF THE EXCHEQUER
said, he could not commend the right hon. Gentleman for the tone and manner in which he had urged his recommendation, particularly if he wished it to be acceded to. The proviso had been moved as a mode of inviting the Committee to declare a negative on the principle of the taxation of timber in any form. Now, what did the right hon. Member mean by proposing the withdrawal of that proviso? If he did not mean to contest the principle that timber ought to be taxed, he had no objection to the Withdrawal of the proviso.

§ SIR JOHN TROLLOPE
said, the right hon. Gentleman had prepared a new clause, which would raise the whole question, and he was ready to meet him on that clause. He had acted in a spirit of the most perfect courtesy towards the right hon. Gentleman, and he regretted that he was not met in a similar spirit.

§ The CHANCELLOR OF THE EXCHEQUER
said he was willing to admit the perfect fairness and eandour of the right hon. Gentleman, and he had no wish to press him to a vote.

§ MR. HENLEY
said, he begged to express a hope that at some stage of the proceedings the right hon. Gentleman would give the Committee some information as to the mode and manner in which the new tax was to be collected.

§ MR. ALCOCK
said, he was glad to find that the Chancellor of the Exchequer had no intention of giving way on the subject of timber, which ought to pay its proportion of succession duty. He knew of one estate, valued at 40,000l., the timber on 1131 which was worth 10,000l.; arid some years ago the estate of Hafod, consisting of some 30,000 acres, was sold for about 70,000l., one half of which arose entirely from timber. It would be most unreasonable to exempt timber from the duty.

§ The CHANCELLOR OF THE EXCHEQUER
said, he was willing that the discussion on timber should be postponed, and that the clause should be postponed.

§ MR. HENLEY
said, he objected to this clause, on the ground that on any estate in which there was an advowson, a person would never know when his account with the Stamp Office was really closed. If a man were to sell an advowson two or three times over, he did not understand from the clause whether or not he should have to pay the tax two or three times over. An advowson might also increase in value after the succession, and then, when it was sold, it would have to pay a larger tax than it would have paid if rated at the time of succession.

§ The CHANCELLOR OF THE EXCHEQUER
said, the right hon. Gentleman appeared to think that the motive of this clause was to catch any possible increment to the value which might attach to Church property. Now, this was by no means the motive of the clause. It was not wished to look upon Church property as upon ordinary merchandise, and the Government had thought themselves justified in saying, that unless in the case of an absolute sale, the property should pay no tax at all. In adopting this course they had been guided by higher principles than those of mere finance. In framing this clause, the question he had to consider was, whether the tax upon advowsons should be levied in the manner proposed in the Bill, or whether the Church patronage belonging to a person should be valued at his death, and his successor be obliged to pay duty upon it. His opinion was, that the first mode was the more lenient of the two, and, therefore, he had adopted the extremely indulgent course of saying to the owners of advowsons that, except in the event of absolute sale, there should be no tax laid upon them. Surely the right hon. Gentleman opposite did not mean to say that this kind of property should be liable to pay duty upon the occasion of every succession.

§ MR. G. BUTT
said, he considered the 1132 clause to be very plain in its meaning. As he understood its operation, it was, that if a presentation was sold for 1,000l., it should pay a tax upon 1,000l. He saw no objection to leaving the clause as it now stood.

§ LORD HARRY VANE
said, he thought it would be extremely unjust to lay a tax upon advowsons not sold. He apprehended, however, that there were some practical difficulties connected with the clause which would prevent its successful working.

§ MR. MALINS
said, he considered that there was a question worthy of consideration, and that was, whether it was worth while to tax advowsons at all. Many persons succeeded to estates including advowsons without the slightest intention of ever selling them; but circumstances might arise twenty years afterwards which would compel them to act otherwise, and then they would for the first time become liable to succession duty. The best and safest principle appeared to him to be, at the succession to assess the value of the property, not including the advowsons, and to charge duty upon that amount.

§ The CHANCELLOR OF THE EXCHEQUER
said, he would admit that the idea of not taxing advowsons or presentations was a new one; but he could not agree with the hon. and learned Gentleman that they had the slightest possible claim to exemption. It would, in his opinion, be very far from reasonable to exempt that particular description of property, which was only just recognised by law, and the existence of which was not very desirable in a social point of view, from the operation of this tax. It seemed to him, on the contrary, to be the most fitting description of property to be taxed.

§ MR. NEWDEGATE
said, he wished to point that there was a distinction between landed property and property in mines. Land was reproductive, whereas a mine was not. He wished to know, in the case of a person holding a fee-simple, and another only possessing a life interest in it, if both would be taxed alike.

§ MR. MALINS
said, he also took exception to the clause, on the ground that there was no means of compelling agreement between the parties as to the number of years to be taken as the basis on which to calculate the value of the property.

§ The CHANCELLOR OF THE EXCHEQUER
said, he understood the hon. Gentleman (Mr. Newdegate) to ask him whether the owner of a mineral estate was to have the same benefit as the owner of a real estate, or would a man with a fee-simple be charged on the same basis as a man who had only a life interest. He could only say that the man having a life interest would be charged upon that life interest.

§ MR. G. BUTT
said, he must beg to ask the right hon. Gentleman how he proposed to carry this clause into effect. In the first part of the clause it was provided that the annual value should be calculated upon the average profits during such a number of preceding years as should be agreed upon between the Commissioners and the successor. Now, he did not see what power existed for carrying such an agreement into effect, or how that part of the clause could be worked; and he was equally at a loss to understand in what manner, in the event of the period being agreed upon, the principal value of an unwrought mine was to be determined.

§ The CHANCELLOR OF THE EXCHEQUER
said, that in the present clause there were two alternatives. The latter part of the clause, he apprehended, would have the effect of inducing persons to consent to an agreement with the Commissioners, for, if not, a valuation would be made of the property, and that was generally not considered desirable. The course of proceeding would be that persons succeeding to such property would have presented to them a case for agreement on the number of years; if no agreement were made, then there would be a valuation of the property. With regard to unwrought mines, they would not be taxed at all.

§ MR. G. BUTT
said, he thought that it would be convenient in the first part of the clause to fix the number of years.

§ The CHANCELLOR OF THE EXCHEQUER
said, he must entirely disagree from that opinion; it would, he thought, be most inconvenient to specify a fixed number of years in all cases.

§ SIR JOHN PAKINGTON
said, that nothing could show more strikingly than the clause now under discussion, the excessive difficulty and the risk of injustice which were incurred in imposing a succession duty. The right hon. Gentleman the Chancellor of the Exchequer did not by that clause give the successor the same option which he gave him in the clause 1134 with respect to timber, of paying on an average of receipts, or on the capital value of the property. He (Sir J. Pakington) knew at the present moment several instances of mining property which would be affected by this clause. He would suppose a case where a mine had been just opened and a vein struck. Suppose then a succession to take place; how could it be possible to ascertain an average value in that case? He should move, by way of Amendment, the omission of the following words:— Or if no such period shall be agreed upon, then the principal value of the property shall be ascertained, and the annual value thereof shall be considered to be equal to the interest, calculating at the rate of 3l per cent per annum on the amount of such principal value.

§ The CHANCELLOR OF THE EXCHEQUER
said, that the chief objection to the clause seemed to be the difficulty of making valuations; but he need not remind the Committee that that difficulty was got over every day with reference to every description of property. It was usual for parties to take unopened mines, and to hold them in every possible state; and the question which the right hon. Baronet opposite considered so difficult frequently came before the House in the shape of leasehold interest. No mine was either let or taken without what amounted to a valuation in the sense in which a valuation would be required under this clause. He hoped, therefore, that the Committee would reject the Amendment, which, if carried, would render the clause completely inoperative.

§ MR. HENLEY
said, that it was much easier to ascertain the value of mines under lease than mines which existed in a large real property, where it was impossible to say to what extent the mineral extended.

§ MR. G. BUTT
said, he altogether dissented from the construction put upon the word "mine" by the right hon. Chancellor of the Exchequer; and appealed to his hon. and learned Friends the Attorney and Solicitor Generals to say if such was the correct and legal meaning which was meant to be conveyed by the word "mine?"

The ATTORNEY GENERAL
explained that the clause referred to open mines, and that its meaning was apparent from its subsequent wording.

The SOLICITOR GENERAL
said, considerable unnecessary alarm existed 1135 about the clause; but the fact was, that, if the Motion of the right hon. Baronet (Sir J. Pakington) was accepted, it would be impossible to include mineral property under its operation.

§ MR. KENDALL
said, the clause was based on an assumption that what had been profitable would be profitable again. Mines were treated as real property. He did not deny that enormous fortunes had been made in Cornwall, both by the proprietors of mines and those who worked them. But while there were great prizes, the blanks were enormous; it was a complete lottery. He possessed some mines which, twenty years ago, were yielding between 2,000l. and 3,000l. a year; the vein suddenly failed, and he now received only 74l. a year from those fields. Had he died at the former period, his son would have had to pay the succession duty on the larger amount. The case was the same with all the tin, lead, and copper mines—the value was continually fluctuating. A vein might dip into a neighbouring mine; and it consequently became valueless. He hoped the Chancellor of the Exchequer would defer the clause, in order to consult some practical men. He did not wish to evade the tax, though he was not at all sure that this property ought to be taxed. The only plan he could suggest for its taxation was, that as there was great speculation in mines, which were generally sold for about five years' profits, a deduction should be made from this for the plant, &c, which did not belong to the proprietor, and that the value should be taken at about 3½ years' purchase.

§ The CHANCELLOR OF THE EXCHEQUER
said, he did not see any reason for postponing the clause. No doubt there was great uncertainty about mining property, especially that of Cornwall; but, if the mode of valuation suggested by the last speaker was a correct one, why should it not be agreed upon between the parties I and the Commissioners? This would be much better than introducing certain words into the Act. It was said that when land was sold in Cornwall, supposed to have mineral property under it, it only fetched about one year's purchase more; and what could the taxpayer desire more than that he should be assessed on the same principle?

§ MR. KENDALL
said, he must repeat that it would be impracticable to carry out the clause as it stood. Where a proprietor had large mineral property, his son seldom 1136 got it, for a vein in Cornwall rarely lasted above two years.

§ MR. WALPOLE
said, he must recall the attention of the Committee to the question raised by the Amendment—whether the alternative contained in the clause should be struck out. He agreed with the hon. and learned Solicitor General that some such proviso was necessary. If he understood the clause right, a party coming into possession of a mine, and paying the tax on its then value, would be entitled to an allowance in the event of its becoming depreciated in value. If a man had got an estate of a thousand acres with a mine unopened, he was not taxed; but if a man had got an estate of a thousand acres with an opened mine, they taxed him on an amount which he might not get in his lifetime. That difficulty they would get into with this clause; but it was a difficulty incidental to the tax, and was one of the objections to the Bill. They ought to strike out of the Bill all the expressions which affected future contingencies, and they would then remove half the objections to the Bill. The Bill ought to be so framed that there should be no doubt that a man could not be taxed for an unopened mine.

The SOLICITOR GENERAL
said, he was disposed to remove every word that was likely to create a doubt as to the meaning of the clause. As to the suggestion of the right hon. Gentleman, he was disposed to think that if they adopted it in the Bill, it would create in some cases the greatest possible hardship, inasmuch as the property at time of death might be exceedingly productive, and yet afterwards become almost valueless.

§ MR. DRUMMOND
would suggest, whether it would not be better to take a number of years, upon which the average of the profits should be taken.

§ The CHANCELLOR OF THE EXCHEQUER
said, he thought that the second part of the clause would meet the view of the hon. Member.

§ MR. MICHELL
contended that a mine was not a mineral, but the means by which one got at a mineral. Besides, it was a fact that nine-tenths of the mines in Cornwall yielded nothing at all, while some in other parts of the country yielded 50,000l. a year. He would, therefore, suggest the addition of words making the tax payable only on a mine yielding profit, that profit to be settled by arbitration.

§ MR. BOOKER
said, he thought that the 1137 clause should run thus:—That the yearly value of any manor, mine, or other real property producing a fluctuating yearly income, should be calculated on the average profits, or the income derived therefrom.

§ The CHANCELLOR OF THE EXCHEQUER
said, he had no objection to the words proposed by the hon. Member (Mr. Booker), as he then understood them, but perhaps the hon. Member would furnish them to him in writing.

§ MR. HENLEY
said, he considered that the annual value of the mines being taken to be equal to interest calculated at the rate of 3 per cent, was fixing the assumed value at too high a rate. Suppose 100 acres of land assumed to have coals under them. That would be valued as mineral land at so much per acre. Then, to arrive at the annual value, you would take 3 per cent upon the acreable valuation. That he considered to be a high rate at which to ascertain the presumable annual value of the mine.

§ VISCOUNT GALWAY
said, the right hon. Chancellor of the Exchequer seemed to think that all mines were of the same value. Coal mines paid poor-rates, but lead mines did not. He hoped, since this highway robbery was to be made on land, that the Chancellor of the Exchequer would go further, and subject lead mines to the poor-rates.

§ MR. G. BUTT
said, the first words of this clause were, "Where any body corporate, company, or society, shall become entitled?" &c He wished to know what meaning was attached to the words "company or society?" They appeared to him to be too general, and to convey no definite meaning. In the latter part of the clause, the words used were, "Body corporate, or registered company," which were intelligible enough.

§ The CHANCELLOR OF THE EXCHEQUER
said, the words included a vast number of what he might callquasi corporations—that was to say, companies or societies in every possible form not incorporated, but which were the recipients and holders of money. For instance, the clause would be applicable to charitable institutions. Those were not bodies corporate, but they were companies or societies. He believed that even the halls at the universities would come under the same words. 1138 If there were any words which the hon. and learned Gentleman could suggest, he (the Chancellor of the Exchequer) would consider them.

§ MR. G. BUTT
said, he had asked for information; but he would just observe that ordinary companies were notquasi corporations.

§ MR. APSLEY PELLATT
said, he wished to give notice that he should move, as an Amendment in this clause, that after the words "body corporate," be inserted the words "and corporation sole, whether lay or ecclesiastical." His object was to bring before the notice of the Committee the question whether the clergy of the Church of England, receiving large amounts of the national finances, ought not to pay a portion of them as a tax on succession.

§ The CHANCELLOR OF THE EXCHEQUER
said, the Amendment of the hon. Gentleman would not add in the slightest degree to the effect of the clause. Every corporation sole, whether lay or ecclesiastical, was beyond all question a body corporate, and was, therefore, already subject to the operation of the clause.

§ MR. APSLEY PELLATT
said, he had spoken to competent authorities, and he had been told that without the words he suggested, clergymen would not be liable. He understood it was said that ecclesiastics were not to be included in the Bill on the same ground that Judges were exempted. But there was a wide distinction between the two classes of persons. Judges could not discharge their duty by deputy; a clergyman could—he might employ a curate. Archbishops with 15,000l. a year, bishops with 10,000l. and 8,000l., down to 4,000l. a year, were persons who surely ought not to be excluded from paying their share of the national burdens.

§ The CHANCELLOR OF THE EXCHEQUER
said, that the hon. Gentleman had raised on this clause a question which he thought he could not bring within the scope of it, as he understood his object was that the bishops and clergy of the Church of England should be liable to pay this tax on taking their benefices, incumbencies, or bishoprics—[Mr. PELLATT assented]—that taking a benefice should be considered as a succession, and that the incumbent taking it should he liable to pay duty upon it. Now, he thought it had been clearly understood that this clause merely referred to successions accruing to a corporation on death, and did not at 1139 all refer to the successive enjoyment of the property of a corporation by the individuals of whom it was successively composed. The tax to be imposed on property in the possession of corporations was to be dealt with by a different measure. They were not here dealing with corporations in regard to property of which they were possessed, and in regard to which they stood in the position of predecessors before they did in that of successors; but merely with the case when a private individual was the predecessor, and a corporation was the successor. In that case no distinction was drawn between a clergyman and any other corporation. A clergyman did not, however, take a benefice as a successor, and it would be necessary to alter the entire Bill if it was desired to tax him on that event.

§ MR. HENLEY
said, that, by existing arrangements, large amounts of property were constantly coming under the control of the Ecclesiastical Commissioners, and, as he understood the Bill, as leases for lives dropped, those Commissioners would have to pay the 10 per cent legacy duty.

The SOLICITOR GENERAL
said, that the Ecclesiastical Commissioners took property as trustees for a great variety of purposes, and the property accruing to -them for public purposes would not come within the purview or operation of this measure.

§ MR. MALINS
said that, as it was then past 12 o'clock, and the House had sat till after 3 o'clock that morning, he must move that the Chairman report progress. He could assure the Chancellor of the Exchequer that he was labouring under great physical exhaustion, and he knew that was the case with other hon. Members, and he thought they ought not to proceed with the discussion of this measure, some of the clauses of which were strongly objected to.

§ The CHANCELLOR OF THE EXCHEQUER
hoped they might be allowed to go on with the Bill until they arrived at some clause to which serious objections were entertained. When they came to any point of great interest or difficulty, they might stop, and it would then be known that the Committee would recommence the consideration of the Bill at that point.

§ MR. HENLEY
said, that, having been in attendance upon a Committee, he had been in that House since 1 o'clock, and he 1140 thought the further consideration of the Bill ought to be postponed. All the clauses affected, more or less, some interest or another, and it was scarcely likely that any of them would pass without discussion.

§ MR. AGLIONBY
said, that as almost every clause in the Bill seemed to bear hardly upon the landed interest, except that now before the Committee, which gave great relief to copyholders, he must, confess that he would not like progress to be reported until they had decided upon this clause.