SUCCESSION DUTY BILL. (Hansard, 4 July 1853)

§ MR. WALPOLE
said, he would suggest, that it would be more convenient in all cases to have the amount of the tax deducted out of that which was personal property in the first instance; and he would, therefore, beg to propose the substitution of "may" for "shall" in the concluding portion of the clause to which his objection applied.

§ The CHANCELLOR OF THE EXCHEQUER
said, that the right hon. Gentleman seemed to understand that the charge in the case which suggested the objection, was held hanging over the head of a successor till the investment in land had taken 1168 effect, and was then exacted in the form laid down; but there was no such intention as that the charge should be hung up. The whole meaning of the clause was, that the interest of the successor in the property should be ascertained in the same manner as if were real property—that was, it should be charged on his life interest.

§ MR. WALPOLE
said, that by this clause it was provided that no allowance should be made in respect to any encumbrance created or incurred by a successor, whether by appointment or otherwise. Now, as the clause was retrospective as it stood, he conceived that in cases where creditors were concerned especially, its operation would be attended with great injustice. He suggested, therefore, with the view of making it prospective instead of retrospective, that the words "after the passing of this Act," should be inserted after the words "created or incurred by a Successor."

The SOLICITOR GENERAL
said, he understood the right hon. Gentleman to mean, that whenever a successor should have anticipated his interest by a special charge, though he had received already the benefit of a great part of the interest to which he was entitled, he should be relieved of the duty attached to inheritance to the extent of the money by which he had anticipated that inheritance. The cases to which the right hon. Gentleman had referred were met by the 14th clause, which had already been passed. To adopt the suggestion of the right hon. Gentleman, would, in point of, fact, be to deprive the Bill of its operation.

§ MR. WALPOLE
said, has must say, that, if the clause were passed in its present shape, it would be the greatest act of injustice done to creditors by legislation 1169 that he had ever witnessed; he must, therefore, press the introduction of the word he had intimated. Suppose a man, a stranger in blood, was entitled under a settlement to a reversionary interest of 10,000l.; the duty he would have to pay on that settled reversionary interest would, according to this Bill, amount to 1,000l. Twenty years ago he sold that reversionary interest for 8,000l., or whatever might be its value at the time. Well, this Bill comes into operation. The creditor succeeds nominally to the 10,000l., but he would actually have deducted 1,000l. from the security, in the shape of a succession tax, by the retrospective operation of this clause.

§ MR. MULLINGS
said, he also opposed the clause, and he fully coincided in the opinion expressed by the right hon. Gentleman (Mr. Walpole), that it was contrary to all rules and principles of equity without notice to deprive individuals of rights to which they were entitled. If the Bill were to pass in its present shape, it would be the grossest act of injustice that he had ever witnessed in the whole course of his professional experience.

The SOLICITOR GENERAL
By the 14th clause, as he had previously stated, it would be seen that, where there had been an alienation or assignment of property antecedently to the Act coming into operation, then the person becoming alienee, or purchaser, would have to pay the duty. Where the encumbrance was created subsequently to the Act coming into operation, then the successor would have to pay it, because he would have the benefit of the charge.

§ MR. WALPOLE
said, the remarks of the hon. and learned Gentleman just confirmed his observation, that when he came into possession the alienee was to pay the duty which the person entitled to the succession would have to pay had he made no alienation. If the reversionary interest was absorbed in the amount of security which the creditor had taken, he would have to pay that duty which the successor would have to pay had there been no charge created.

§ MR. HENLEY
said, the result of the clause was this—if a man sold all his interest, he would pay nothing; but if he sold or alienated three-fourths, he would have to pay on the whole. He regarded this as a very great straining of the law.

§ MR. J. PHILLIMORE
said, he would 1170 suggest that the clause should be reconsidered.

The SOLICITOR GENERAL
said, that the 14th clause had been passed without complaint, which enacted that an alienee, or purchaser, should stand in the shoes of the vendor or alienor. This clause mot the case, but the Amendment really went against the whole principle of the Bill. Pass the Amendment, and the operation of the Bill would be postponed indefinitely, or, at least, they would have to wait for any benefit from it for another generation.

§ MR. WALPOLE
said, he could not assent to that construction of his Amendment. His object was to make a distinction between charges and incumbrances created before the passing of this Bill, and charges and incumbrances created after. He agreed that in the case of those created subsequently to the passing of the Bill, where the successor had the benefit of the charge, it was reasonable that no allowance should be made in respect thereof; but where the charge was created prior to the passing of the Bill, the successor derived no benefit from it at all. The injury in the case he had supposed was not to the successor, but to the creditor. The hon. and learned Solicitor General had referred the Committee to the 14th clause; but that clause related to alienations, the one under discussion to mortgages or incumbrances. And if the clause were altered in the manner he had suggested, it would not in the least interfere with the principle of the Bill. He objected to the clause on the ground that it affected the security of the creditor. For, suppose a reversionary interest in the equity of redemption of land was mortgaged by the person entitled thereto to the extent of its full value, the effect of the clause as it stood would be that when the reversionary interest became an interest in possession, the person who took it in the character of a mortgagee, having previously given the full value for it, would be also required to pay in addition to that a duty of 10 per cent. It was for that reason, then, he contended that the operation of the clause would be unjust.

§ The CHANCELLOR OF THE EXCHEQUER
said, the 14th clause met the case of the alienee. And the case dwelt upon by his right hon. Friend (Mr. Walpole) was that of a mortgagee, where the succession had been mortgaged up to its full value, and the mortgagee took possession in order 1171 to recover the amount of the debt. If that were the view of his right hon. Friend, it appeared to him (the Chancellor of the Exchequer) that he ought to have exercised himself in framing a provision to meet the case of the mortgagee.

§ MR. WALPOLE
That would he done by the insertion of the words he had suggested.

§ The CHANCELLOR OF THE EXCHEQUER
He must object to that view of the Amendment; instead of it, his right hon. Friend proposed the insertion of words which would exempt from the operation of the Bill all incumbrances created or incurred by a successor prior to the time appointed for the commencement of the Act. Consequently, he would not only exempt the mortgagee, but succession in regard to incumbrances. The clause as it stood was precisely analogous to preceding legislation. His right hon. Friend said, however, that it affected the security of the creditor. But when they passed the income tax, did they affect the security of the creditor? Did they affect his security when they renewed that Act? Or did they affect it when that Act was again passed a few days ago? The fact was, that the principle of the clause was exactly the same as that on which they passed the Income Tax Act.

§ MR. MULLINGS
said, that when the 14th clause was before the Committee, he objected to it on grounds similar to those taken by his right hon. Friend (Mr. Walpole) against the present clause, and the right hon. Gentleman (the Chancellor of the Exchequer) promised to reconsider it. He would now move, as an Amendment, that the words "after the time appointed for the commencement of this Act" be added to the clause under consideration.

§ MR. MALINS
said, he should support the Amendment. The principle of the law was, that a man should pay on what he came into. By the clause he would have to pay on what he did not inherit.

§ VISCOUNT MONCK
said, he should oppose the Amendment. The House had already decided that the person succeeding should pay succession duty on the full value of the inheritance. The mortgagee would be only placed in a similar position. 1172 The House had already sanctioned the principle of the clause.

§ MR. HENLEY
said, he would suggest the case of a son joining his father in borrowing 30,000l. Upon the father's death he would have to pay the duty, though he would have derived no benefit from the incumbrance.

MR. HEADLAM
said, the man who would practically have to pay was not the mortgagee, but his successor. A good deal had been said about persons who were parties to incumbrances before they came into possession of an estate being called on to pay; but why should men escape payment merely because they had incurred debts? He did not think there was any hardship in taxing a successor upon the whole amount of the succession—say 10,000l.—even supposing he had borrowed 5,000l., and spent it, because he would acquire the beneficial interest of 10,000l., being discharged from the incumbrance he had created. If the Amendment were adopted, it would interfere with the whole principle of the Bill.

§ SIR JOHN PAKINGTON
said, he considered that the question whether the Amendment was founded upon justice, was more important than whether it would interfere with the principle of the Bill. He contended that it was founded on the strictest justice. In the case of property encumbered nearly to its full value, the tax was made a first charge, and must be paid before the mortgagee could realise his security. Though in point of form the successor would pay the duty, it would in fact come out of the pocket of the mortgagee, who had had no notice of such a claim, and could not, by limiting his advances, have guarded against it. A son joining his father in raising money—not an uncommon case—on the property, would, as the clause stood, pay succession tax on the sums in which he had so joined, and from which he had derived no benefit. Those were cases of gross injustice, and ought to be provided for by an alteration of the clause.

§ MR. MALINS
said, that it would be in the highest degree unjust to tax a man upon that which he did not receive. A case might occur in which a son, after having joined his father in an incumbrance, would enter upon the nominal possession of 100,000l. a year, whereas he might not receive more than 10,000l. or 1,000l. a year. Would it be justifiable in such a 1173 case to tax him upon the whole of his nominal revenue?

§ The CHANCELLOR OF THE EXCHEQUER
said, if the hon. and learned Gentleman would undertake to provide an assembly of human legislators with the means of so framing laws that they could in every case digest the operation of each provision according to the moral excellence or the demerit of the transaction to which it applied, he should be happy to meet the hon. and learned Gentleman, and make any amendment in this Bill. But they could only proceed on broad, clear, simple and intelligible rules; and, proceeding on such rules, the provision in the clause as it stood was not only conformable to precedent, but far more conformable to justice. Could anything be more exceptional than the case instanced? It was one case in a hundred. It was the case of money thrown away by an incumbrancer; and, if not an exceptional case, tended to prove that there was a great tendency among the higher classes to live beyond their means. But were they to legislate with tenderness in relation to such cases? The hon. and learned Gentleman might think that those who acceded to the tendency ought to have special favourfrom the Legislature; but he was of a different opinion. The doctrine was that allowance should be made for incumbrances prior to the passing of this Act. Suppose the case of a man who had raised money on his personal security. [Mr. MALINS: They cannot get it.] They did get it. It was notorious they got it; but not to so large an amount. What did it signify whether, on coming into the succession, the successor owed 10,000l. on mortgage, or 10,000l. to his banker, who had advanced the money on personal security only, knowing that he was heir to the property—would they provide for one of those cases, and not for the other? Would they make an exemption for those who displayed the greatest desire for money which they did not possess, and show no consideration for those who raised more moderate sums on personal security? If they wished to be consistent, they must carry the principle further, and enact that all incumbrances whatever antecedent to coming into the succession should be legitimate ground for deduction; and what would be the justice of such a proposition he left it to the hon. and learned Gentleman to judge.

§ MR. MALINS
said, it was very uncommon for a man with landed property to get money on mere personal security, and the 1174 cases were so few, he should be quite content to let them take their chance. To meet the justice of all cases was out of the question; but he had pointed out a case which every gentleman knew existed; and by an ex post facto law to charge a man succession duty on a vast estate which by undue influence he had passed away, could be characterised as nothing less than a monstrous injustice.

§ MR. HENLEY
said, he would instance the case of a' man owing 10,000l. and succeeding to property, being only required to pay probate and legacy duty on the residue after discharging his debts.

§ The CHANCELLOR OF THE EXCHEQUER
said, he must remind the right hon. Gentleman there was no such case; that legacy duty was paid regardless of the successor's debts, the deductions being only on the debts of the testator.

§ MR. HENLEY
said, the case of the right hon. Gentleman rested on a narrow basis. It was unjust to make a man pay on that to which he did not succeed.

§ MR. BARROW
said, the question was, whether a man was to pay two taxes upon an estate, or one.

§ MR. WALPOLE
said, he must call upon the Committee to take care of what it did in making a person pay a tax upon what he never inherited. He considered that the cases which had been offered as illustrative of the question, were exceptional cases, not the rule. By the operation of this cause, creditors would be deprived of their security, and successors would be taxed for that which they might never receive. He felt so strongly and so deeply the gross injustice of the contemplated proceeding, that he challenged the right hon. and learned Gentlemen opposite, even after the vote that had just been given, to say whether they would still adhere to the clause, the injustice of which he had described not in colours too strong.

§ The CHANCELLOR OF THE EXCHEQUER
said, he did not know whether the right hon. Gentleman was irregular in his remarks in insisting on the resumption of a debate on a point already rejected by the Committee, or whether he was out of order in rising to notice them. He should, however, make a formal Motion in order that he might say a few words. He should, therefore, more that the clause stand part 1175 of the Bill. The course of the right hon. Gentleman was certainly irregular, because the Amendment having already been rejected by the Committee, the purpose of the right hon. Gentleman was by an indirect mode to procure a resumption of the debate. It was no use having rules for the guidance of that House unless they were adhered to; for when parties were defeated by a division, they should acquiesce in their defeat until a legitimate opportunity occurred of reviving the question. In the present case the Amendment had a general operation. It not only covered particular classes of cases to which reference had been made, but it took in other cases of quite a different character. The right hon. Gentleman had been invited to frame a clause to meet his object; but he preferred to bring forward an Amendment of a general character, which Amendment it was his (the Chancellor of the Exchequer's) duty to oppose, not only because it would have been unjust in its operation, but because it was opposed to the principle of the Bill. He would not at that time enter into the matter, but he would challenge the right hon. Gentleman to make good the proposition he had incautiously let drop, that in passing taxing Bills they were to be considered to have only a prospective operation. In reply to that he would merely say that Customs and Excise Bills had generally a retroactive operation. He had now answered the right hon. Gentleman as far as the rules of that House would permit. To meet an objection raised on a former evening by the right hon. Baronet the Member for Droitwich, he proposed to insert after the words "an allowance shall be made in respect of all other incumbrances," the following words:— And also in respect of any money which the successor may have previously to his succession laid out in substantial repairs, or in the permanent improvement of the real property comprised in his succession.

§ SIR JOHN PAKINGTON
said, that the words would quite meet the cases he had pointed out. He would now say a word or two in reference to the right hon. Gentleman's remarks on what had fallen from his (Sir J. Pakington's) right hon. Friend (Mr. Walpole) who had been challenged to show that taxing bills had only a retrospective effect. The right hon. Gentleman the Chancellor of the Exchequer was right as to the letter, hut his right hon. Friend was right as the spirit of the 1176 law. It was true that Customs and Excise Bills wore partially retroactive, for they generally went back a few months or so; but that was very different from this Bill, which went back four years, and thus became really an ex post facto law.

§ MR. PHILIPPS
said, he must beg to express a hope that means would be adopted to make the Commissioners more liberal in their conduct in cases of repayment where too much duty had been paid to them.

§ MR. HADFIELD
said, it was derogatory to the character of the Government to allow the illiberal practice of compelling parties administering to an estate to pay the amount of duty without the debts having been first deducted, especially when the difficulty of getting the overplus back was so great.

§ The CHANCELLOR OF THE EXCHEQUER
said, the objection of the hon. Member for Sheffield (Mr. Hadfield) and of the hon. Member for Haverford west (Mr. Philipps) applied to the Probate Duties Bill, and not to the present. It was impossible for him in the present Session to undertake the reform of the probate duties; but whenever it was undertaken, he thought the House would find the reform would lead to the diminution of the duty, and not an increase, and that there would consequently be a loss to the revenue, The repayment of duty was always a difficult and vexatious matter, and it was absolutely necessary to fence it about with careful restrictions. The true principle was, to make those repayments as rare as possible, and upon that principle this Bill proceeded.

§ MR. MULLINGS
moved the insertion of the words "simple contract," with the view of making the duty not a Crown debt, but one of simple contract.

The SOLICITOR GENERAL
said, he thought the hon. Member would gain no- 1177 thing by the insertion of the words, because the remedy for enforcing payment of the duty due to the Crown would remain precisely the same, if the words were inserted as it now was.

§ MR. G. BUTT
said, he must complain of the clause, which, he contended, would operate injuriously on property.

§ MR. HENLEY
said, the present claus and the forty-third must be considered together. No doubt the Crown ought to have a remedy in the first instance against the property, and therefore it would be proper to give a remedy against the party in enjoyment of the property. But care ought to be taken not to affect persons in the position of trustees, who had little or nothing to do with the property. In the cutting down of timber, and many other cases, there would be a continual liability. He trusted the Government would place the matter on a more satisfactory footing, and limit the tax in such a way as not to embarrass trustees in dealing with property.

The SOLICITOR GENERAL
said, there would be great difficulty in introducing words rendering trustees liable only to the extent of the property actually received by them. Power was given to a successor to pay off the whole debt at once, in return for which he would receive a certain discount.

§ SIR W. JOLLIFFE
said, he objected to the clause, which, he contended, would completely change our social relations with regard to trustees and persons undertaking the charge of property. It would oblige persons to sell property, and disable them from making a title.

§ The CHANCELLOR OF THE EXCHEQUER
said, that if the debt was not made a tax on the property, it would be placed on a different footing from any other tax.

§ MR. MULLINGS
said, as there was an express charge on the amount of succession, he did not see why the party should be made a specialty debtor, and prevented from selling a portion of his property until he had paid the Crown duty. If the words which he had proposed should be inserted, every security would be given which the Crown could desire. His proposition did not at all interfere with the charge on the successor.

The SOLICITOR GENERAL
said, this duty when due to the Crown would not affect any lands, whether they were the lands of the successor in respect of 1178 which the duty was paid, or whether, they were other lands, until the debt should be entered in conformity with the Statute. But it was quite right that the money going to the successor should affect the whole of the property until the debt was paid. It would not affect the mode of discharging the debt, provided the successor should be desirous of selling or mortgaging a portion of his land.

§ SIR FITZROY KELLY
said, he must complain that the effect of the clause as it stood would be to charge the duty, not only on the lands to which the charge properly attached, but to all lands whatever in which the successor, however slightly, was interested. He thought it was sufficient that the duty should be charged upon the lands only to which it attached, and that other lands should be exempted.

§ The CHANCELLOR OF THE EXCHEQUER
said, the operation of this clause would be to place a debt in respect to the succession duty on precisely the same footing with every other debt which a person was liable to pay. Was it the opinion of the hon. and learned Gentleman that there ought to be one kind of debt due to the Crown in respect of the succession duty, and another debt due to the Crown in respect of all other taxes? It appeared to him that the only just course to take was to place this duty on the same ground as all other duties.

§ SIR JOHN TROLLOPE
said, the right hon. Gentleman was himself establishing a new set of Crown debtors, which did not before exist. Under the legacy duty they attached the property; in the present case they also attached the property, and that however extended or however limited it might be. The consequence as regarded real property would be that they would put an effectual bar upon the sale of real property if this charge were once registered as a debt due to the Crown. The hon. and learned Solicitor General said they would get rid of the charge by paying the debt. But a small proprietor could in many cases only pay the debt by selling the estate, while this Act would operate as an effectual bar to the sale.

§ The CHANCELLOR OF THE EXCHEQUER
said, under the legacy duty the charge on personal property attached the whole property of which a party might be possessed, and this clause only enacted the same principle with respect to real property.

§ MR. MALINS
said, he wished to state 1179 that personal property was generally conveyed through the hands of trustees, and before the amount was handed over to the successor the legacy duty was deducted. But it was not so with regard to real estate. In making the duty a first charge upon the estate, however, the Chancellor of the Exchequer had a security which was upon an average fifty times the value of the debt; and yet, not satisfied with that, the right hon. Gentleman sought to make it a further charge upon all the lands which a successor might hold, thereby introducing a new inconvenience into the succession and transfer of real property which did not before exist. The tax was odious enough already, and there was no need for making it more disagreeable than the security of the duty demanded; but the Chancellor of the Exchequer exhibited as much tenacity for these clauses as if he had spent the last ten years of his life in drawing them out, and had become enamoured of every word.

§ MR. W. WILLIAMS
ridiculed the hardships which hon. Gentlemen opposite were conjuring up. Why, an estate of 70.000l. a year would only on an average pay 100l. under this tax, and the successor would have four and a half years to pay it in. He thought hon. Gentlemen opposite were already too well cared for.

The SOLICITOR GENERAL
said, he must point out that the Amendments proposed would not remedy the inconvenience complained of; and he proposed that without altering the clause the following proviso should be added, which would meet, he thought, the views of hon. Gentlemen:—"But such duty shall not charge or affect any other property of the successor than the real property comprised in such succession."

The SOLICITOR GENERAL
said, that in consequence of the observations made on a former evening he had directed his attention to this subject. He proposed to insert the word "personally" before the words "accountable in respect of any succession," and to omit the words "or with their concurrence." He also proposed to insert the words "wilful default." The effect of these alterations would be to make the trustees personally liable, and limit 1180 their liability to property actually received, or which might be received by them. The liability of the trustee under this clause would now be the same as that of an executor or administrator, which was limited to the extent of the property which he actually received to answer to the legacy duty.

§ MR. WALPOLE
said, that his objection to this clause was, that the operation of the new law would destroy the system of trusts in this country. He denied that the case of the trustee under this Act would resemble that of the executor, who was now liable to legacy duty. If a man now died possessed of property, he left an executor or administrator. The property was easily ascertained; the executor or administrator became the sole owner, the persons who were responsible were known, and the duty was paid down at the time in all cases except where property was given to one person for life and to another in succession, and then time was given for the payment of the duty. But nothing was so much complained of as the deferred payment of duty in respect of personal property taken in succession. In the case, however, of succession duty payable under this Act, how were they to ascertain who was to come to the property? How were they to find out who was the accounting party? In many cases it would be hard to know the value of the property in respect of which duty was to be paid, or who were the persons to account for it, or the property to be accounted for; and when the persons to account and the property were discovered, it would sometimes be difficult to find who were the successors. In the case of a settled realty or personalty loft to a person, with remainder to others, part upon lease and part charged with jointures, the trustees would be bound to account whenever any charge fell in, when any leases fell in; in fact, the trustee would, under this system, be an accounting party all his life. The property would thus be perpetually the subject of account to the Exchequer. A mortgage, as he called this tax, would be placed on all the property in the kingdom, to be perpetually paid off and perpetually renewed. By the working of this Bill, under the 48th clause, the Commissioners appointed to levy and assess this tax would have to examine the parties who were called accountable parties, and, if necessary, to search into their papers and documents; but such a course of proceeding could only' be adopted when it 1181 was discovered who the accountable parties were; and, even then, it appeared to him that the system would be found so oppressive that it would not be possible to continue it. Trustees were bound under penalties to account, and that would fall very heavily upon them. Suppose the case of a person dying with property of different descriptions in different parts of the kingdom, and with trustees, one for one portion of the property and another for another, living in different parts of the kingdom. Now these parties would be accountable at the time that the duty became payable, and every trustee would have to find whether he was accountable or not, also the condition of the property and every atom of accountable duty in respect of additional value. He would ask, was it at all probable that in future any person would be induced to accept a trust under a system productive of such great inconvenience? The operation of this Act would be found so oppressive that persons would throw up the trust, and decline ever again accepting another, or they would be driven to put it into the hands of a solicitor, who would have to pay the duties as they became due; so that in addition to the tax the operation of this Bill would be to compel persons to incur a lawyer's bill for a series of years, to which no one could see an end, or else to put a stop to the present system of trusts in this country. The hon. Member for Lambeth (Mr. W. Williams) appeared to think that this measure pressed most upon the large holders of real property; but in point of fact it was the poorer landed proprietors, the "statesmen," as they were called in Westmoreland and Cumberland, the coparcenors in Lincolnshire, or yeomen in the southern counties, on whom this tax would fall most severely. They would have all the vexation and the increased expense, and the Committee might be satisfied that it was not the rich landed proprietors who would be the real sufferers, but the hardworking portion of the agricultural body. With regard to personalty, one-half of the property in the funds was held in trust, and there were 280,000 persons receiving dividends, out of which number 250,000 received dividends under 150l. a year, of which property half was held in trust, so that now persons would have to pay this tax with a less amount of income than would fall under the operation of the income tax; or, in other words, the capital of persons producing too small an income to be liable to the income tax, would be taxed 1182 by this measure. They were, in fact, by the operation of this Bill, taxing the capital of a person's property while they would not venture to tax his income. Unless they could find some mode of protecting a trustee from all the liabilities to which he would be subject, and unless the tax was paid when it fell due, one of two things would happen—either the trust would be flung up and their trust system destroyed, or, if that did not take place, an enormous amount of lawyers' bills would be run up in attempts to relieve trustees of those liabilities. He would, under those circumstances, suggest, though he had little hope that it would altogether obviate the objection he had to the clause, that they should in all cases tax the person who was the beneficial recipient of the profits of any succession, and not in any case the mere trustee. The measure seemed to him to be one of a very objectionable character, and he pointed out what appeared to him to be serious inconveniences, with a sincere desire that the Government would take the matter into consideration, and with a belief that if alterations were not introduced, in ten years from that time its operation would be found so vexatious, that, however popular it might seem now to carry this measure, it would then be looked upon as most oppressive.

§ MR. W. WILLIAMS
said, he thought that the difficulty entertained by the right hon. Gentleman might be removed on a common principle of mercantile transactions. He objected to the system of allowing four years and a half credit for payment of succession duty on land, while that upon personalty was to be paid within twenty-one days under certain fixed penalties. If, however, the House were determined to bestow the advantage of four years and a half credit on successions to realty, he imagined that the objection of the right hon. Gentleman could be removed by the introduction of a common principle. All commercial transactions in this country were based upon a system of credit; but it was always understood that if a person paid ready money he received discount. Now that principle could be easily applied to the present case. If a person had the choice of paying ready money and receiving a reduction, instead of being compelled to extend the payment over a term of years, it seemed to him that the difficulty would be removed with regard to the "statesmen" of Westmoreland and Cumberland. He did not consider that the tax would fall upon them with any peculiar hardship. A man 1183 possessing an estate worth 1,000l., was quite able to pay the duty imposed by this Bill.

§ The CHANCELLOR OF THE EXCHEQUER
said, that if all the evils anticipated by the right hon. Gentleman (Mr. Walpole) were to attend the working of this Bill, they would bring their own cure, for they would infallibly lead to its repeal; but he did not think any good or valid ground had been shown for these apprehensions. The right hon. Gentleman had certainly shown that difficulties attached to the working of that Bill which did not attach to a legacy duty, imposed as it was upon property of which they became cognisant through the medium of wills and administrations. It was quite true that in this case they did not know the persons who were to account for the property, nor those who were to enjoy the property. The question whether the machinery of this Bill was sufficient, and whether, if sufficient, it was harsh, might arise more properly under the subsequent clauses. There were two methods, either of which Parliament might adopt. They might go upon one or more of the parties connected with the property, and get at the nature and amount of the succession through the medium of those parties; or they might look to the property, and lay the tax upon it, leaving the persons to show themselves or not, as they pleased. They followed the first plan with respect to the legacy duty—the second with respect to the income tax, speaking generally; for in general they had no occasion to call upon persons for returns, but they looked to the property, in many instances taking no cognisance whatever of the owners. Under the present Bill they would not adopt the latter course. As to certain descriptions of property, in the income tax, they were obliged to go to individuals and call on them for returns; and that would have been the case in the succession duty, if they had adopted that principle. But it would not have been wise or equitable to adopt that principle in regard to those great matters of property which it was in their power to get at, especially all real and visible property, the funds and public securities and shares in public companies. Had they adopted that course of proceeding, and gone upon the property, the assessment must, in the first instance, have been made upon the gross value, irrespective of in cumbrances and irrespective of divisions of interests. An assessment upon the gross value was liable to this great and fatal objection; it would have been necessary to have a system of minute 1184 investigation, and of return of duty, fenced about with all the jealous hindrances that were required to secure the revenue in cases where a return of duty was sought. In the case of a person dying possessed of estates in different counties, besides personalty, debts, &c, it might be said, that, as the estates were known to be his property, the tax might be levied from the occupiers, giving them power to deduct, as under the income tax. But, had they taken that course, they would have obliged the person succeeding to that property, even if it were an undivided succession, to come to London to exhibit the state of his affairs, to state the deductions he claimed, and the incumbrances affecting the property, and then to get his returns as he could. It was perfectly plain that that process would have been a most vexatious one, and would have ended, as it did in the income tax, in levying a larger percentage than the tax nominally and professedly imposed. But if they were not to go directly upon the property, to whom were they to go? The right hon. Gentleman had almost answered his own suggestion of going to the successor; for he said they did not know the successor; and though in many cases they might know the principal successor, still they might not know the subordinate successors, or those taking subordinate interests, or even indedendent interests. Generally speaking, there was but one person who would he cognisant of all the successions and all the parties—the trustee or trustees; they were the only parties who could be looked to as being in possession of complete knowledge of the successors who were to take beneficial interests. The successor under a settlement might know nothing of that document; it was not ordinarily in his possession or command. They followed the analogy of the Legacy Duty Act, and trustees under settlement would occupy the same position as trustees under testamentary disposition. So much with respect to the question of whether they should go upon the property or on the persons connected with it in some way or other. Then, with respect to the other objection, that the case of trustees would be one of so much anxiety, responsibility, and liability, that no one would be found to undertake the duty, he did not think that the burden thrown upon trustees by this Bill would be greater than it was under laws already imposed. Indeed, trustees under this clause would have less responsibility than they had under existing laws. With regard to the small 1185 holders in the funds, they were secured already; and it was only the large ones who might devise the means of escaping the tax. With regard to trustees to landed settlements, they would he placed in a more favourable position than were trustees now under the Legacy Duty Act. The great bulk of trusts created under landed settlement were trusts for uses—that was to say, trusts with regard to which the trustees to settled estates had no power to raise money or receive rents; and if they had no power to receive rents, their liability under the clause would be very light indeed. If so, the dangers suggested by the right hon. Member for Midhurst were quite imaginary. The clause assimilated the case of the trustees to settled property to that of trustees under the Legacy Duty Act; and where they differed, the difference was in favour of trustees to settled property.

§ MR. BARROW
said, that being a trustee himself, and knowing the difference between trusteeship of real property and executorship under a will, where the legacy duty could be paid without any difficulty, he must protest against the injustice which by an ex post facto law rendered trustees responsible in the manner proposed—that was to say, responsible for penalties accruing month by month, and day by day, in cases in which it was impossible they could be aware of their liability. He was satisfied that no justice could be done except by taking the course which the right hon. Gentleman (Mr. Walpole) had suggested, and giving up the idea of making existing trustees responsible at all under this Bill. Unless they really anticipated that the abundance of successions was to be such as to exhaust the property altogether, why would not the property be sufficient without involving in the liability the parties who happened to be trustees? He wished he could console himself with the hint thrown out by the right hon. Gentleman, that trustees would throw up their trusts. He feared, however, that they would not be able to get the trusts off their hands; and, under these circumstances, he should vote against the clause.

§ MR. MALINS
said, he thought it should be a part of the functions of the trustees to pay this duty over to the Crown; but it was of importance that greater responsibility should not be thrown upon them than as necessary. He would suggest, therefore that the trustees should be made an- 1186 swerable only for the money which was actually received or disposed of by them.

The SOLICITOR GENERAL
said, that the clause, as worded, was to be prospective in its operation. It was only intended that the amount of trust property actually possessed by, and actually passing through the hands of, trustees, should impose upon them, as they received the property with one hand, the obligation of paying the duty with the other.

§ MR. HENLEY
said, he wished to know, if, in case it became difficult to ascertain what was the exact sum which an inheritor ought to be called upon to pay, and that being willing, therefore, to commute the tax for a fixed sum, if he should raise money for such a purpose, would the consequent mortgage take precedency of all the other charges?

The SOLICITOR GENERAL
Of course it could not take priority of charges which descended to the inheritor as in cumbrances.

§ MR. MULLINGS
said, he had an Amendment which he wished to propose to this clause. The fact was, if there was a right of appeal supposed by the clause, it must turn out quite nugatory to the case of all small proprietors. He knew a case where a farmer had left 100l. to be divided amongst the poor of his district, which would amount on distribution to 17s. for each family. However, the Commissioners had stepped in, and diminished the bequest by 10l., which they had no right whatever to do, and though every effort was made to obtain redress, yet nothing could be ever effected against the dictum of the Commissioners.

§ The CHANCELLOR OF THE EXCHEQUER
said, if the words were struck out, no hold whatever could be had on inheritors against giving in a wrong estimate. Under the clause, the whole proceedings were subject to an appeal, and the only proper question to be raised was, whether effectual provision had been made for that appeal.

§ MR. HENLEY
said, he thought that any appeal at all would be most difficult.

§ SIR JOHN PAKINGTON
said, he thought they should receive more explanation respecting this clause. It was a clause upon which he looked with great alarm, and which would operate most oppressively upon the whole of the country. He wished to know how the small proprietors with incomes under 150l. and 200l. a year, were to proceed under this clause? It seemed to him that there could he no greater delusion than that put forward by the hon. Member for Lambeth (Mr. W. Williams), that the wealthier classes would alone be affected by this Bill. Now, he (Sir J. Pakington), on the contrary, regarded it as a Bill essentially burdening the comparatively humble classes—the small proprietors of the country. Why, what son or what brother amongst our small holders of property would be willing to I face all the difficulties of this clause? In addition to the burden of the tax itself, they were inevitably imposing another and more serious one in the shape of law expenses and lawyers bills, which must devolve upon every small proprietor who paid succession duties. He felt that they ought to have from the right hon. Gentleman the Chancellor of the Exchequer something more definite as to the party by whom the expenses attendant on all these proceedings was to be borne. Looking to the humbler classes it was impossible to deny that there would be an immense temptation in their way to send in a return of the smallest possible amount. That would involve a constant struggle between those small proprietors on succession to their holdings, and the officers of the Stamp Office. In many instances, he admitted, it would be inconsistent with the duty of those officers to accept the estimates that would probably be sent to them, and they must cause an estimate to be taken by any person or persons they chose. Now, surely, they might expect to have some explanation as to who was to bear all the expense of the consequent appeals to the Court of Exchequer.

§ The CHANCELLOR OF THE EXCHEQUER
said, he thought the right hon. Gentleman must forget that the holders of leases for years were at present liable to this tax, and also to the probate duty, which was a more cruel tax, because it was a tax which the party was obliged to pay on the gross amount of the inheritance, and afterwards get repayment as he could. He was not going to repeat the 1188 same severity in the provisions of this Bill as regarded freeholders. He put them under infinitely more favourable circumstances than those under which the leaseholders had been obliged to remain without any person to vindicate their cause. If the appeal to the Court of Exchequer was deemed unsatisfactory, he was ready to consider, with Gentlemen opposite, how they could make the appeal more satisfactory for the relief of the parties. But the question here was not as to the appeal at all, but as to whether they should have power to call upon the parties for an account; and in the event of their rendering an account that was unsatisfactory, and the Government officials causing necessarily another account to be made, and the parties not appealing against the account, then there should be a discretion to charge them with a whole or part of the costs. That was not, he thought, a measure which deserved to be spoken of as it had been spoken of by the right hon. Gentleman.

§ MR. HENLEY
said, he, however, complained of the stringency of the clause, which made it compulsory on the party either to appeal or to pay. There might be a very trifling addition to the value. Suppose the return made were 1,000l., and the Commissioners valuer should say it was 1,000l. 5s. 6d., then the expenses must be paid by the party who was liable to the duty. It was very seldom that any two valuers could come to the same estimate. In that case the Commissioners would say, "We must have costs." He did not think that would be just. If the Commissioners chose to have a fresh valuation, let them have it, and let them pay the expense of it.

§ SIR THOMAS ACLAND
said, he begged to suggest that the charge of the revaluation by the Commissioners should not be made on the party unless the estimate returned by the party should be exceeded by the Commissioners valuer by 10 per cent. If the value returned were only exceeded by a small amount, he thought it would he rather hard that the par should he subject to be charged with the expense of a revaluation.

§ The CHANCELLOR OF THE EXCHEQUER
said, he was sorry to say he could not conscientiously accede to that Amendment. What they wanted was, not to make the party liable to render an account responsible for casual errors that lay be- 1189 yond the reach of ordinary prudence to avoid, hut to get an account from him that would he perfectly bonâ fide; that was the object of the clause. He did not think the mild and moderate working of the measure would depend so much upon what was done in that House, as the state of society in the country, and the whole tone of public opinion with respect to the case of abuse. Those who had read the Income Tax and Legacy Duty Acts could come to some conclusion as to what the course adopted would be. Where a party was chargeable with the want of a bonâ fide intention, or of common prudence, he would be liable to pay the expenses; but in another case he would not be liable.

§ SIR FITZROY KELLY
said, he desired to facilitate the very critical task which the right hon. Gentleman had undertaken, by so shaping the clause that it would give security for the protection of the revenue, and fall at the same time with as little severity as possible on those who would be affected by it. The clause required all persons accountable for the payment of the duty to make a return of their liability to duty. He thought it was not necessary to require all the parties to make such a return. In the first instance, not only the successor was called upon, but all the trustees and cestuique trusts were liable to duty. Now, the successor would not be liable; it would be the trustee; but here you called not only the successor, but all the trustees, to account for their liability. He begged to direct the attention of the Committee to the difficulty of making a perfectly accurate valuation, and to the hardship to which persons would be exposed by this clause by being put to great expense if they put on their property a valuation of which the Commissioners should not approve. Upon an account being delivered in, the Commissioners were empowered, if dissatisfied with it, to direct an account to be taken by persons appointed by themselves. Valuers of the Government would be men eminent in their profession, and therefore their charges would be extremely large and expensive; and if their valuation exceeded the valuation of the successor, though he might have estimated it bonâ fide, and to the best of his ability, the whole expense would be thrown on the successor. He took it for granted the Commissioners would have competent valuers, and if they were dissatisfied they might direct the valuers to like a report. On that report they might 1190 give notice to the successor stating the grounds why they were dissatisfied with his valuation; and if they could not agree amicably, then the Commissioners should have the power to surcharge, with an appeal to some competent and inexpensive tribunal, and if the Court of Appeal found the successor to be substantially right, he ought to be entitled against the Government to the expenses of the inquiry. He threw this out for the consideration of the right hon. Gentleman opposite; and if he did not mitigate the evils at some future stage, he should take the sense of the House upon the question.

§ The CHANCELLOR OF THE EXCHEQUER
said, he believed the party was perfectly secure in that respect. Surely it could not be supposed that there was such a wasteful, profligate, and absurd expenditure of public money that they would surcharge persons who had made a bonâ fide return in spite of correction; for, if there were such cases, the judgment of the Court of Appeal would prevent their recurrence. What was the provision of the law now in an analogous case? In the 22nd section of the 33rd Geo. III., the provision was, that if the Commissioners of Stamps were not satisfied with the valuation of the party, they might cause another valuation to be made; and if not appealed against, the duty would be paid according to such valuation; and if the duty assessed should exceed the duty offered and refused by the Commissioners, the expense of such appraisement should be borne by the persons by whom the duty was payable. That was precisely the case in question, where the valuation exceeded the duty offered to and refused by the Commissioners; and if the case was justified, this Bill provided that they might assess all charges on the party, subject to the review of an impartial tribunal.

§ MR. HENLEY
said, he did not think the case under the legacy duty was at all analogous, because the valuation of personal property was made by sworn appraisers, funded property by the price of funds at the time, and capital at the given sum. In those cases the parties could hardly make an improper return; but here the value of the property was indefinite, it not being stated whether it was the annual value or the fee-simple. The appeals to the income tax and assessed taxes had been cited; but in those cases the parties surcharged were not called on to pay the expenses of the appeals.

§ MR. PHILIPPS
said, he professed great horror of all valuations. They bore as near relation to the actual value as the eulogies on a tombstone to the real merits of the departed.

§ SIR FITZROY KELLY
reiterated his opinion of the injustice of charging the expenses of valuation, even though the party might be willing to pay the corrected amount demanded by the Government. He was at a loss to know where any precedent could be found for such a provision.

§ MR. MULLINGS
said, he objected that the clause did not sufficiently define the period after which, or the circumstances under which, the default to be punished by the infliction of this penalty should be understood to have taken place.

§ The CHANCELLOR OF THE EXCHEQUER
said, that he could not conceive a more distinct definition of the circumstances under which this default should be taken to have occurred than was contained in the 44th clause. That clause, it was true, did not define the period at which default should be taken to have occurred, hut it clearly defined the circumstances necessary to constitute it.

§ SIR FITZROY KELLY
said, he believed that so complicated and onerous were the requisitions made by this Bill, that if these clauses were retained in their present form, every man who was liable to pay succession duty for real estate would inevitably become liable to a penalty. He believed that this was one of the most tyrannical measures that were ever brought before that House.

§ SIR WILLIAM JOLLIFFE
said, it would be impossible in many cases to comply with the requirements of the clause in respect to the returns, and within the prescribed period. He hoped the right hon. Gentleman would postpone the clause.

§ MR. HENLEY
said, he fully concurred in the objection to the period within which the returns were to be made. He thought it was an unreasonably short time.

The SOLICITOR GENERAL
said, that a person liable to the payment of any duty on real property succession, would, in the first instance, have a twelvemonth in 1192 which to make a return of the sum to which he was liable. If he did not, he would be liable to a penalty. It would then be for the Commissioners to make their assessment, either accepting the return made to them, or making their own estimate. Then, if the party liable neglected to pay the duty within twenty-one days after the Commissioners had notified to him the assessment of the duty, he would be liable to a further penalty.

§ MR. HENLEY
said, the explanation, he feared, would not be that which would be given out of the House to the clause. He hoped, therefore, the hon. and learned Gentleman would introduce words which would have the effect of giving the interpretation to the clause which his explanation now favoured.

The SOLICITOR GENERAL
had no objection to reconsider the wording of the clause so as to meet the views of those who wished it to be made clearer.

§ MR. HENLEY
hoped the Government would consent to report progress.

§ The CHANCELLOR OF THE EXCHEQUER
hoped the right hon. Gentleman would not press his Motion, for at this period of the year it would be very inconvenient to abandon the discussion of important Bills at 12 o'clock.

§ SIR JOHN PAKINGTON
said, he would not object to go on if there were a prospect of concluding; but he did not think there was any. He wished to know if the same arrangement was to be persevered in with regard to the business of the week. The right hon. Gentleman had announced that the Committee on the India Bill would be taken on Thursday, and proceeded with de die in diem. He put it to the right hon. Gentleman whether great inconvenience would not arise from their having gone so far with this Bill as they had done, and then postponing it for an indefinite period.

§ The CHANCELLOR OF THE EXCHEQUER
said, he believed there was a prospect of going on with the Bill, as it would be his duty to propose, if it were not finished now, that the Bill should be taken at twelve o'clock to-morrow, when they would have the advantage of going on whilst their minds were still fresh upon the subject.

§ MR. HENLEY
said, he wished to re mind the right hon. Gentleman that severe important Bills had already been fixed for the morning sitting that day.

§ MR. DISRAELI
thought it was not a 1193 visable to proceed with, this Bill at a morning sitting, because they could not expect early in the day to have the advantage of the attendance of gentlemen of the long robe, whose opinions on such a measure were of great importance, especially as the Bill was of so peculiar a nature that in all probability it could not be criticised in detail in another place.

§ The CHANCELLOR OF THE EXCHEQUER
said, he quite agreed that this would be very desirable; but circumstances were stronger, and they could not expect to gain every object at this period of the Session, when public business so pressed.

§ SIR WILLIAM JOLLIFFE
said, he objected strongly to proceeding with the Bill to-morrow, for which other Bills were fixed, and when lawyers could not be present. There had been no desire to obstruct the Bill, but it was essential that it should be fairly discussed.

§ The CHANCELLOR OF THE EXCHEQUER
said, if the Committee would proceed with the rest of the Bill now, he would consent to postpone the timber clause, the only one likely to give rise to discussion, and bring it up at the end.

§ MR. DISRAELI
thought that if the Government would consent to take this Bill on Thursday instead of the India Bill, the arrangement would work much better.

§ The CHANCELLOR OF THE EXCHEQUER
said, it was impossible to take the vote on Thursday or Friday, and he could make no other suggestion than that which he had made.

§ SIR JOHN PAKINGTON
said, he would suggest that as it had been arranged that a debate on another subject should take place on Friday, the more convenient course would be to commence the consideration of the Government of India Bill in Committee on Monday, especially as the noble Lord (Lord John Russell) had expressed his intention to proceed with that measure de die in diem, and to resume the Committee on the Succession Bill on Thursday.

§ The CHANCELLOR OF THE EXCHEQUER
said, he had spoken to his right hon. Friend (Sir C. Wood), who was willing to make an arrangement for taking this Bill on Thursday. He (the Chancellor of the Exchequer) hoped, however, that the discussion of the Bill would be concluded on that day.

§ MR. BRIGHT
wished to know whether any other evening was fixed for the India Bill?

§ SIR CHARLES WOOD
replied, that 1194 the India Bill would still be allowed to stand for Thursday, giving the Succession Bill the preference. If the Succession Bill occupied all that evening, the India Bill would then be postponed till 5 o'clock on Monday, and would then go forward de die in diem.