§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a Second Time."
§ SIR JOHN PAKINGTON, said that it had been his intention to resist the second reading of the Bill, and to have moved the usual amendment that it should be read a second time that day six months, because entertaining strong objections to it upon principle, he had intended to have availed himself of this the proper opportunity for opposing it on principle. But after what had occurred, he did not intend to adopt that course. He found that, in consequence of the manner in which this Bill had been postponed, his friends on that side of the House—not being at all aware when it would come on—had not anticipated its discussion until the schedules were prepared, and were therefore not now ready to enter upon it. Having consulted several of his friends who desired to express their opinions on the principle of the Bill, he thought that it would not be convenient to take the discussion that night, but to allow the Bill to be read a second time without opposition, distinctly reserving to themselves the right to discuss the principle of the Bill on the Motion that the Speaker do leave the chair, in order that the House might go into Committee upon the measure. He hoped there would be no misunderstanding as to the day when that debate would come on—that they would have that fair notice of it to which the House was entitled, and that in the meantime the schedules would be printed and distributed.
§ The CHANCELLOR OF THE EXCHEQUERsaid, that he thought, after the statement of the right hon. Gentleman, it would be convenient to the House to commence the discussion which he had stated his intention to raise on going into Committee upon Monday next. He had only now to discharge a pledge which he had formerly given to the House, that he would on the second reading of the Bill state generally the proposals which Government intended to make with respect to corporate bodies. The Government were of opinion that, on the one hand, it was obviously just 1381 and right that if a succession tax was to be imposed on property passing from one private individual to another, it would not be just that the property of corporations, which enjoyed the same privileges and the same protection under the law, should be exempted from some corresponding payment. The question then arose in what way that payment should be made. Corporations never die, and if the Government had adopted the plan of imposing upon them a tax, assumed or calculated to be equivalent to a succession tax, once in twenty-five or thirty years, it would have been very difficult indeed to say when that cycle should begin. Corporations would have fairly objected to its being assumed that they all died on the coming into operation of this Act. Besides it seemed more convenient, as there was nothing analogous to succession in the case of corporations, to propose a commutation in the shape of an annual tax, instead of laying on one in the lump on the capital of the property. They had then to consider in what way it should be framed in reference to the question of amount; whether the commuted tax adapted to the continuous existence of corporations should be fixed as to its amount, on the assumption that the transmission of their property was analogous to the transmission of the property of individuals in the direct line, or to its transmission from one set of strangers to another, or to what intermediate case. The Government had thought it would not be fair to take either of the two extremes. They proposed that upon corporate property, speaking generally—for there were important qualifications to that statement—there should be ultimately laid an annual tax of 6d in the pound on the net revenue as an equivalent for the succession duty; but that for the period of seven years from the 5th of April last—inasmuch as it would not be fair to cause the duty to accrue fully from the period of the imposition of the succession duty, the tax should be 3d. in the pound; but that after the 5th of April, 1860, the rate should be 6d. in the pound. Then with respect to the various descriptions of corporations, they had to consider how far this tax ought to apply to these corporations universally—how far some should be exempted, and how far other bodies ought to be considered as corporations for the purposes of the succession tax. He would glance very briefly at the different classes of corporations. It was quite obvious, with respect to municipal corporations, 1382 that the House would act safely in adopting a rule corresponding with that which had been adopted in the Act imposing, the income tax—namely, the rule which considered as liable to the tax the realised property of corporations, but exempted from the tax such of the revenues of the corporation as were derived from rates and taxes laid upon the community. With respect to trading corporations, he did not consider that they fell within the purview of a plan of this kind at all. They were corporations to carry on business; the whole proprietary interest in them was divided into shares; it was represented in the form of individual property, and in that form was liable to the succession tax. They now came across a very large and a very miscellaneous class of corporations, which must be called charitable or eleemosynary corporations. This included the charities of the City of London, academic corporations, and schools and colleges and ecclesiastical corporations aggregate, and all these would be dealt with under the proposition of the Government in the same way, namely, under the rule he had already described, and would be subject to a tax of 3d. in the pound on their aggregate revenues for seven years, and would be taxed at the rate of 6d. in the pound thereafter, as an equivalent for the succession tax. He had alluded now briefly to all the important class of corporations aggregately, with the exception of one limited class, which was not of importance in a fiscal point of view, but which interested the feelings of many persons, and he might therefore refer to it specifically. He referred to religious corporations strictly so called, and benevolent societies which were supported in the main by annual donations or by the results of invested donations and subscriptions; and with respect to these they did not propose that they should be subject to the tax at all except in reference to such portion of their property as they might have derived from bequests, or as they might have been in possession of anterior to the commencement of the present century;—because nothing was more antagonistic to sound policy and repugnant to the feelings of the House and the country, than to lay upon the donations and contributions of living persons, which really represented the principle of charity in its full and free action, anything in the nature of a tax. The House showed a just disposition to draw a distinction between that which was done by men in their lifetime 1383 as an act of self-denial out of that which they would otherwise enjoy, and that which, though they were permitted by law to give, was in reality not their gift at all, but that which they took away from their natural heirs and successors, and which was usually called death-bed charity. He had now done with the question of corporations aggregate; but a question of considerable difficulty arose from the provisions of the law which recognised besides another description of corporations under the denomination of corporations sole. He believed they were exclusively—the exceptions were quite insignificant—and they were, in point of fact, the clergy of the country. The cases of the incumbents of all our parishes, and the bishops, were cases which it was desirable for them to consider as corporations sole. The question was, how they were to be regarded? Ought the provision which had been made for the support of those corporations sole to be considerate as corporate property, and made on that account liable to the tax, or ought it to be regarded as a provision made for the discharge of certain official duties? The two views with respect to the corporate character and the official character met at this particular point, and the whole question really turned upon this—would they say they were corporations according to the doctrine of law, and, excluding their official character, subject them to the tax; or, on the other hand, would they say their incomes were a mere provision for the discharge of official duties, and that therefore they should no more tax a clergyman on his accession to a rectory than they should tax any Judge in Westminster Hall on his accession to a Judgeship? The Government had considered the question, and their opinion was, decidedly, that the sound and fair view to adopt as the basis for legislation would be this—that the provision for the ecclesiastical offices, though regarded by law as corporations sole, ought to be regarded as a provision for the discharge of certain duties, and that therefore the acquisition of those offices ought not to be taxed as a succession. He might say there was anothor very good reason—rather in the nature of a grievance as it stood—why they should not be taxed as a succession, namely, the present provisions of the law which entailed a very heavy expense upon the accession to these offices. Whether on that ground, or on the general ground, he had no doubt the House would be of the same opinion as the Government, that the 1384 large portion of ecclesiastical property that was devoted to the support of corporations sole should not be considered property for taxation under the Bill which lay upon the table, any more than the income of the Lord Chancellor or the Chief Justice of the Queen's Bench, and that the two kinds of succession formed equally no matter for consideration in an Act of this kind. There was only one other point upon which he wished to remark. The Government proposed to tax corporations generally, making the Bill bear upon corporations aggregate, and excluding corporations sole. He had stated what would be the exceptions to the rule. He would now state, further, that there were certain other bodies or associations of men which, although not corporations in the view of the law, would yet be considered as corporations for the purposes of this Act—namely, combinations of trustees, under whatever name, who were the actual holders and administrators of property for uses of one kind or another, and through whose hands property was continuously transmitted without a change of hands by any succession upon them. The Government Bill would be so framed that those bodies of trustees would be regarded for the purpose of the Bill as being virtually corporations, and property in their hands would be treated as if it were the property of corporations.
§ SIR FITZROY KELLYsaid, the House would feel indebted to the right hon. Gentleman for the very explicit statement he had made with respect to corporate property. He wished, however, to ask the right hon. Gentleman two or. three questions on the subject: first, he should like to know whether the proposal for imposing this tax upon corporations would form a part of the Succession Duties Bill now before the House, or whether it would come before them as a separate and distinct measure; and, if it was intended to introduce the proposal into the present measure, at what stage of the Bill it would be most convenient to bring forward the clause? He wished to know, also, whether, among the corporations aggregate liable to this tax, the right hon. Gentleman included municipal corporations in general, which, as the right hon. Gentleman would be aware, were possessed of very considerable property, though now that property was applied to public purposes. The last question he would ask was, as to how this tax upon corporations was intended to affect the corporation of the city of London?
§ The CHANCELLOR OF THE EXCHEQUER, taking the questions of the hon. and learned Gentleman in the inverse order in which they had been put, would first state that, with respect to the corporation of the city of London, the Bill would not make any distinction between the case of the city of London and other municipal corporations. Upon the other question put by the hon. and learned Gentleman, he thought he had stated, with respect to municipal corporations, that they would be brought under the action of this plan much as they were under the Act for levying the income tax—that they would be liable to pay the tax upon their realised property, but not upon the revenue derived from their taxing powers. With respect to the third question of the hon. and learned Gentleman, the view of the Government was, that it-would be decidedly more convenient to deal with this subject in a separate Bill, because the whole of the present Bill was founded upon the one idea of succession in consequence of death. That idea was not applicable to corporations; any clause applying to them would assume a different form from the rest of the measure, and it would be therefore more convenient that the subject should be treated in a separate Bill. That Bill he hoped to be in a condition to lay upon the table of the House in a few days.
MR. HUMEdesired to know in what way the property of the country was to be registered for the purposes of the Act? He conceived that without a registry it would be impossible to secure the tax upon succession that was now proposed.
§ The CHANCELLOR OF THE EXCHEQUERsaid, the question of the hon. Member for Montrose was, no doubt, an important one, and should receive the full attention of the House, and ample discussion during whatever debates might take place on the Bill. When asked on a former night whether it was intended by the Government that the Registry of Assurances Bill should be pressed upon the House, in order to have it passed into a law, to become the basis of this measure, he answered in the negative, and he now repeated that answer. The Government did not think it was necessary that there should be any general registration of property with a view to this Bill; their belief was that the tax which they meant to impose might be efficiently collected without any such general registration of property as the hon. Member referred to. Therefore, whatever course the Government had taken with reference to 1386 this Bill, the general registration of property—a most important question—should not be in any manner prejudiced by the measure now before the House.
§ MR. WALPOLEhad understood the Chancellor of the Exchequer to say that he was going to bring in a similar measure to that by which property was liable to succession duty on the death of the owner, and that by a separate Bill the right hon. Gentleman was about to render corporate property and property in the hands of trustees, also, liable. He wished to ask whether the exemption of corporate property would begin at the same amount as the exemption contained in the Bill before the House, where parties succeeded upon the death of another? He saw that in the Bill before the House the amount at which the exemption was to commence was to be left in blank; and he wished to know whether, in the separate Bill, the amount would be the same, whatever it might be. The question was one of great importance in reference to the property of the smaller charities vested in trustees. Perhaps the right hon. Gentleman could state whether a similar exemption was to be made in respect to property held by the trustees of the small charities; and, if so, at what sum the exemption was to be considered as commencing?
§ The CHANCELLOR OF THE EXCHEQUERsaid, the minimum point at which the tax would be levied, had not yet received his attention—it was a point of detail, and he was not sure whether any exemption in the case of corporations would be necessary.
Mr. HEADLAMdesired to know whether property vested in the Ecclesiastical Commissioners was to be entirely exempt, or whether any charge would be imposed on that description of property?
§ The CHANCELLOR OF THE EXCHEQUERsaid, that the question reminded him of an omission in his statement. The proposal of the Government would be that all ecclesiastical corporations aggregate should be liable to the tax; but the revenues of the Ecclesiastical Commission having been cut and parcelled into small amounts, or rather into given and definite amounts, which were limited as the provision for certain offices, he thought it clear that this property fell under the description, which the Government considered as attaching to the revenues of the corporations sole. Any portion, therefore, of the property which might be detached from 1387 deans and chapters, and the revenue paid over to the Ecclesiastical Commissioners, to be thereafter distributed by them in the formation of new districts, or eking out the provision for small benefices, would be an official provision, and not liable to the tax,
MR. HUMEwished to know whether the funds left in certain cases for the payment of dissenting clergy would be put upon the same footing as the property of the clergy of the Establishment?
§ The CHANCELLOR OF THE EXCHEQUERsaid, that where there was an endowment for the purposes of a religious community other than the Established Church, which could be assimilated to that of a corporation sole, the same benefit would be extended, quite irrespective of the question what these religious denominations might be. In cases where the funds were held by trustees the matter was one of difficulty; but the Government would come as near as they could to the principle that where property was left to religious communities, bond fide for the provision of certain official duties, it would be exempt.
MR. HUMEwished to ascertain whether funds provided for education and the payment of schoolmasters would come within the exemptions?
§ The CHANCELLOR OF THE EXCHEQUERsaid, there was no general exemption of a provision for the purposes of education, in consequence of the difficulty they would have in framing the measure. They should be obliged to let in all eleemosynary cases, and the construction given to it would be so wide that the whole of the corporate property might escape.
§ Bill read 2°.