THE ESTATE DUTY.

HC Deb 07 May 1894 vol 24 cc477-80

MR. GIBSON BOWLES (Lynn Regis)

I beg to ask the Chancellor of the Exchequer whether the charge of Estate Duty imposed by the Finance Bill will be deducted from the principal value of unsettled real property passing by a death before the charge of Succession Duty is levied thereon, or whether the Succession Duty will be chargeable on the whole principal value without any deduction being made therefrom for the Estate Duty; and whether, in the case of settled real estate, the Estate Duty will be chargeable upon the total principal value of the estate, and the further Estate Duty of 1 per cent. also on the total principal value of the estate without any deduction therefrom of the Estate Duty, and finally the Succession Duty also on the total principal value without any deduction therefrom of the Estate Duty and the further Estate Duty?

THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) Derby

With reference to the first part of the question, it would be quite right that there should be provision made in the Bill for the deductions to which the hon. Member referred. The second part of the question stands on an entirely different footing, and I do not think the deduction suggested can be properly made; but I will look further into the matter.

MR. GIBSON BOWLES

Does the right hon. Gentleman think that under his Bill as it now stands the deduction would not be made?

SIR W. HARCOURT

I would rather rather reserve my opinion on that.

MR. KNOX (Cavan, W.)

I beg to ask the Chancellor of the Exchequer what sum out of the total estimated increase of the Death Duties on realty will, in the opinion of the Inland Revenue Authorities, fall upon realty in Ireland?

SIR W. HARCOURT

The amount of Death Duties falling upon realty in Ireland is about 8–5 of the total amount for the United Kingdom. The Inland Revenue Authorities estimates the ultimate increase in the Death Duties on realty for the whole Kingdom in round figures at El,300,000. Ireland's share in this, on the basis of the percentage mentioned, would be £ 110,500; but, inasmuch as the increase is largely due to the higher rates on very large properties, and the proportion of very large properties in Ireland is less than in England, the actual increase in Ireland will, pre- sumably, be a good deal less than this. I am, however, unable to give the exact figures.

COLONEL KENYON-SLANEY (Shropshire, Newport)

I beg to ask the Chancellor of the Exchequer if he will state what sum, under the proposed new Death Duties, a son of 40 will have to pay who succeeded his father in a landed estate the selling value of which is estimated at £50,000; and what sum, under the existing law, a son of 40 has to pay who succeeds his father in a landed estate of which the net annual income is £1,375, or the equivalent at 2¾ per cent., the yield of Consols, to the estated named in the first question?

SIR W. HARCOURT

In the first case put by the hon. Member, the son, if he succeeded in fee simple, would pay exactly the same sum as if he succeeded to £50,000 Consols. In the second case, the son, succeeding in fee simple, is at present liable to pay £306 15s. Succession Duty, and Estate Duty of 1 per cent. on the capital value of the property, whatever it may be. The second part of the question assumes that a lauded estate, at an annual income of £1,375, is worth £50,000, or 36 years' purchase. If it be worth that the prospects of the Exchequer are good.

COLONEL KENYON-SLANEY

Can the right hon. Gentleman say what sum in the first instance would have to be paid?

SIR W. HARCOURT

Yes; 4½ per cent. on £50,000—£2,250.

COLONEL KENYON-SLANEY

So that the difference is as between £306 and £2,250?

SIR W. HARCOURT

That will depend on the capital value of the property. The hon. Member for the purposes of his question values the estate at 36 years' purchase.

MR. BARTLEY (Islington, N.)

Are we to understand the duty will be on the selling value of the property—on the sale by auction or any other way?

SIR W. HARCOURT

The valuation will be made in the best possible way having regard to the nature of the property. In some cases it may be desirable to fix it at so many years' purchase; in others it might be improper to do so, especially in the case of building land paying only a nominal rent. To take that at so many years' purchase would be obviously unfair, but it would be proper, on the other hand, in the case of a landed estate at rack rents, to take a certain number of years' value.

MR. GIBSON BOWLES

Would it not be better to substitute "marketable" for "capital" value? That is the old phrase.

SIR W. HARCOURT

I will consider that, but I have taken the words "capital value" because they are used in the Estate Duty.

MR. FINCH (Rutland)

I beg to ask the Chancellor of the Exchequer upon what basis advowsons, or the next presentations to Church benefices, are to be valued for the purposes of the Death Duties under the proposed Finance Bill?

SIR W. HARCOURT

Advowsons, and next presentations to Church benefices, will be assessed for Estate Duty on the values which they may be estimated to be worth at the death; that is to say, the sum which the accountable persons would be willing to accept in the open market. What that sum may be must depend on the circumstances of each case.

MR. FINCH

Is it not rather an interest in expectancy?

SIR W. HARCOURT

Advowsons are now valued under the Death Duties, and the hon. Member on referring to the 24th section will be able to see the principle on which it is done.

* MR. GIBSON BOWLES

Is not the right hon. Gentleman under a misconception? Would not the value of the advowson be the value not at the death, but at the date of rendering the account?

SIR W. HARCOURT

I can hardly go into these details across the Table.