§
Now I have done with Excise, and I come to the Death Duties. The Exchequer receipts from the Death Duties in the past year were £11,600,000, besides £2,452,000 paid to the local taxation account, which, of course, does not really enter into the Budget statement. That is an increase of £1,460,000 over the Estimate, which was £10,140,000, and a very large increase over the receipts of 1894–95, which were £8,719,000, but which cannot fairly be compared with the past year, because, as the Committee are aware, the Finance Act, 1894, was only in operation for eight months of the year. Now I should like to compare the increase in the third quarter of last year with the corresponding quarter of 1894–95. I cannot take an earlier comparison for the reason I have stated. The quarter ending December produced an increase of £800,000 over the corresponding quarter of 1894–95. But the last quarter ending March produced an increase of only £434,000 over the corresponding quarter of the previous year. I mention that because, together with other facts which I have stated to the Committee, I think it shows the necessity for caution in our Estimates for the current year. Of course, this increase in the Death Duties was due to the operation of the Estate Duty. The Estate Duty has
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practically killed the old Probate Duty and Estate Duty, and it has materially interfered with the receipts from Legacy and Succession Duty. At any rate, the receipts from Legacy Duty have fallen off. The net receipts from the Legacy Duty during the last year were £2,731,000, a, decrease of £78,000 over the net receipts of the previous year. The net receipts from Succession Duty were £1,051,000, a decrease of £299,000 from the net receipts for the previous year. It is quite a new thing that there should be so large a difference between the estimate of the receipts from Death Duties and the actual Exchequer receipts. Six years ago my right hon. Friend the present First Lord of the Admiralty said:—
Looking to the uncertainty of life itself, it is a remarkable fact that there is no estimate more certain of being proved correct at the end of the year than the estimate framed on the Death Duties.
But the right hon. Gentleman opposite has changed all that, By his system of aggregation he has created millionnaires who previously, if they did not blush unseen, at any rate, were unknown to the tax gatherer [Laughter], and the cold spring of 1895 brought prematurely a good many very large estates into the net of the Exchequer. The receipts from Death Duties in the month of May last, arising from deaths which took place in February and March, were simply phenomenal, and my advisers at the Inland Revenue assure me that in their belief, after making every fair allowance for the effect of aggregation, the number and value of large estates that paid Death Duties within the past year is considerably above what is likely to be the average number and value in fixture years. That, Sir, is one reason for the great difference between the estimate and the actual receipts. But there are two other important reasons. In the first place, and it is a very remarkable fact, realty has not, as a rule, availed; itself of its privilege of paying Estate Duty by instalments. Up to the end of December last, a period of nine months, £25,000,000 of realty had paid the Estate; Duty in whole or in part. Of this amount no less than £22,000,000 paid the Estate Duty in a lump sum. Estate Duty has been paid on £29,000,000
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of realty in the whole course of the year and, assuming that the same proportion exists in the whole, it will be perfectly obvious to the Committee that the last year has profited by several hundreds of thousands of pounds by the fact of the whole duty having been paid in place of one-eighth. That is very satisfactory from one point of view. Many of us thought—I confess I thought that this Estate Duty would be an extremely heavy burden upon realty, and that owners of realty would have considerable difficulty in raising money to pay it, even under the system of payment by instalments. It is remarkable that they should have been able to pay the duty to so large an extent in the lump sum. (Cheers; and an HON. MEMBER: "Remarkable and satisfactory.") But I would just make this observation, that, of course, the extra receipts of the past year have deprived future years of the anticipated receipts in them, and that unless a similar process continues we may look forward to a very considerable decrease on this head in future years. The other cause which has falsified the Estimates of the receipts from Death Duties has been the fact that settled personalty and other personalty not formerly subject to Probate Duty has turned out to be exceptionally large within the year, amounting to as much as £26,000,000. That has brought larger receipts into the year than had been anticipated; but there again I think the Committee will see that as a large portion of this amount is settled personalty, and the Estate Duty is paid only once in the course of a settlement, the receipts may probably be less in future years. ["Hear, hear!"] I think it will be interesting to the Committee if I say something as to the proportions in which the Estate Duty has been levied on different kinds of property. During the year £8,705,000 Estate Duty has been paid on £188,974,000 value of personalty, while £1,232,000 Estate Duty has been paid on £29,805,000 of realty. I have analysed the £25,000,000 of realty which have paid Estate Duty up to the end of December. I find this; consisted of £14,750,000, value of houses and business premises; £6,850,000 agricultural property, which, I may say, has been valued at an average value of 16½ years' purchase of the rental and 20
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years' purchase of the net annual value; £1,825,000 ground rents, and £1,680,000 miscellaneous property. Under all kinds of Death Duties in the year, including the payments to the Local Taxation Account, personalty has paid £11,754,000 and realty £2,218,000, of which it is a rough estimate that about £850,000 may have been paid by agricultural land. I should like, before I quit this painful, though interesting, subject of the Death Duties to do an act of justice to the right hon. Gentleman opposite. When he introduced the Finance Act of 1894, he stated then, that in his opinion, when the Death Duties under the new system came into full working order the produce would be about £13,500,000. The actual produce has been about £14,000,000. [Cheers.] At the time, I confess, I did not believe him. There were many of us who said we did not anticipate so large a yield from the Duty. What the future may have in store for us is another matter on which I will not venture now to express an opinion, but, so far as the last year is concerned, the estimate of the right hon. Gentleman has been more than realised, and I think he is entitled to the credit. [Cheers.] But those advisers who advised him then, and to whom I am sure he will be the first to acknowledge his indebtedness, advise me now that in their opinion, of course other things being equal, we have reached the maximum from the Death Duties, and that future years are much more likely to see a reduction than an increase.