HC Deb 07 July 1896 vol 42 cc988-1001

(1.) Where any property passing on the death of a deceased person consists of such pictures, prints, books, manuscripts, works of art, scientific collections, or other things not yielding income as appear to the Treasury to be of national, scientific, or historic interest, and is settled so as to be enjoyed in kind in succession by different persons, such property shall not, on the death of such deceased person, be aggregated with other property, but shall form an estate by itself, and, while enjoyed in kind by a person not competent to dispose of the same, be exempt from estate duty, but if it is sold or is in the possession of some person who is then competent to dispose of the same, shall become liable to estate duty.

(2.) The person selling the same, or for whose benefit the same is sold, and also the person being in possession and competent to dispose of the same, shall be accountable for the duty, and shall deliver an account, in accordance with section eight of the principal Act, in the case of a sale within one month after the sale, and in the case of a person coming into possession, or if in possession becoming competent to dispose, within six months after he so comes into possession, or becomes competent to dispose.

*MR. GIBSON BOWLES moved to omit the words "as appear to the Treasury to be," in order to insert instead thereof the words "as are." He said that the clause as proposed by the Government approximated in principle, though not in effect, to the clause in the Legacy Duty Act, exempting heirlooms from Legacy Duty. Objects of national, scientific, or historic interest, which yielded no income and which could not be sold, were really only in the custody of the possessor; and they ought to be exempt from Estate Duty. The clause only applied to property of a certain definite kind such as "pictures, prints, books, manuscripts, works of art, scientific collections, or other things not yielding income as appear to the Treasury to be of national, scientific or historic interest." Such property was to be exempt from Estate Duty. What he objected to was that the Treasury were to determine what property came within the exemption. Why should they put this power in the hands of the Treasury? In the first place, the clause gave the Treasury the power of construing an Act of Parliament, which they were utterly incompetent to do. In the next place the Treasury was an interested party and therefore ought not to be empowered to decide in the matter. It was undoubtedly the interest of the Treasury to bring into its coffers every farthing that it could lay its hands upon. In his view the Treasury was a most improper body to determine these questions, it was imperfectly equipped by its legal knowledge for the purpose and it was an interested party. Just let the Committee conceive the state of feeling of his right hon. Friend the Secretary to the Treasury having to determine whether his (the hon. Member's) picture was or was not of historic or national interest. In his opinion the proper body to determine whether certain articles were of scientific or historic interest was in the first place those who made the levy, and secondly the Court of Law. He thought, however, that in most cases an agreement would easily be come to between the levying body and the person chargeable, and the Courts of Law would be very rarely resorted to. He contended that the proper language to use in Acts of Parliament was "is," "shall," and so forth. That was what he called enacting, not that such and such things shall be if a department said so. On these grounds he submitted that the proper words to be used were the words he proposed to substitute, and he therefore moved the Amendment which stood in his name.


said it would be out of order to discuss the whole clause on this Amendment, and he would reserve what he had to say until they came to the Motion for the adoption of the clause He objected to the clause altogether on principle, as he believed it would be a very serious sacrifice of revenue. Under the Probate Duty property of this land had always paid, and for the first time it was proposed to exempt it. That was an attack on direct taxation. The hon. Member knew that the principle of taxing this kind of property had existed as long as the Probate Duty had existed. The particular Amendment of the hon. Member was that the Judges should determine this question, and not the Treasury. He did not think either authority was very competent to judge this question. How was it to be determined? The hon. Member had put very well a test question with reference to a picture to commemorate for ever the lineaments of the present Member for King's Lynn. [Laughter.] That, no doubt, would be a matter of great interest both nationally and historically. [Laughter.] but the question was—Who was the best person to decide that? He was sorry to say that the hon. Member had repudiated the decision of the present Secretary to the Treasury—[laughter]—and pointed out that the Secretary to the Treasury was not a permanent officer. As Horace said of Augustus, it was to be hoped that the decision might long be postponed. [Laughter.] It might not be the present Secretary to the Treasury who would have to determine the question. But the hon. Gentleman substituted for him the Courts of Law. Fancy the Courts of Law having to decide the question of the importance from the national and historic point of view of the portrait of the hon. Member [Laughter.] There might be a division of opinion in the Court of first assistance and the question would be carried to the Court of Appeal, and it might be that the question of the importance of the portrait of the hon. Member might have to be decided by the House of Lords. [Laughter.] He thought, on the whole, that the decision of the Treasury would be the better decision. Considering the old maxim de gustibus non est disputandum, he confessed that confining himself to the present Amendment he thought a simple decision by the Treasury was the better course. He had a profound respect for her Majesty's Judges, but he was not sure that the simple fact that a man was suddenly clothed in ermine made him infallible as an authority on national, scientific, and historic subjects. Therefore, on the whole, he would rather leave the question to the Treasury.


said that Section 15 of the Finance Act of 1894 provided that it should be lawful for the Treasury to remit the duty with respect to such works of art as appeared to the Treasury to be of national, scientific, or historic interest, and to have been given for national purposes, or to certain public bodies. In that case Parliament deliberately preferred the opinion of the Treasury to the interpretation of the Courts of Law. As the right hon. Gentleman had pointed out, if the question were left to the Courts of Law, it would have to be narrowly interpreted by the Inland Revenue in the first instance, and might have to be carried to the higher Courts before a final decision was arrived at. He believed that the Act of 1894 was right with respect to this matter, and that no better tribunal could be devised than the Treasury for the settlement of questions of this kind. His hon. Friend behind had suggested that his portrait might be of national and historical interests. (Mr. GIBSON BOWLES, "No.") He begged pardon; his hon. Friend was too modest to make the suggestion. [Laughter.] But he, as Chancellor of the Exchequer, should certainly decide the picture to be of historical interest, for his hon. Friend's memory would be entitled to a vindication against the somewhat libellous portraits of him that occasionally appeared. [Laughter.] The essential things in these matters was that a decision should be arrived at as speedily and at as little cost as possible. The Treasury had construed the 15th section of the Act of 1894 in a liberal sense, which had been satisfactory to all persons whose interests were concerned. These being matters not of law but of fact, it was far better to intrust them to a tribunal like the Treasury than to the Law Courts.


said that he could not remain insensible to the appeal and representations of the right hon. Member for West Monmouthshire. He would, therefore, ask leave to draw his Amendment.

MR T. W. LEGH (Lancashire, N.W., Newton) moved after the word "scientific" to insert the word "artistic," in order to exclude from the Estate Duty artistic collections not yielding income. He said that the exemptions mentioned in the clause were very limited. A man not necessarily a millionaire, might succeed to a gallery of family pictures. Ancestors, as a rule, were not distinguished people; in the main they were decidedly undistinguished, and it was extremely improbable that, in most cases, their portraits would come within the category of national or historic pictures. At the same time these pictures might be extremely valuable as works of art, and when they yielded no income it appeared to him to be a hard provision that they should be aggregated.


explained that works of art were not excluded from the operation of the clause, but to be included they must be of national or historic interest. They must be something more than merely artistic. It was not intended to give the privilege proposed by this clause to collections of pictures or anything of the kind unless they possessed some such national or historic interest as connected them specially with a particular place or family or with the country at large. In fact, the clause was intended to cover what were ordinarily known as heirlooms. The Amendment of his hon. Friend was far too wide.


pointed out that there were works which were neither scientific, nor historic, nor national in their interest, but were purely artistic, and which ought properly to be considered under this clause. Under the definition just suggested by the Chancellor of the Exchequer, the whole of the National Gallery, or the greater part of it, would be excluded from the privileges of the clause. There were saints and madonnas which were neither historical, nor national, nor connected with any family or place. Consequently the whole of these beautiful specimens of early Italian art, if they were heirlooms, would be charged with duty though the intention of the clause was to exclude them. There was a gentleman in Wiltshire who possessed an iron chair which was said to be worth something like £20,000 or £30,000. It was not historical, and undoubtedly it was not of national interest because it was made in Germany. [Laughter.] The only interest attaching to the chair was the artistic excellence of its workmanship. It was an heirloom and could not be sold, and surely it was entitled to be protected. He thought there was a case for the Amendment and that the case had not yet been met.


said that when they entered upon the term "artistic" they entered the largest and vaguest term possible. Clause 15 of the Act to which the Chancellor of the Exchequer had referred was of a far more limited character, because it dealt with matters of national, scientific, and historical interest which were devoted to the public. Here they were proposing to protect from the duty everything that was kept in private hands. If they were going to protect from duty everything of an artistic character, what they were really going to do was to make an enormous present to the richest millionaires in the country. ["Hear, hear!"] The people who had those fine works of an artistic character were, they were glad to know, persons of great wealth and of great taste also, but that was no reason why they should exempt them for the first time from taxation in this respect. He hoped the Amendment would not be accepted.


thought the right hon. Gentleman was entirely in error in saying that the great works of art in England were in the hands of very rich people. That was not at all the case. Many persons who, especially in those hard times of agricultural depression, were by no means rich, owned very choice works of art. In a great number of cases these works of art were heirlooms, which the law forbade them selling. A man might succeed to them, but he might not sell them. Yet he had to pay an enormous duty on them, and he might be placed in the position of having to pay such a sum as might cripple his income for life, or certainly for a great many years. That constituted the great hardship of the proposal made by the right hon. Gentleman the Member for West Monmouth himself. He was grateful for the modifications introduced by the Chancellor of the Exchequer, but he agreed with his hon. Friend who moved the Amendment that he had not gone far enough. His right hon. Friend said that the only heirlooms he intended to protect were heirlooms of historic and national interest. Why make that distinction? Certain heirlooms, consisting of some of the most splendid pictures in the world, could not come under either of these categories. For instance, the choicest examples of Sir Joshua Reynolds might be in the possession of a poor family; the heir would be completely unable to sell under the law, and yet would have to pay an enormous duty on the pictures. Were they to be considered of national and historic interest? In one sense all Sir Joshua Reynolds's pictures were of national importance, but he did not imagine that would be the sense in which the Treasury would interpret the Act. As a matter of fact, the reason why a picture was made an heirloom was, not because it was national or historic, but because it was artistic; and it appeared to him the man who was burdened—for in the case he had put he was burdened—with a choice work of art of that kind, upon which he would have to pay an enormous duty, ought to be protected as he would if it were of historical or national importance. ["Hear, hear!"] Historical interest he had always understood to mean historical from a public point of view, not because it was connected with a family. This was an extremely vague word which would have to be interpreted by the Treasury, in whom, he was afraid, he had perhaps not quite as much confidence as his right hon. Friend in such a case as this. He ventured to think the Amendment was one which might well be accepted.


said the remarks of the Chancellor of the Exchequer had robbed this clause of the value he himself attributed to it. He always thought it was introduced in order to encourage people to collect pictures, books, prints, and manuscripts of great value and of an interesting character, such as they wished to preserve in this country, and to prevent going across the seas. The noble Lord seemed to confine this matter to heirlooms, and to think that the country was interested in preventing heirlooms being sold. For his part he did not know that the heirlooms of this country were such valuable things that they were particularly anxious to preserve them, and the Court of Chancery possessed the means of selling them when the interest or the necessity of the family required it. Indeed, a great many of the pictures which the nation now possessed were originally heirlooms, and orders had been made by the Court for their sale. He thought the Amendment was rational, and that they ought not to confine the clause merely to things connected with a place or ancestors, but ought to try and preserve in this country works of the kind referred to because they were of interest to the nation at large, so that they could all have a certain satisfaction in feeling that they existed in their midst. The idea of confining the clause to particular houses and families savoured rather of an aristocratic notion, which a large view of art would liberate the right hon. Gentleman's mind from. As this was to be left to the Treasury, the Amendment of the hon. Gentleman opposite, dwelling upon the artistic importance of a picture, might very fairly be accepted.


observed that the wording of the clause would include a picture which was an object of national interest.


said it appeared to him that the Amendment of the law proposed by the Bill was of a very dangerous character. If it was desired to abate taxation in this country they ought to abate it in the interests of those who really saw, let alone possessed, fine pictures. Hon. Gentlemen opposite would forgive him for saying so, but this was a piece of class legislation, practically exempting from taxation those of a particular class. In taxing the people of this country they should tax them on fair principles. He deprecated the introduction of exemptions of this character into our taxing legislation, for, once begun, there was no knowing where they would end.


said many hon. Members on the Ministerial side had a friendly feeling towards the Amendment because, with the indulgence of the Treasury, it would keep in the hands of families who were not rich works of art which they cherished, and prevent them from being sold and getting into the hands of millionaires and other wealthy persons. The hon. Member opposite left out of account the natural pride and strong feeling many had in wishing to pass on to those who followed the comparatively few things that had descended to them from their ancestors.

Question put, "That the word 'artistic' be there inserted."

The Committee divided:—Ayes, 44; Noes, 228.—(Division List, No. 318.)


Emoved to leave out the words "and is," and to insert instead thereof the words "and to have been accessible during the lifetime of their late possessor to public view and inspection under reasonable conditions, and where such property is." The object of the Amendment was to confine the exemption under the clause to collections which had been accessible to the public. Many owners had been exceedingly indulgent to the public, but there were exceptions.


thought that private owners were exceedingly liberal in lending the collections to exhibitions, or in opening them to the general public. ["Hear, hear!"] He felt an extreme difficulty in laying down a legislative condition as to the rights of the public in this matter. The rights might be so exercised as to become an intolerable hardship to the owner of, perhaps, one or two pictures such as would come under the operation of the clause. The proposal of the hon. Member was retrospective, and that was impracticable. He thought that it would be perfectly impossible for the Treasury or any official to ascertain whether, during a considerable number of years, the clause under such conditions had or had not been complied with. He thought that, if any conditions were laid down, they should be prospective and not retrospective. ["Hear, hear!"]


said it was quite true that there would be great difficulties in carrying out the proposals of his hon. Friend, but that was the great objection to the clause. The clause in the Act of 1894 laid down an intelligent principle, but now for the first time they were giving exemption to private individuals who kept up these collections for their own use. That was the whole distinction between the two cases. No doubt, in the great majority of cases the owners of these pictures and works of art, in London and elsewhere, kept them where the public could see them, but he had known some exceptions of a not very agreeable character. He would not mention names, but in one case, where there was a valuable collection of manuscripts of Lord Bacon, the reply to the applicant was that it would involve "you staying in my house, which would not be pleasant to me, therefore I must refuse to let you see them." He had known valuable collections to which access was absolutely refused altogether. Under this clause these collections would be exempted from taxation. He thought, in return for exemption, there should be some public advantage. That was a sound principle, and he should therefore support the Amendment. ["Hear, hear!"]!


also supported the Amendment, as there were collections from which the public did not derive the slightest advantage.


held that there were other difficulties, and that these collections should not be exempt. He thought the Amendment might be easily deprived of its retrospective character, to which the Chancellor of the Exchequer objected. With that view, he moved to amend the proposed Amendment by providing that it should not take effect until after the passing of the Act. The possession of historical collections of works of art, of libraries with rare historical manuscripts, etc., gave to persons a peculiar interest and position, and that being so, he thought it only fair that the public should be admitted to some participation in the treasures. He knew of a case, however, in which an historical student was called upon to pay a guinea before he was allowed to see a certain document, and of other cases in which great difficulty was found in gaining access to certain manuscripts, not on the part of the general public, but of working students. He would give specific cases if necessary. He repeated that the possession of those historical and rare treasures gave to a man a far higher position than the possession of a stud of racehorses or of great wealth, and in that case he thought those persons had a corresponding duty to the public. If they ignored that duty their collections ought not to he exempted from taxation. ["Hear, hear!"]

Amendment to the proposed Amendment agreed to.


said it was clear that the Chancellor of the Exchequer was not unfavourable to the principle put forward in the Amendment, and that if he could carry it out he would not refuse to do so. It was true, no doubt, that in most cases the proprietors of collections were willing to allow the public to share the beauty of their treasures. He would refer, by way of example, to one notable instance of generosity—that of the Duke of Westminster, who had thrown open his house in London to the public on Sunday afternoons, in order that they might view his pictures and other works of art. [Cheers.] But there were cases in which proprietors of collections had refused a view of their treasures to the public, and he knew of one case in which admission was refused even to the representatives of the Record Office. He had risen, however, mainly to make a suggestion to the Chancellor of the Exchequer, who recognised that there was some ground for the Amendment in the interests of the public. He was sure that if the right hon. Gentleman would state that he would consider the question between now and the Report stage, and see whether some rule could not be framed to meet the purpose in view, his hon. Friend would withdraw the Amendment. ["Hear, hear!"]


said he objected to the Amendment, in the first place because of its retrospective character, but of course if that could be removed the case assumed a somewhat different aspect. He confessed that he sympathised with the wish expressed that some kind of return should be made to the public by the possessors of collections of objects of art for the advantage of exemption which they would obtain under the clause in respect of those collections. [Cheers.] At the same time it would be very wrong that that return to the public should be exacted in such a way as to place the possessors of the collections in any unfair position. ["Hear, hear!"] The matter was undoubtedly one of considerable difficulty, but he would undertake to consider it before the Report stage. ["Hear, hear!"]


trusted that the Amendment would be so altered as to apply to those persons who might become possessed of pictures in the future. The only justification for this clause was that if persons possessing pictures and other works of art were not to be taxed in respect of them, some benefit should be derived by the public by an inspection of them. He could not understand why, if he collected together four or five valuable horses, his successor should have to pay Estate Duty upon them, while, if he invested his money in pictures and the like, the property should be exempt from such duty. Instead of laying it down what was a national and an historical picture, the best course to adopt was to let exemption under the clause apply to those pictures and works of art to which the public had free and uncontrolled access.


hoped that, after what the Chancellor of the Exchequer had stated, the hon. Gentleman would not press the Amendment to a Division. There would be a fair opportunity to consider the proposals of the Chancellor of the Exchequer on Report. He also hoped that the Chancellor of the Exchequer would report Progress after the Amendment was disposed of, so as to afford an opportunity to discuss the clause as a whole. The Committee had now done a good day's work.


did not understand that his right hon. Friend had made any engagement to give effect to the words of the hon. Member; all that the right hon. Gentleman said was that he would consider the Amendment. He thought that grave inconvenience would attend any proposal of this kind if accepted, and it could not be agreed to without exciting the greatest opposition from other quarters of the House. Though nearly every owner of curiosities was most anxious to show them to the public, anything like a specific direction to do so in an Act of Parliament would be open to great objection. He knew a case where manuscripts were always shown to the public without any restriction, and where the signatures of many important historical papers had disappeared, inflicting not only a loss on the owners, but a loss to great historical curiosities.


thought that what he had said had been sufficiently guarded. He could not promise to bring up an Amendment on Report, because the matter was one of extreme difficulty and delicacy, and it was conceivable that any proposals of the kind might really inflict great hardship on private individuals. At the same time he sympathised with the object of those who moved the Amendment; and he hoped the Committee would be content to leave the matter there.

Amendment, by leave, withdrawn.

Question proposed, "That Clause 16 stand part of the Bill."

Committee report Progress; to sit again To-morrow.

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