HC Deb 09 July 1896 vol 42 cc1178-81

The Finance Act, 1894, shall be construed as if there were added in section twenty-three thereof, after sub-section fifteen, the following enactment:—

Provided that for the purposes of section eighteen of this Act such institute or heir of entail shall not be deemed to be a person competent to dispose of such estate, unless he is entitled to disentail it without obtaining the consent of any subsequent heir of entail, or having the consent of any subsequent heir valued and dispensed with.

MR. DALZIEL

said this clause seemed to have no relation to finance, and he did not know how it got here.

THE LORD ADVOCATE

said the clause was simply to do away with an unfortunate omission in the Finance Act of 1894, which, as it at present stood, worked a great injustice in Scotland. The Leader of the Opposition would remember that, in Clause 18 of the Finance Act of 1894, he made this change in the succession duty—that the value for the purpose of succession duty on real property was, in the case of a successor who was competent to dispose, made the total value instead of the value of his interest, as had been the law before. As the Bill was originally drafted, entailed property in Scotland was not included amongst the settled property, and a definition clause was put in that an heir of entail in possession should be held to be a person who was competent to dispose. He put down certain amendments to that, and pointed out to the right hon. Gentleman, the then Chancellor of the Exchequer, that it really inflicted a great injustice to all entail proprietors in Scotland, because they practically only had the same amount of possession of their property as a life owner in England had. The right hon. Gentleman felt the force of that argument, and candidly said he would consider the matter on report. He accordingly produced a certain clause on Report, but instead of taking his words as they stood, which simply said the heir of entail should be considered as the possessor of settled property, the clause proceeded to say in positive words that he should have exactly the same privileges—that he should not have to pay the full duty, unless he was a person who was entitled to disentail without consent. They omitted to notice that, through the form of expression being altered, that did not touch the succession of the Succession Duty Clauses which had already been passed before they came to the Amendment. The consequence of that was now, under the Succession Duty Clauses, taken with the interpretation clause, the value for the purpose of succession duty was taken to be the principal value of the property. If they had three brothers in England who succeeded one after the other, they only, for the purposes of the Succession Duty, paid upon what they got, namely, the life interest. In Scotland, where their position was really actually the same, they would have to pay upon the whole principal value of the property.

MR. T. SHAW (Hawick Burghs)

remarked that the clause in the Finance Act of 1894 was very carefully considered, not only in the House, but behind the Speaker's chair, in consultations between both sides of the House, with reference to the qualities which should be attached to the succession of heirs of entail. He complained that if there was to be something in the nature of an alteration of the law of this complicated succession they ought to have had it in the Bill, more particularly if the clause was to be a substantial repeal of a matter which had been expressly and definitely arranged between both sides of the House. He demurred to the view that in Scotland they treated heirs of entail in the same fashion as in England. Heirs of entail in Scotland were by law and in the sense of the matter heritable proprietors, and had been so treated with regard to their rights.

SIR W. HARCOURT

asked when this Amendment was placed on the Paper?

THE LORD ADVOCATE

I think the night before last.

SIR W. HARCOURT

thought more notice should have been given of so material an alteration of the law as this, so that it might have been considered. He should have been extremely glad, for instance, to have had the opinion of the late Lord Advocate, with whom the Act of 1894 so far as it related to this matter was settled. He did not think it was necessary to bring up this clause in Committee. It was not an imposition of a new, but a relaxation of the present duty, and the clause could therefore have been brought in upon the Report stage. He hoped it would be brought up on Report and not pressed now.

*THE CHANCELLOR OF THE EXCHEQUER

hoped the new clause would be inserted now.

SIR W. HARCOURT

But if it is once put in the Bill it will be difficult to get it out.

MR. T. R. BUCHANAN (Aberdeenshire, E.)

argued that Scotch lawyers should have an opportunity of considering the matter.

THE LORD ADVOCATE

hoped the Committee would insert the clause. There would be plenty of opportunity to consider it further on Report. Ten minutes ought to enable a gentleman of the intelligence of the hon. Member who had just spoken to understand the clause, and he had had 24 hours.

SIR W. HARCOURT

said all he asked was that the law should not be altered without notice to those who were officially concerned in the last settlement of it, so that they might have an opportunity of consultation before being assumed to assent to the change.

*THE CHANCELLOR OF THE EXCHEQUER

said there could be no harm in inserting the clause in the Bill, and there would be opportunity for consultation before the next stage.

Motion made, and Question put: "That the clause be added to the Bill."

The Committee divided:—Ayes, 184; Noes, 59.—(Division List, No. 328.)

THE ATTORNEY GENERAL moved the following new clause:—