HC Deb 29 April 1897 vol 48 cc1255-8

I now come to the Death Duties. The total receipts from this source were £13,963,000—a. small decrease as compared with the receipts of the previous year, which were £14,053,000. Of the receipts I have named, the Exchequer took £10,830,000 and the Local Taxation Accounts £3,133,000. Now, the Exchequer receipts from the Death. Duties have very considerably exceeded my estimate. ["Hear, hear!"] There are three causes which think will, at any rate, partly account for that. In the first place, I have to make a statement which I fear will be discomforting to the right hon. Gentleman opposite. He has a very favourite phrase in. all his political addresses to the effect that we have taken £2,000,000 out of the pockets, of the general taxpayers and have given it to the landed interest. I am not going to enter into controversial matters as to whether the landed interest has received it or not, but I am anxious for the financial accuracy of the right hon. Gentleman—[a laugh]—and, therefore, I beg to observe that it is not £2, 000,000.

SIR WILLIAM HARCOURT (Monmouthshire, W.)

I said it would be so in this next year.


Ah, but it will not. [Laughter] The estimates formed by the Local Government Board of the effect in the whole year of the Agricultural Eating Act amounted to £1,560,000, and the equivalent grants to Scotland and Ireland make a total of £1,950,000. [Opposition laughter.] I think I may put the grant to Ireland out of the question, because Parliament has not yet applied it to the landed interest or to anybody else, and I do not think that Scotch Members would quite support the view that the Scotch equivalent grant has gone entirely, at any rate, to the landed interest; I take it, therefore, that the opinion of the right hon. Gentleman really refers to the agricultural Rating Act. The estimated effect of that Act was a grant of £1,560,000 to the Local Taxation Account. That has actually turned out to be only £1,331,000, and, of course, the corresponding grants are also diminished, so that the total effect is that £1,664,000 will in the current year be transferred from the Death Duties on personalty to the Local Taxation Account, instead of £1,950,000, as was originally estimated. We have, therefore, saved to the Exchequer in the year just closed half that amount, or £143,000, being half the difference between the estimate and the actual sum payable for a whole year. The second reason why the Death Duties have produced more to the Exchequer than I anticipated is that the principal remission which I carried last year—that relating to settled objects of art and scientific and other collections —has not come into effect during the year just concluded. There are two cases now before the Treasury, but, of course, any loss of revenue by them will be felt in the current year. The third reason is that my advisers were wrong in their anticipations as to the total amount of estates over £250,000 in value which were likely to come under the Death Duties in the year. The total amount in value of such estates in 1895–96 was, £29,969,000. That was considered by those who were best able to judge an exceptionally high amount, but to the surprise of all of us it has been exceeded in the past year. The total value of such large estates in the year just closed has been £31,354,000—["hear, hear!"]—with the result that £84,000 more duty has been paid upon such estates during the year just closed than was paid in 1895–96. I am bound to say that that is a result for which I am not very sorry—["hear, hear!"]—but, after making due allowance for all these causes, I have to admit that I underestimated the receipts from the Death Duties last year. I think, however, we must be cautious before we move too rapidly in the other direction, and I will give the Committee some reasons for that view. The total amount of what is called free personalty that used on the average to come annually under the probate duties before 1894–95 was, roughly speaking, about £160,000,000. That was increased to £163,500,000 in the year 1895–96; but there has been a remarkable falling-off during the past year—a falling-off of more than £10,000,000. Taking that fact with the stories one hears, and in which I think there is some truth, as to the tendency of rich men to make over their property to their heirs in order to avoid the death duties—["hear, hear!"]—and bearing in mind that nothing is so easily made over as free personalty, I think it is possible that this falling-off of more than £10,000,000 may be but the precursor of a greater falling-off in future years. ["Hear, hear!"] So far as the past year is concerned, it has been practically made up by the increased amount of realty coming under the Death Duties. That has risen from £29,971,000, in 1895–96, to £39,606,000 in the year just closed. But the reason for that increase, of course, is this. It is well known that realty has come into the net of the Finance Act of 1894 much more slowly than personalty, and my advisers assure me that, though they think there may be an increase in the amount of realty coming under the Death Duties in future years, yet the increase of the past year will not be anything like maintained. Then, further, I have to remind the Committee that the succession duty and the legacy duty are yearly diminishing. The legacy duty last year yielded net receipts of £2,550,000, a failing-off of £181,000 as compared with the previous year, due to the exemption of small estates by the Act of 1894, and also, I think, to the fact that people are beginning to substitute gifts for legacies, a very much better thing both for the giver and the receiver, but a loss to the revenue. [Laugher and "Hear, hear!"] The net receipts from Succession Duty were £824,000, a falling-off of no less than £227,000, as compared with the previous year, which I expect will continue, at any rate, to some extent. Perhaps it may be of interest to the Committee if I tell them in what shares these duties have been paid respectively by realty and personalty. The total Death Duties that were paid by personalty were £11,433,000. The total Death Duties paid by realty were £2,530,000. out of the duced £10,548,000, and of this realty paid £1,871,000 on a total value of £1,871,000 on a total value of £39,006,000, whilst personalty paid £8,677,000 on a total value of £179,803,000. Of the payments by realty to estate duty £1,708,300 were payments in full, and £162,700 were instalment, showing the fact, which I remarked upon last year, that the preference for paying in full over payment by instalments still continues. ["Hear, hear!"] I have analysed the proportion of the different kinds of realty which came under the Death Duties during the nine months previous to December 31 last. They amounted altogether to about £34,000,000. Of these £16,327,000 represented house property; £10,708,000 represented agricultural land, which was valued at an average of 16¾ years' purchase of the gross value, and 20¼ years' purchase of the net value; £2,700,000 represented ground rents, and £4,181,000 represented miscellaneous property. It is estimated that the total Death Duties paid in the year by agricultural land amounted to about £843,000.


I now have only to deal with the item of stamps. Stamps produced £7,350,000, almost exactly the same as in the previous year, and £650,000 more than my estimate. I had allowed for a very large falling-off in stamps on transactions on the Stock Exchange. That falling-off took place. The receipts from that source fell from £1,533,000 to £974,000; but I had not anticipated the great increase that has occurred from stamps on deeds. There has been an increase under that head of £512,000, and an increase in the companies' capital duty of £100,000, making up for the falling-off I have noticed. There is nothing more fluctuating in the whole revenue than the receipts from stamps. I will give the Committee two instances. The receipts from Stock Exchange stamps in 1893–94 were £471,000, and in 1895–96 £1,533,000; the receipts from stamps on deeds in 1893–94 were £1,812,000; last year they were £2,984,000. I hope that the great increase in these latter stamps may be treated as a sign of improvement in the market for real property, but it would be premature to look upon it as a permanent change.

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