§ MR. KETTLE (Tyrone, E.)
I beg to ask the Secretary to the Treasury whether he is aware that in calculating for the purpose of the Finance Act, 1894, Section 16, the value of holdings purchased under the Irish Land Purchase Acts, the standard is fixed at twenty-five years purchase of the Poor Law Valuation, and no regard is had to the terminable annuity payable to the Land Commission; and, seeing that the effect of this practice has been to make many small holdings liable for Estate Duty which would have paid no duty had they not been purchased under the Land Acts, and in view of the necessity of affording every legal protection and immunity to the rapidly multiplying small estates in Ireland, whether he will take steps to amend the practice in question.
§ MR. MCKENNA (for Mr. RUNCIMAN)
The standard of twenty-five years purchase of the Poor Law Valuation is only used where it is less than the market value of the holding. A deduction is always allowed for the terminable annuity where the duty is calculated on the net value of the property. Under Section 16 of the Finance Act, 1894, however, the duty has to be calculated by reference to the gross value. In cases falling under this section, the deduction can, therefore, only be allowed where the estate was purchased and the charge created by some person other than the deceased. Where the purchase has been made by the deceased himself, the annuity constitutes an encumbrance which he has himself created, and its redemption value is included in the gross value of the property. Recourse to Section 16 is however only optional.