§ (1) Any Legacy or Succession Duty which under the Stamp Act, 1815, or the Succession Duty Act, 1853, or any other Act, is payable at the rate of three per cent. shall be payable at the rate of five per cent., and any Legacy or Succession 1111 Duty which under the said Acts is payable at the rate of five per cent. or six per cent. shall be payable at the rate of ten per cent. on the amount or value of the legacy or succession.
§ (2) The Legacy and Succession Duty payable at the rate of 1 per cent. on the amount or value of any legacy or succession under the Stamp Act, 1815, and the Succession Duty Act, 1853, or any other Act, shall be levied and paid notwithstanding any repeal effected by or anything contained in the principal Act or any other Act, and the duty shall also be levied and paid in cases where the person taking the legacy or succession is the husband or wife of the testator, intestate, or predecessor as in cases where the person taking the legacy or succession is a lineal ancestor or descendant of the testator, intestate, or predecessor:
§ Provided that the duty shall not be levied—
- (a) Where the principal value of the property passing on the death of the deceased and chargeable with Estate Duty (other than property in which the deceased never had an interest) does not exceed fifteen thousand pounds, whatever may be the value of the legacy or succession; or
- (b) Where the amount or value of the legacy or succession together with any other legacies or successions derived by the same person from the testator, intestate, or predecessor does not exceed one thousand pounds, whatever may be the principal value of the property so passing and chargeable; or
- (c) Where the person taking the legacy or succession is the widow or a child under the age of twenty-one years of the testator intestate or predecessor, and the amount or value of the legacy or succession together with any other legacies or successions derived by the same person from the testator, intestate, or predecessor does not exceed two thousand pounds, whatever may be the principal value of the property so passing and chargeable.
§ (3) In this Section the expression "deceased" means in the case of a legacy the testator (including a person making a donation mortis causa) or intestate, and in the case of a succession arising through devolution by law, the person on whose death the succession arises, and in the case of a succession arising under a disposition, the person on whose death the first succession thereunder arises; and the expression 1112 "legacy" includes residue and share of residue.
§ (4) This Section shall take effect in the case of Legacy Duty only where the testator by whose will the legacy is given or the intestate on whose death the Legacy Duty is payable, dies on or after the thirtieth day of April, nineteen hundred and nine, and in the case of a succession arising through devolution by law, only where the succession arises on or after that date, and in the case of a succession arising under a disposition, only if the first succession under the disposition arises on or after that date.
§ Sir HENRY CRAIK
I beg to move to leave out Sub-section (2).
It is perfectly clear what will be the effect of the words in this Subsection to which I take exception. We are sometimes accused on this side of the House of attempting to fritter away these taxes, and so make the proposals of the Government futile. If there is one tax for which there is less justification than another it is that tax now to be imposed from which the widow and orphan have hitherto been free. It is upon that most afflicted class that you wish, even in the case of comparatively small inheritances, to impose a new burden. It is unnecessary to insist upon the hardship which this Sub-section will involve. The part to which we chiefly object is that which imposes upon the direct lineal descendants a burden from which they have hitherto been granted relief, even under the Finance Act of 1894.
§ Mr. W. MITCHELL-THOMSON
I beg to second the Amendment. In the Committee there were only two defences made for this novel proposal. One was the old defence, "We want money." In regard to that defence. I should like to know what the Financial Secretary to the Treasury estimates as the yield from this particular tax. I think before reliance is placed on the financial defence we ought to have some figures with regard to the expected yield of the tax. The second defence was made, if I remember rightly, by the Chancellor of the Exchequer. He asked, "Why should we not charge Death Duties in this case?" He said a son had no better right to the property than his father. Nobody knows better than the Secretary of State for War that, however that may be in the case of England, it is not the fact in the case of Scotland. Take the position in the case of a Scotsman who dies leaving, let us say, a widow and son. By the law of Scotland he can only dispose of one-third 1113 of his movable property. One-third goes to the widow and one-third goes to the son. The testator can only make a will with regard to one-third of his property if he leaves a widow and son. Look at the position of a man under these circumstances who has to leave a certain amount of his property to his son. The law says he must do it, and because he does what the law says he must do, you propose to tax him under this Bill. I should like to hear the legal opinion of the Secretary of State for War in regard to that. Before we finally pass from this Clause we ought to have a statement from the Government firstly, as to the expected financial yield of this particular tax, and, secondly, what is going to be the position in regard to those in Scotland, who, under the present law, have rights which are indefeasible, and whom you propose by process of law to penalise.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)
The hon. Gentleman who has just sat down seemed to think that this was a novel proposal. If he had looked at the words of the Clause he would have seen that this is not a novel proposal at all, but is a revival of an old law dating back to the year 1815. A more serious question which the hon. Member asked was what is the financial effect of this proposal. To the first part of the Sub-section the amount we calculate would be about £600,000, and so far as the widows alone are concerned the uniform duty is expected to be about £300,000. There was rather a suggestion that there were hard cases in this proposal. But these are met by the provisions (a) (b) and (c). I confess I do not see any particular hardship in proposed taxation of this sort, in taking a small sum in the case even of lineal descendants. I do not see why a lineal descendant should not contribute, undoubtedly in a much less degree, than a mere distant relation for the purposes of State.
Mr. SCOTT DICKSON
The failure to exact it in the case of husbands who succeed to wives, or vice versâ would result in a loss of £600,000. Does that mean that wives succeed husbands and husbands succeed wives to the extent of £60,000,000 sterling.
§ Mr. HOBHOUSE
The calculation we made as to the Sub-section (2) down to the word "and" ["any other Act, and"] was a sum of £600,000. The second part means a sum of £300,000.
Mr. SCOTT DICKSON
I do not think that the right hon. Gentleman's answer has at all met the point of my hon. and learned Friend that in Scotland the wife has an inalienable right to get one-third of the husband's moveable property as a matter of debt. It does not seem fair when that is the state of the law that the Succession Duty should be exacted from them as if the matter was not truly a debt. The right hon. Gentleman probably does not know about that, and I cannot blame him; but I think that the Secretary of State for War in a former state of existence did know about it, and I would ask him if there is not some substance in my hon. Friend's point?
§ Mr. HALDANE
We are not dealing with Legacy Duty here, but with Succession Duty only. In England a great deal of the property to which a wife or husband succeeds is separate, and it passes from the wife to the husband, and the husband to the wife in exactly the same way as it passes under the compulsory provisions of the common law of Scotland.
§ Mr. EVELYN CECIL
As regards the husband and wife I do not see that any adequate explanation has been given of why they are put on a different basis for Legacy Duty and for Income Tax. The answer given to this point in Committee was that the Chancellor of the Exchequer was not responsible for its existence. I wish that he could more often plead that some of his proposals were old proposals and sound proposals, because most of them are exceedingly new, unsatisfactory and unjust. But to tell us that he is not responsible seems to me to be a very feeble answer. Surely if he pioneers this Bill through the House and it passes into law he is responsible? The distinction I object to is that as regards Income Tax the incomes of husband and wife are counted as one because by that means you get a higher tax out of them. Here you go on a different principle, and say that for Legacy and Succession Duty husband and wife are to be treated as separate in order that you should also get more money out of them. The Chancellor of the Exchequer cannot ride off by saying that he is not responsible. If he unites the purses of husband and wife for the purposes of Income Tax to charge them higher, let him also unite them for the purposes of Legacy and Succession Duty, even though it might cost him a little money. Let us have the same principle in both cases. I 1115 cannot follow any explanation that have been given us from the Treasury Bench up to the present, because he does not pretend to recognise these inconsistencies, and he will not produce any adequate argument to justify them in this Bill.
§ Question put, "That the words proposed to be left out, to the word 'or' ["for the purpose of or"] stand part of the Bill."
§ The House divided: Ayes, 165; Noes, 25.1115
|Division No. 854.]||AYES.||[9.35 p.m.|
|Abraham, William (Rhondda)||Glover, Thomas||Ponsonby, Arthur A. W. H.|
|Acland, Francis Dyke||Goddard, Sir Daniel Ford||Price, C. E. (Edinburgh, Central)|
|Agnew, George William||Griffith, Ellis J.||Radford, G. H.|
|Ainsworth, John Stirling||Gwynn, Stephen Lucius||Raphael, Herbert H.|
|Alden, Percy||Haldane, Rt. Hon. Richard B.||Rea, Rt. Hoi. Russell (Gloucester)|
|Allen, A. Acland (Christchurch)||Hall, Frederick||Rea, Walter Russell (Scarborough)|
|Allen, Charles P. (Stroud)||Harcourt, Rt. Hon. L. (Rossendale)||Rendall, Athelstan|
|Ashton, Thomas Gair||Harcourt, Robert V. (Montrose)||Richards, Thomas (W. Monmouth)|
|Astbury, John Meir||Harmsworth, Cecil B. (Worcester)||Ridsdale, E. A.|
|Balfour, Robert (Lanark)||Hart-Davies, T.||Roberts, Charles H. (Lincoln)|
|Barran, Rowland Hirst||Haslam, James (Derbyshire)||Roberts, Sir J. H. (Denbighs)|
|Beale, W. P.||Haslam, Lewis (Monmouth)||Robertson, Sir J. M. (Tyneside)|
|Beauchamp, E.||Haworth, Arthur A.||Robinson, S.|
|Bennett, E. N.||Helme, Norval Watson||Roe, Sir Thomas|
|Berridge, T. H. D.||Henderson, J. McD. (Aberdeen, W.)||Rogers, F. E. Newman|
|Boulton, A. C. F.||Henry, Charles S.||Rowlands, J.|
|Brace, William||Herbert, T. Arnold (Wycombe)||Runciman, Rt. Hon. Walter|
|Brigg, John||Hobart, Sir Robert||Rutherford, V. H. (Brentford)|
|Bright, J. A.||Hobhouse, Rt. Hon. Charles E. H.||Samuel, Rt. Hon. H. L. (Cleveland)|
|Brodie, H. C.||Hodge, John||Samuel, S. M. (Whitechapel)|
|Brooke, Stanford||Holt, Richard Durning||Schwann, Sir C. E. (Manchester)|
|Brunner, J. F. L. (Lanes., Leigh)||Hooper, A. G.||Sears, J. E.|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Howard, Hon. Geoffrey||Seely, Colonel|
|Bryce, J. Annan||Hutton, Alfred Eddison||Shackleton, David James|
|Burns, Rt. Hon. John||Hyde, Clarendon G.||Sherwell, Arthur James|
|Byles, William Pollard||Illingworth, Percy H.||Silcock, Thomas Ball|
|Cameron, Robert||Jardine, Sir J.||Stanger, H. Y.|
|Channing, Sir Francis Allston||Johnson, John (Gateshead)||Stanley, Hon. A. Lyulph (Cheshire).|
|Cheetham, John Frederick||Jones, William (Carnarvonshire)||Stewart-Smith, D. (Kendal)|
|Clough, William||King, Alfred John (Knutsford)||Strachey, Sir Edward|
|Cobbold, Felix Thornley||Laidlaw, Robert||Summerbell, T.|
|Collins, Stephen (Lambeth)||Lambert, George||Sutherland, J. E.|
|Compton-Rickett, Sir J.||Lamont, Norman||Taylor, John W. (Durham)|
|Corbett, A. Cameron (Glasgow)||Layland-Barratt, Sir Francis||Taylor, Theodore C. (Radcliffe)|
|Cornwall, Sir Edwin A.||Lever, W. H. (Cheshire, Wirral)||Thomas, Abel (Carmarthen, E.)|
|Cotton, Sir H. J. S.||Levy, Sir Maurice||Thompson, J. W. H. (Somerset, E.)|
|Craig, Herbert J. (Tynemouth)||Lewis, John Herbert||Toulmin, George|
|Crosfield, A. H.||Lupton, Arnold||Verney, F. W.|
|Crossley, William J.||Lynch, H. B.||Vivian, Henry|
|Davies, David (Montgomery Co.)||McKenna, Rt. Hon. Reginald||Wadsworth, J.|
|Davies, Ellis William (Eifion)||M'Micking, Major G.||Wason, John Cathcart (Orkney)|
|Duckworth, Sir James||Mallet, Charles E.||Waterlow, D. S.|
|Duncan, C. (Barrow-in-Furness)||Marnham, F. J.||White, J. Dundas (Dumbartonshire)|
|Duncan, J. Hastings (York, Otley)||Massie, J.||White, Sir Luke (York, E.R.)|
|Edwards, A. Clement (Denbigh)||Middlebrook, William||Wiles, Thomas|
|Edwards, Sir Francis (Radnor)||Moiteno, Percy Alport||Wilkie, Alexander|
|Elibank, Master of||Mond, A.||Williamson, Sir A.|
|Erskine, David C.||Montagu, Hon. E. S.||Wills, Arthur Walters|
|Essex, R. W.||Murray, Capt. Hon. A. C. (Kincard.)||Wilson, Hon. G. G. (Hull, W.)|
|Esslemont, George Birnie||Nussey, Sir Willans||Wilson, Henry J. (York, W.R.)|
|Everett, R. Lacey||Nuttall, Harry||Wilson, J. W. (Worcestershire, N.)|
|Falconer, James||O'Donnell, C. J. (Walworth)||Wood, T. M'Kinnon|
|Findlay, Alexander||Pearson, W. H. M. (Suffolk, Eye)||Yoxall, Sir James Henry|
|Foster, Rt. Hon. Sir Walter||Philipps, Col. Ivor (Southampton)|
|Ginnell, L.||Philipps, Owen C. (Pembroke)||TELLERS FOR THE AYES.—Mr. Fuller and Mr. Gulland.|
|Glendinning, R. G.||Pollard, Dr. G. H.|
|Arkwright, John Stanhope||Gibbs, G. A. (Bristol, West)||MacCaw, Wm. J. MacGeagh|
|Bowles, G. Stewart||Gooch, Henry Cubitt (Peckham)||Mason, James F. (Windsor)|
|Cave, George||Gretton, John||Nicholson, Wm. G. (Petersfield)|
|Cecil, Evelyn (Aston Manor)||Guinness, Hon. W. E. (B. S. Edmunds)||Starkey, John R.|
|Craig, Charles Curtis (Antrim, S.)||Hamilton, Marquess of||Staveley-Hill, Henry (Staffordshire)|
|Dickson, Rt. Hon. C. Scott||Helmsley, Viscount|
|Douglas, Rt. Hon. A. Akers-||Hills, J. W.|
|Faber, George Denison (York)||Hope, James Fitzalan (Sheffield)||TELLERS FOR THE NOES.—Sir H. Craik and Mr. Mitchell-Thomson.|
|Forster, Henry William||Joynson Hicks, William|
|Gardner, Ernest||Lane-Fox, G. R.|
§ Mr. HALDANE moved to leave out of paragraph (a) the words "and chargeable with" ["and chargeable with Estate Duty"], and to insert instead thereof the words "in respect of which."
§ Mr. HALDANE
This is really to make a further exemption. Under the Finance Act of 1894 estates under £1,000 were exempted, and if the drafting of the Bill stood as it is they would not be exempt. The Chancellor of the Exchequer takes the view that this would not be just, and he put down the Amendment to save that exemption.
§ Question, "That the words proposed to be left out stand part of the Bill," put, and negatived.
§ Words proposed there inserted in the Bill.
§ Drafting Amendments also made.
§ Mr. HALDANE moved, in paragraph (a), after the word "interest" ["in which the deceased never had an interest"], to insert the words "and property of which the deceased never was competent to dispose, and which on his death passes to persons other than the husband or wife, or a lineal ancestor or descendant of the deceased."
§ The effect of that will be to give an additional exemption. This is a proviso in which we say duty is not to be paid on certain estates—that is to say, an estate which does not exceed £15,000. There might be other property over which the deceased had no competency to deal. The exemption is a little too narrow as it stands now, and therefore we propose to alter it by putting in the words which I now propose.
§ Mr. CAVE moved, as an Amendment to the proposed Amendment, to leave out the words "and which on his death passes to persons other than the husband or wife, or a lineal ancestor or descendant of the deceased."
§ I venture to suggest that the Amendment proposed does not go quite far enough or cover the point which the Secretary of State for War desires to cover. Let me put a case to raise the exact point. Supposing a man's own estate is small, but that apart from that 1118 he is tenant for life of a large estate, and that upon his death that estate, under a settlement over which he has no power, goes to his eldest son, if the Amendment passes in the form in which it has been moved the effect would be that the younger children and the widow would not get the benefit of this exemption. They would have to pay the duty under this Clause. In that case there is the same moral claim to protection as in the case where there is nothing but a small estate of under £15,000.
§ Mr. EVELYN CECIL seconded the Amendment to the proposed Amendment.
§ Mr. HALDANE
When this came before the Committee we framed the Amendment we had here to meet what was asked for and the case put by the hon. and learned Member for Lanark (Mr. Mitchell-Thomson). The hon. and learned Member for Kingston (Mr. Cave) puts a still further case. The variations are innumerable, but the Government feel that they have gone as far as they could in meeting the case which was put by the hon. and learned Member for Lanark. I do not think they could go as far as the further case put by the hon. and learned Member for Kingston, which would exempt a great deal not intended to be exempted.
§ Mr. MITCHELL-THOMSON
I am grateful to the Government for meeting us so far as they have done in their Amendment, but I am bound to say that I think the case put by the hon. and learned Member for Kingston is a better case than the case I put, and if I had thought of it I should have put it.
§ Amendment to proposed Amendment negatived.
§ Proposed words there inserted in the Bill.
§ Drafting Amendments made.
§ Mr. MITCHELL-THOMSON moved, in Sub-section (4), to leave out the words "first succession under the disposition arises," and to insert instead thereof the words "disposition is made."
§ This Sub-section deals with three different cases. First, where the testator by whose will the legacy is given dies after 30th April, 1909; second, where the succession arises through devolution by law; and, third, that of a succession arising out of a disposition.
§ The only questions really of importance are the case of a will and the case of a disposition. You provide that this Act 1119 shall not be retrospective in the case of a will beyond 30th April of the present year. If, however, a man has made a disposition, the Act is to be retrospective to an extent apparently indefinite. The Secretary of State for War's defence of that was one purely of precedent. He referred to the Acts of 1853, 1889, and 1894, and I quite admit the force of his argument. But if the argument holds good in the case of a disposition, why not in the case of a will? If you make a definite date beyond which the Act cannot be retrospective in the case of a will, why this arbitrary distinction between successions under a will and successions under a disposition? We raised this point in Committee, but did not get an answer. I think it will be very difficult for the Secretary of State to find an answer, because I do not believe there is one.
§ Mr. J. W. HILLS formally seconded the Amendment.
§ Mr. HALDANE
The Clause deals with three cases. The first is the case where the legacy simply arises when it is a gift under a will. The next is the case of an intestate. In both those case you have a simple succession on death. In the third case you have a succession under a disposition which limits the property, so that on death it shall descend. It makes no other difference. In substance there is no difference between the three cases. Death has to take place after the Bill becomes an Act and comes into operation. Therefore, the Chancellor of the Exchequer has principle on his side. Now turn to the precedents. My right hon. Friend is a very conservative Chancellor of the Exchequer in the way in which he has followed illustrious precedents. He is following here what Mr. Gladstone did as Chancellor of the Exchequer in 1853, what Mr. Childers did in 1881, what Lord Goschen did in 1889, and what Sir William Harcourt did in 1894. I am not certain that I cannot also pray in aid Mr. Pitt in his Legacy Act of 1783. My right hon. Friend being so strongly intrenched both in principle and in precedent, I should be very sorry if he gave way to the revolutionary views of the hon. and learned Gentleman opposite.
§ Amendment negatived.