HC Deb 13 September 1909 vol 10 cc1861-89

For the purpose of any claim to relief from Estate Duty under Sub-section (2) of Section five on Sub-section (1) of Section twenty-one of the principal Act, in the ease of persons dying on or after the thirtieth day of April nineteen hundred and nine, payment of or liability to duty, whether the payment was made or the liability attached before, on, or after that date, shall not be deemed to be a payment of or liability to duty in respect to settled property if the payment was made or the liability attached in respect of an interest in expectancy in any property and on the death of a person (other than the settlor) who—

  1. (a) was at the time of his death competent to dispose of the property; or
  2. (b) in the case of a claim to relief under Sub-section (2) of Section five of the principal Act, had been at any time during the continuance of the settlement competent to dispose of the property, and if on his death subsequent limitations under the settlement take effect in respect of the property, was sui juris at the time of his death, or had been sui juris at any time, while so competent to dispose of the property; or
  3. (c) in the case of a claim to relief under Sub-section (1) of Section twenty-one of the principal Act, had been at any time since the will or disposition by which the settlement was made took effect, competent to dispose of the property.

Mr. PRETYMAN

On a point of Order. The limitation which exists in the Clause as originally printed [from paragraph (a)] is a repetition of the limitation in the Resolution. The first part of the Resolution clearly covers the purport of the first part of the Clause. I need not read it; the Clause is so simple and easy to understand that I am sure that hon. Members will appreciate it at once. But the last part of the Resolution, after "(other than the settlor)," reads "who was at the time of his death or had been at any time during the continuance of the settlement competent to dispose of the settled property." These are evidently intended to be limiting words, and words to exactly the same effect are inserted in the Clause. Therefore if the removal of these words removes the limitation, it is obvious that the Clause will not be covered by the Resolution. If these words are not a limitation they have no meaning; but I can hardly conceive that the Government draughtsman, under the guidance of the Chancellor of the Exchequer and the Secretary of State for War, would have inserted these words unless they had a meaning. Therefore, if the words are limiting words and have any meaning, by their removal the Clause is clearly extended beyond the terms of the Resolution. If that is so, a new Resolution will be required in order to cover the Clause in its new form.

The CHAIRMAN

I think these words, in the Resolution are rather a recital of. the present position of the law than an operative provision. But independently of that question—and I am much obliged to the hon. and gallant Member for giving me notice of the point of order—the whole matter is extremely complicated, and I could hardly have decided it otherwise—these words inserted in the Clause are not in the original Resolution. The words are "in respect of an interest in expectancy in any property and." Now these words, I think, cannot make a case chargeable which would not be chargeable under the Resolution; I mean, if any case would be chargeable under these words which would not be chargeable under the Resolution clearly it would not be in order to leave out the subsequent words. But where an interest in expectancy exists with no power to dispose no duty is now payable. Where it exists with a power to dispose then the Resolution covers the exemption of these two exceptions. Therefore I think these words can be left out on account of the new words which are put in.

Mr. PRETYMAN

I do not wish to argue the point any further. So far as I can understand the Clause, or the original proposal, you, Sir, if I may say so respectfully, have dealt with it in a correct way. It is a very difficult thing. But I will be glad if the right hon. Gentleman will tell us what the words originally meant. He carefully avoided telling us why the words were there if there was no limitation.

Mr. HALDANE

In the Clause as it now stands in the Bill the words "in expectancy" were inserted in the original draft. These words being in it does not matter whether the person entitled to expectancy is competent to dispose or not. The words of the Resolution are words purporting to cut down the exception in favour of the subject, which the Courts, in interpretation of the Act of Parliament, have made in two very well-known cases. The purpose of the Resolution was to limit the exception which the Courts had established—that is to say, to impose a further charge upon the subject. The purpose of the insertion of the words "in expectancy" is to limit the cutting down, or, in other words, to give a greater advantage to the subject than the Resolution contemplated. The words which follow (a) and (b) at the bottom of the page, to which the hon. and gallant Gentleman referred, were words which were appropriate words. Now when we put in the words "in expectancy" it does not matter whether it is competent to dispose of or not. It is all in favour of the subject, for enlarging the exception in favour of the subject, and for cutting down the limitation which the Resolution sought to impose.

Mr. J. W. HILLS

moved in Sub-section (1) to leave out the words "or Subsection (1) of Section twenty-one."

If I understand this obscure Clause, it limits the exemption that settled property enjoys now from the State. Settled property is exempt under two heads, firstly, under Sub-section (2) of Section 5 of the Act of 1894; and secondly, where there is a settlement before the Act of 1894, and the property, under that settlement, has paid the old Probate Duty of 3 per cent., it is free from Estate Duty if the testator died before the commencement of the Act of 1894. I am afraid this is very complicated. Two classes of property are exempt from Estate Duty—settled property once it paid the Estate Duty until the settlement came to an end, and all settled property before the year 1894 and which paid the old Probate Duty is also exempt. This Section proposes to cut down both these exemptions in this way. It says where Estate Duty is. only being paid on an interest in expectancy the property shall not be exempt. Perhaps I can best explain the meaning by giving a concrete case.

A man happened to marry a lady who had a large sum of money, and she, by a quite reasonable and proper precaution, insisted, upon a settlement, and also that after the life interest of her husband the property should come back to her. The property was therefore settled upon the husband for life, after which it was to go back to the wife. She died first, and Estate Duty was charged upon her expectancy. The whole corpus of the settled property did not pay Estate Duty. The property charged with the estate was the value of the settled property less the value of the life interest, and so the duty paid was on the expectancy. When the husband died later on the Revenue claimed duty upon the whole property. The Courts said "No; as soon as you pay duty upon the property, even though it is only expectancy, it franks the property for the rest of the settlement." Now the Chancellor proposes to remove that exemption. The case of a man who had made a settlement before the Act of 1894, and thereby franked the property from further duty, is very much the same as the first case. In both cases the duty was paid in interest in expectancy, and that freed the whole property from duty. I wish to get at the second limitation. I can conceive quite a strong reason why, I think, in the first case the Revenue does suffer, and I think it suffers perhaps in a way it was never intended it should suffer. In the case I gave a moment ago if the husband died first Estate Duty would have been payable on his death and upon the death of the wife also, but because she died first—I suppose it was a matter of chance—the Revenue only got the single Estate Duty. I do not think the same reason applies to the second case. In the one case the exemptions under Sub-section 1 of Section 21 are much fewer than in the other, and are becoming less every year. I do not think you lose much by giving up this provision. The Clause as drafted does not really remove the exemption under Hub-section (1) of Section 21 of the principal Act, which says that no exemption from duty is to be made when you pay duty in respect of an interest in expectancy and on the death of a person who is not the settlor. The only way the exemption arises under Section (1) of Section 21 of the principal Act is that on death you paid your Probate Duty and therefore you were exempt. I do not see how the wording of this Section really meets the case cited, because in that case the duty is paid on the settlor's death, but here you say that the exemption is removed when you pay in respect of an interest in expectancy in any property and on the death of a person who is not the settlor. The two provisions are rather artificially drawn together, and I do not think they quite join. For these reasons I think the Government would do well to accept this Amendment.

Mr. HALDANE

I think if hon. Members knew how difficult it is to deal with this point they would have appreciated the real lucidity of the example given by the hon. and learned Member, who was absolutely fair in his point. The question he raises comes under Section 21, Subsection (1) of the old Finance Act of 1894, and I think I shall be able to show that this proposal is on the same footing. Our proposal deals with a smaller class of cases, but they are dealt with on the same footing as those under Section 5 (2) of the Act of 1894, and the ground is very narrow indeed which divides me from the hon. and learned Member. When the Finance Act of 1894 was passed it established the right to make the exemption in the case of settlement to a great extent. When property was limited by a deed to A for life and afterwards to B for life, and then to C in fee, on the death of A the duty is paid. But the duty franks the death of B, franks everything until the death of C. That is what is meant by the words of Section 5. Then came Section 21, which said the same result should ensue where, not the Estate Duty, but the old Probate Duty had been paid in cases of the kind of settlement referred to in Section 5. The words are exactly and precisely the same. It was intended that if duty was paid on A's dearth B should be free and no duty should be payable when C succeeded. Nobody seemed to have thought of the case of C dying during A's lifetime. His reversion is of very small value. The duty was paid on that small reversion in-stead of on the full principal value as it would if B had died. The hon. Member deals with that view under Section 5, but there is no difference between that case, either in substance or technically, and the second case, which was the only one he questioned. The second case is that where a person died before 1894 and Probate Duty had been paid. If probate had once been paid on A's death, no duty was payable on B's death or until the death of 0, who was competent to dispose. If C died in the lifetime of A a very small duty would be paid to the State, instead of the full duty, and, as the Courts have interpreted the law, the State loses the duty on B's death. The Courts treat Sections 21 and 5 as being on precisely and identically the Same footing, and consequently the Government have put them on the same footing. I believe cases under Section 21 are getting fewer, but on the other hand they affect immediate revenue and therefore we could not consent to put them on a different footing.

Sir E. CARSON

I feel a great deal of hesitation in trying to add any contribution whatsoever to this difficult subject which may be of any assistance to the House, but at the same time it is a matter which lawyers hold to be of great importance in the settlement of estates. The broad result of the attempted Amendment by the Government is to take away a considerable amount of the advantages which were given by the Act of 1894 in the case of settlements. Everyone who was in the House at the time and followed the Debates will recollect that Sir William Harcourt, in introducing the Bill, claimed to have given great advantages to settled property.

I need not go into the reasons why. But he claimed to give considerable advantages to certain property, and the chief advantage he gave was this, that when once in the course of settlement the Death Duty was paid on the whole value of the estate, then the duty was not to again become payable until the estate fell into the hands of somebody with complete disposition of it. First we doubled the Settlement Duty and now by this Section we are going to cut down the benefits of the settlement. That is the result of the two Sections taken together. I agree with the right hon. Gentleman that there is really no point for argument on this Section. Although there may be some difference, there is no difference between Sub-section (2) and the one moved to be omitted by my hon. and learned Friend. It is quite true that the Clause to which my hon. and learned friend refers in his Amendment is a diminishing matter, because it refers to the Probate Duty payable before the Act of 1894–5, and is therefore from day to day passing out of existence, but the principle is really the same on the two Amendments. Let us try and see what it is. If you settle the property on A and leave it to B, C having the expectancy, the right hon. Gentleman says that should the person with expectancy (that is C) die before the tenants for life, the latter, when they come to pay the Death Duty do not pay on the whole estate because they deduct the value of the intervening or prior life. That is so, because when the life interest fell in there was no duty payable, and of the settlement there was no duty payable on the estate at all. But what does the right hon. Gentleman want us to do now? He wants, when the expectancy falls in, they should pay a part. Yes, but when the life estate falls in, you pay the duty on the life estate.

If you are to pay on the full expectancy and on the falling in on the value of the life which you have deducted, then you will have paid on the whole value of the estate at one time of the existence of the estate. This Amendment goes further, because the expectancy may be very nearly the value of the whole estate. For instance, the life estate may be very old, and the expectancy may be an immediate one. Then again, on the falling in of the life estate you are asking the taxpayer to pay not merely what has been deducted, but the whole value. 'That is really, as I understand it, the whole matter. There are two Amendments down on the Paper, which put the matter exactly as it ought to be put, if you want really to arrive at what is the upshot of this Debate. If these Amendments were accepted you would not be having what was always contemplated, the payment on the full value of the estate during existing lives, but if this Amendment is carried in the form in which it is, you will have not merely that, but that which will amount almost to a double duty, which was never contemplated, and it becames all the more oppressive now, when you have doubled the Settlement Duty which would have had to be paid in relation to these very matters.

Mr. HALDANE

The right hon. Gentleman has very clearly defined the point. I accept his view that the difference between us is this. We are claiming another duty. What was intended was this, as we see by the Act, that if the order of death was A, B, C, you would get the duty on A's death, no duty on B's, but another duty on C's. If by accident C dies in the lifetime of A, then you lose the duty on A's death, and you lose the duty on B's death, that is to say, you lose the whole duty. If the sequence is A, B, C, you get duty on A and C, but if the sequence of death is C, A, B, then you get no duty on A's death. The right hon. Gentleman has quite fairly denned the issue between the two sides of the House, and it is on that the Amendment turns.

Sir E. CARSON

May I ask as to the meaning of the words of the Clause "other than the settlor." Is that to leave the law as it is?

Mr. HALDANE

In a sense "Yes." We think it is substantial justice that no man should be taxed on his own property passing, and therefore we have put in those words "other than the settlor" in order to give exemption in that case.

Mr. CAVE

I think we have now got something like a clear issue. Surely the intention of the Act of 1894 is that when property is settled in this way, and Settlement Estate Duty is paid, the estate shall be franked until the settlement comes to an end and the property comes into the possession of someone absolutely entitled. Apply that to the case of property settled by will on A for life, and then on B. You have paid Settlement Estate Duty. On A's death, it goes to B, and it is not until B. dies that a further Estate Duty accrues. No further Estate Duty accrues until the happening of the last of the two events—namely, the deaths of A arid B. Now take the other event for which we are providing. B happens to die first, and A dies afterwards. As the law now stands, again you do not get the second duty until the happening of the last of the two events—namely, the death of the survivor of A and B. That is a perfectly fair result, and it corresponds exactly with the first case, because in the other case you wait for the last event to pay your second duty. The Government are now providing in the second case that on the death of C you shall pay, not the whole duty, I agree, but what may be a substantial part of it. But on the happening of the second event—the death of A—you pay the whole duty over again. You are imposing on the estate an extra Estate Duty, which will make an exceedingly heavy burden. Everyone has said to-day that where deaths occur in succession on an estate of this kind, great hardship may accrue. By this provision you are increasing that hardship. There was a chance under the existing law of escaping the hardship for a time. You are taking away that chance. Is not the common sense of the matter this, that in a case where the reversioner dies first, the estate does not vest in anyone until the death of the first life tenant B? It is not until then that the estate really vests, and the settlement comes to an end, and therefore not until then should you pay the one duty in full. I adopt entirely the argument of the right hon. and learned Gentleman (Sir E. Carson), that as the law now stands the State gets rather too little because it does not get, in the case dealt with, the full Estate Duty. It only gets the Estate Duty less the value of the life interest, and I quite agree it would be fair to say that on the second death you shall get the balance, and that is the effect of the Amendment in my name. As matters stand you are imposing a very heavy extra liability, and it is a mere chance under this Clause whether the estate pays two duties or one. If A dies first it pays one. If B dies first it pays two. The effect of my proposal is that in either case it pays one full duty, and the proper duty upon the total value of the estate. With regard to the particular Amendment I quite agree that the cases are the same except in one respect. In this case C must have died at least fifteen years ago, and the parties who have been alive must have been acting under the law of 1894. I suggest that after fifteen years it is unfair to charge the Estate Duty. The man who is entitled to succeed has been relying en the old law, and there is that distinction between the two cases. Here you are going back fifteen years and changing the rate which has crystallised during that period. In that respect I think the Amendment has merit behind it, and I suggest that it might be accepted.

12.0 P.M.

Mr. BALFOUR

I am going to ask the Government a simple question. The hon. Member or North Paddington (Mr. Chiozza Money) pointed out that in the case of property owned n succession by several people who live for a short time, the Estate Duty paid in respect of that property would be very much greater than in the case of a property of equal value which only passed in forty years, and he admitted that the incidence of the duty is unequal and unfair. The attempt to avoid that was obvious in the Act of 1894. That may to a certain extent be avoided by the Clause giving the privilege which we have been discussing this afternoon. I understand that the Government, after considering the matter carefully, have come to the conclusion, on actuarial calculations, that the property under settlement got off too cheaply. I do not think it ought to get off cheaper than other property. It is agreed that, if we adopt the plan now proposed, it is in order to give some chance of equalising properties where deaths may occur in unduly rapid succession—that is to say, where the succession occurs in more than the average length of life in the settlement of the property. I entirely agree with my hon. and learned Friend that if, under the Settled Land Clauses, any special privileges are given to certain property, they should be abolished, but do not let us in abolishing them throw an extra burden on them in certain other eventualities. I think that would be unfair. I do not understand that to be the object of the Government, and the question I wish to ask them is this: Are they sure that in remedying what my hon. and learned Friend agrees is an undue privilege they are not imposing in other eventualities an undue burden? That is the real thing that they have got to convince us on. I do not think they have made that point clear. On this side of the House we do not wish to give an undue privilege to certain points, but let us be sure that we are not doing an injustice in certain contingencies. I am submitting now with great diffidence, as a non-legal Member of the House, what is the real thing to be aimed at, leaving it to the lawyers to tell me whether the two Clauses as now amended carry out that policy.

Mr. HALDANE

The right hon. Gentleman asked first about the 1 per cent. It was calculated on what was then supposed to be likely to be the rate of duty. The 2 per cent. does not frank the present scale of duty. In both cases the settled Estate Duty returns to the Crown less than would be returned if matters had been left alone. That has been carefully calculated.

Mr. BALFOUR

Even in exceptional cases I trust the Government to inform us accurately whether, if the order of death is not that of A, B, C in the illustration chosen, but B, C, A or C, A, B, what he says would equally apply?

Mr. HALDANE

I should be much more cautious about answering that. Our view is that C, A, B is an order that cannot be provided for. We are taking the duty upon A. That is the very purpose of the Clause. The calculation of which I have spoken is based on the natural order of things. But when you come to the exceptional, cases, I am not so sure, because our view is we should have lost the duty if they ought to pay on A's death, and for that reason I would not like to say that I am sure as to what the right hon. Gentleman asks about in these exceptional cases.

Mr. BALFOUR

On the general principle we are all agreed, but it ought not to matter whether the order is A, B, C, B, C, A, or C, A, B. Therefore, when the right hon. Gentleman tells me he is not quite sure on that point then the Government have not convinced me that the Clause is a fair Clause. They have not got to the bottom of the matter.

Mr. HALDANE

Taking the duty as it will work out, even with the Amendment, it will be under 6&½ per cent. The average Estate Duty under the old order of things was 4&¾ per cent., and 1 per cent. did frank. Similarly the 2 per cent. was to frank the 6&½ per cent. It may be that in individual cases, like C, A, B, there will be a difference, but making allowance for these cases not happening, as they will not happen under our Amendment, though the 2 per cent. will not frank the whole of the cases taken, it will do so on the average as I have put them now. In other words, 2 per cent. is calculated to be very much on the footing of 1 per cent.

Mr. AUSTEN CHAMBERLAIN

This is an extraordinary difficulty, and it has become a little more difficult for laymen, though it is being put into a shape in which they may venture to take some part in the discussion. My right hon. Friend's suggestion is that settled property ought to be treated exactly like the average of un-settled property. The advantage of a settlement was to make a large estate follow the average, which was the average of the whole of the other estates, and might not apply to any particular un- settled estate. The right hon. Gentleman said that even with the Amendments which the Government propose, the result would not be wholly attained, and that the settled estate would get off rather more cheaply than the unsettled estate. Therefore, as between settled and unsettled estates, the settled estates, I take it, are in a rather more favourable position.

Mr. BALFOUR

What about C, A, B?

Mr. HALDANE

C, A, B will not happen.

Mr. AUSTEN CHAMBERLAIN

The right hon. Gentleman has advanced in his objection further than he advanced in his statement.

Mr. HALDANE

I understood the right hon. Gentleman (Mr. Balfour) to put this case: Suppose the order of deaths were C, A, B, then would C, A, B be in the same position under the new state of things of 2 per cent. as before? I said I could not be sure about that, but I said, C, A, B, being eliminated, the whole of the case taken from the 2 per cent. would obtain.

Mr. AUSTEN CHAMBERLAIN

We have got to this actual point. We have been enquiring whether if the deaths followed in the order of C, A, B, the result would be the same as if they followed in the order of A, B, C. Now the right hon. Gentleman says "No, the result would not be the same." If you cannot make things fair as between unsettled estates and settled estates, is that any reason why you should introduce disparity between the treatment of settled property and unsettled property? You have two cases of settled property both exactly the same. In the one case if A or B dies before C, you get one rate of duty, and in the other case, if C dies before A and B you get a different duty. What is the justification? Surely the right hon. Gentleman will say that as a fair thing they ought to get the same duty. If you have got settled estate at 1 per cent. or at 2 per cent., as it is now, the assumption is that that is, roughly, going to balance settled property as against unsettled property, and, in order to find out whether it does or not, you assume the average duration of settlement. The average of settlement depends upon C living. In the greater majority of cases C will be the longest life, and the one who will be expected to live longest. If C dies before A and B the settlement will fall, and it is only in that case you are going to collect additional duty. I think that really strikes at the whole basis of the proposal of the Government, and that the only end which is being disclosed by these discussions lies in the proposals of my hon. and learned Friend the Member for Kingston, that whatever the

order of the death one full duty shall be paid, one and no more.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 171; Noes, 89.

Division No. 641.] AYES. [12.15 a.m.
Acland, Francis Dyke Haworth, Arthur A. Priestley, Sir W. E. B. (Bradford, E.)
Agnew, George William Hazel, Dr. A. E. W. Radford, G. H.
Allen, A. Acland (christchurch) Helme, Norval Watson Rainy, A. Rolland
Allen, Charles P. (Stroud) Henderson, Arthur (Durham) Rea, Rt. Hon. Russell (Gloucester)
Ashton, Thomas Gair Higham, John Sharp Rendall, Athelstan
Balfour, Robert (Lanark) Hobhouse, Rt. Hon. Charles E. H. Richards, Thomas (W. Monmouth)
Baring, Godfrey (Isle of Wight) Hogan, Michael Richards, T. F. (Wolverhampton, W.)
Barker, Sir John Holt, Richard Durning Ridsdale, E. A.
Barnard, E. B. Hooper, A. G. Roberts, Charles H. (Lincoln)
Barran, Sir John Nicholson Hope, John Deans (Fife, West) Roberts, G. H. (Norwich)
Beauchamp, E. Horniman, Emslie John Roberts, Sir J. H. (Denbighs.)
Beaumont, Hon. Hubert Howard, Hon. Geoffrey Robertson, Sir G. Scott (Bradford)
Berridge, T. H. D. Isaacs, Rufus Daniel Robinson, S.
Birrell, Rt. Hon. Augustine Jardine, Sir J. Robson, Sir William Snowdon
Black, Arthur W. Jones, Sir D. Brynmor (Swansea) Roch, Walter F. (Pembroke)
Boulton, A. C. F. Jones, Leif (Appleby) Roe, Sir Thomas
Bowerman, C. W. Jones, William (Carnarvonshire) Rogers, F. E. Newman
Brace, William King, Alfred John (Knutsford) Rose, Sir Charles Day
Bright, J. A. Laidlaw, Robert Rutherford, V. H. (Brentford)
Brunner, J. F. L. (Lanes., Leigh) Lambert, George Samuel, S. M. (Whitechapel)
Bryce, J. Annan Lamont, Norman Scarisbrick, Sir T. T. L.
Buckmaster, Stanley o. Layland-Barrett, Sir Francis Schwann, C. Duncan (Hyde)
Burns, Rt. Hon. John Lea, Hugh Cecil (St. Pancras, E.) Schwann, Sir C. E. (Manchester)
Buxton, Rt. Hon. Sydney Charles Levy, Sir Maurice Seely, Colonel
Byles, William Pollard Lewis, John Herbert Shackleton, David James
Carr-Gomm, H. W. Lloyd-George, Rt. Hon. David Sherwell, Arthur James
Cawley, Sir Frederick Lupton, Arnold Simon, John Allsebrook
Cherry, Rt. Hon. R. R. Lynch, H. B. Stanger, H. Y.
Clough, William Macdonald, J. R. (Leicester) Stanley, Hon. A. Lyulph (Cheshire)
Clynes, J. R. Maclean, Donald Stewart-Smith, D. (Kendal)
Cobbold, Felix Thornley Macnamara, Dr. Thomas J. Strachey, Sir Edward
Collins, Stephen (Lambeth) MacVeagh, Jeremiah (Down, S.) Strauss, E. A. (Abingdon)
Collins, Sir Wm. J. (St. Pancras, W.) M'Laren, Sir C. B. (Leicester) Summerbell, T.
Cooper, G. J. M'Laren, H. D. (Stafford, W.) Taylor, John W. (Durham)
Corbett, C. H. (Sussex, E. Grinstead) Maddisen, Frederick Tennant, H. J. (Berwickshire)
Cornwall, Sir Edwin A. Mallet, Charles E. Thompson, J. W. H. (Somerset, E.)
Cotton, Sir H. J. S. Markham, Arthur Basil Thorne, G. R. (Wolverhampton)
Davies, Timothy (Fulham) Marnham, F. J. Trevelyan, Charles Philips
Davies, Sir W. Howell (Bristol, S.) Massie, J. Verney, F. W.
Dewar, Arthur (Edinburgh, S.) Masterman, C. F. G. Vivian, Henry
Dickinson, W. H. (St. Pancras, N.) Middlebrook, William Ward, W. Dudley (Southampton)
Dobson, Thomas W. Morgan, J. Lloyd (Carmarthen) Wason, Rt. Hon. E. (Clackmannan)
Dunne, Major E. Martin (Walsall) Morrell, Philip Wason, John Cathcart (Orkney)
Erskine, David C. Morse, L. L. White, Sir George (Norfolk)
Essex, R. W. Myer, Horatio White, J. Dundas (Dumbartonshire)
Esslement, George Blrnie Newnes, F. (Notts. Bassetlaw) White, Sir Luke (York, E.R.)
Evens, Sir Samuel T. Nicholson, Charles N. (Doncaster) Whittaker, Rt. Hon. Sir Thomas P.
Everett, R. Lacey Norman, Sir Henry Wiles, Thomas
Ferguson, R. C. Munro Nussey, Sir Willans Williams, J. (Glamorgan)
Fuller, John Michael F. Nuttall, Harry Williams, W. Llewelyn (Carmarthen)
Fullerton, Hugh O'Brien, K. (Tipperary, Mid) Wilson, J. W. (Worcestershire, N.)
Gill, A. H. O'Grady, J. Wilson, P. W. (St. Pancras, S.)
Glover, Thomas Parker, James (Halifax) Wilson, W. T. (Westhoughton)
Gooch, George Peabody (Bath) Partington, Oswald Winfrey, R.
Haldane, Rt. Hon. Richard B. Pearce, Robert (Staffs, Leek) Wood, T. M'Kinnon
Harcourt, Rt. Hon. L. (Rossendale) Pickersgill, Edward Hare
Harcourt, Robert V. (Montrose) Pointer, J. TELLERS FOR THE AYES.—Mr.
Harmsworth, Cecil B. (Worcester) Ponsonby, Arthur A. W. H. Joseph Pease and Captain Norton.
Harmsworth, R. L. (Caithness-shire)
NOES.
Acland-Hood, Rt. Hon. Sir Alex. F. Bridgeman, W. Clive Courthope, G. Loyd
Anson, Sir William Reynell Carlile, E. Hildred Craig, Charles Curtis (Antrim, S.)
Balcarres, Lord Carson, Rt. Hon. Sir Edward H. Craig, Captain James (Down, E.)
Baldwin, Stanley Castlereagh, Viscount Dalrymple, Viscount
Balfour, Rt. Hon. A. J. (City, Lond.) Cave, George Dickson, Rt. Hon. C. Scott-
Banbury, Sir Frederick George Cecil, Evelyn (Aston Manor) Doughty, Sir George
Banner, John S. Harmood- Chamberlain, Rt. Hon. J. A. (Worc'r.) Douglas, Rt. Hon. A. Akers-
Baring, Capt. Hon. G. (Winchester) Chaplin, Rt. Hon. Henry Faber, George Denison (York)
Barrie, H. T. (Londonderry, N.) Clive, Percy Archer Fell, Arthur
Bowles, G. Stewart Coates, Major E. F. (Lewisham) Fletcher, J. S.
Forster, Henry William King, Sir Henry Seymour (Hull) Salter, Arthur Clavell
Foster, P. S. Lane-Fox, G. R. Scott, Sir S. (Marylebone, W.)
Gibbs, G. A. (Bristol, West) Long, Col. Charles W. (Evesham) Stanier, Beville
Gordon, J. Lyttelton, Rt. Hon. Alfred Starkey, John R.
Guinness, Hon. W. E. (B. S. Edm'ds.) Mason, James F. (Windsor) Staveley-Hill, Henry (Staffordshire)
Haddock, George B. Meysey-Thompson, E. C. Talbot, Lord E. (Chichester)
Hamilton, Marquess of Moore, William Valentia, Viscount
Hardy, Laurence (Kent, Ashford) Morpeth, Viscount Walker, Col. W. H. (Lancashire)
Harris, Frederick Leverton Nicholson, Wm. G. (Petersfield) Walrond, Hon. Lionel
Hay, Hon. Claude George Pease, Herbert Pike (Darlington) Warde, Col. C. E. (Kent, Mid)
Hermon-Hodge, John Peel, Hon. W. Robert Wellesley Williams, Col. R. (Dorset, W.)
Hill, Sir Clement Percy, Earl Wilson, A. Stanley (York, E.R.)
Hope, James Fitzlan (Sheffield) Pretyman, E. G. Wyndham, Rt. Hon. George
Hunt, Rowland Renwick, George Younger, George
Joynson-Hicks, William Roberts, S. (Sheffield, Ecclesall)
Kerry, Earl of Ronaldshay, Earl of TELLERS FOR THE NOES.—Mr.
Keswick, William Rutherford, Watson (Liverpool) J. W. Hills and Mr. Joynson Hicks.
Mr. SAMUEL ROBERTS

moved in Subsection (1) to leave out the word "whether" ["liability to duty, whether the payment was made"] and to insert instead thereof the word "where."

I hope that the Government will see their way to accept this short Amendment. The right hon. Gentleman has told us the reason the Government wish to alter the law, and the Chancellor of the Exchequer in his Budget speech told us that the law as interpreted was not the intention of the Act, of 1894. It is really to prevent the operation of the Act being retrospective. In the case of A, B and C that has been given to us by the Secretary for War, my Amendment is that C must die after the 30th April of this year. If otherwise, great injustice might be done, for C's representatives might have over the property, the reversion, or undertaken their arrangements on the understanding, as the law was then, that no further Estate Duty was to be paid. My Amendment is that if the law is to be altered—and the last division I suppose has settled that point—it ought not to do an injustice by being retrospective. C's death must occur after the alteration of the law.

Mr. HALDANE

We cannot accept this Amendment. In the case defined, A had no right to expect C's death in his lifetime.

Mr. S. ROBERTS

I was dealing with C's representatives.

Mr. HALDANE

But C is not dead. Otherwise C's representatives would have to pay.

Mr. S. ROBERTS

C's representatives have paid.

Mr. CAVE

The case is simply this. The estate has been settled on A for life, with remainder to C. C has died, and the reversion on the death of A has become vested in D. The point my hon. Friend makes is this. As the matter now stands, D has had reversion free from any further Estate Duty. That is the law as it stands; he has made his arrangements, upon that basis; he will come into a net estate when the present life tenant dies. You are now going to change all that, and you say when the present life-tenant dies, the new man will have to pay large estate duties. In that way you are making the duty retrospective. You are, as has been said, taking a chunk out of the estate on this reversion. You make him pay something he has hitherto not been required to pay. I quite agree that when the reversion is sold you are going to save the purchaser by a new Clause. But if there is no sale, you are going to make the duty retrospective by a new law.

Mr. HALDANE

What we are doing is to make clear what the Resolution says—namely, that there should be a duty on the death of A according to the original intention of the settlement.

Mr. PRETYMAN

It is clear you are going to make it retrospective. Under the present law you may have made a bargain with the State and the State may have taken the money and put it into its pocket, and you may have sold to someone else, and the State comes down and says that, although the bargain occurred and the money has been paid to the State we are going to take this money retrospectively.

Mr. HALDANE

Under the Act of 1894 that was done wholesale in the case of the Succession Duties. In the Act of 1894 there was a Clause for the protection of purchasers and mortgagees. That is right enough, because mortgagees and purchasers are strangers dealing with the property, but in the case of settled property we dealt with the matter in retrospect just as much under the Act of 1894 as now.

Mr. S. ROBERTS

The right hon. Gentleman has not answered my question. If C dies before the 30th April this year, the people who stand in C's shoes take the property on the understanding that there will be no further Estate Duty to be paid. My Amendment says that if C dies before the 30th April, the people who stand in his shoes shall not be liable to second Estate Duty.

Mr. HALDANE

The hon. member means the duty paid on A's death. It is the intention of the Clause to impose the duty on A's death.

Question put, "That the word 'whether' stand part of the Clause."

The Committee divided: Ayes, 155; Noes, 71.

Division No. 642.] AYES. [12.35 a.m.
Acland, Francis Dyke Hazel, Dr. A. E. W. Priestley, Sir W. E. B. (Bradford, E.)
Agnew, George William Helme, Norval Watson Radford, G. H.
Allen, A. Acland (Christchurch) Higham, John Sharp Rea, Rt. Hon. Russell (Gloucester)
Allen, Charles P. (Stroud) Hobhouse, Rt. Hon. Charles E. H. Rendall, Athelstan
Ashton, Thomas Gair Hogan, Michael Richards, Thomas (W. Monmouth)
Balfour, Robert (Lanark) Holt, Richard Durning Richards, T. F. (Wolverhampton, W.)
Baring, Godfrey (Isle of Wight) Hooper, A. G. Ridsdale, E. A.
Barker, Sir John Hope, John Deans (Fife, West) Roberts, Charles H. (Lincoln)
Barnard, E. B. Horniman, Emslie John Roberts, G. H. (Norwich)
Barran. Sir John Nicholson Howard, Hon. Geoffrey Roberts, Sir J. H. (Denbighs)
Beauchamp, E. Isaacs, Rufus Daniel Robertson, Sir G. Scott (Bradford).
Beaumont, Hon. Hubert Jones, Sir D. Brynmor (Swansea) Robinson, S.
Berridge, T. H. D. Jones, Leif (Appleby) Robson, Sir William Snowdon
Birrell, Rt. Hon. Augustine Jones, William (Carnarvonshire) Roch, Walter F. (Pembroke)
Black, Arthur W. King, Alfred John (Knutsford) Roe, Sir Thomas
Bowerman, C. W. Laidlaw, Robert Rogers, F. E. Newman
Brace, William Lambert, George Rutherford, V. H. (Brentford)
Bright, J. A. Lamont, Norman Samuel, S. M. (Whitechapel)
Brunner, J. F. L. (Lanes., Leigh) Layland-Barratt, Sir Francis Scarisbrick, Sir T. T. L.
Bryce, J. Annan Lea, Hugh Cecil (St. Pancras, E.) Seely, Colonel
Buckmaster, Stanley o. Levy, Sir Maurice Sherwell, Arthur James
Burns, Rt. Hon. John Lewis, John Herbert Simon, John Allsebrook
Byles, William Pollard Lloyd-George, Rt. Hon. David Stanger, H. Y.
Carr-Gomm, H. W. Lupton, Arnold Stanley, Hon. A. Lyulph (Cheshire))
Cherry, Rt. Hon. R. R. Macdonald, J. R. (Leicester) Stewart-Smith, D. (Kendal)
Clough, William Maclean, Donald Strachey, Sir Edward
Clynes, J. R. Macnamara, Dr. Thomas J. Strauss, E. A. (Abingdon)
Cobbold, Felix Thornley MacVeagh, Jeremiah (Down, S.) Summerbell, T.
Collins, Sir Vim. J. (St. Pancras, W.) M'Laren, Sir C. B. (Leicester) Taylor, John W. (Durham)
Cooper, G. J. M'Laren, H. D. (Stafford, W.) Tennant, H. J. (Berwickshire)
Corbett, C. H. (Sussex, E. Grinstead) Maddison, Frederick Thompson, J. W. H. (Somerset, E.)
Cornwall, Sir Edwin A. Mallet, Charles E. Thorne, G. R. (Wolverhampton)
Cotton, Sir H. J. S. Markham, Arthur Basil Trevelyan, Charles Philips
Davies, Timothy (Fulham) Marnham, F. J. Verney, F. W.
Davies, Sir W. Howell (Bristol, S.) Massie, J. Vivian, Henry
Dewar, Arthur (Edinburgh, S.) Masterman, C. F. G. Ward, W. Dudley (Southampton)
Dickinson, W. H. (St. Pancras, N.) Middlebrook, William Wason, Rt. Hon. E. (Clackmannan)
Dobson, Thomas W. Money, L. G. Chiozza Wason, John Cathcart (Orkney)
Dunne, Major E. Martin (Walsall) Morrell, Philip White, Sir George (Norfolk)
Erskine, David C. Morse, L. L. White, J. Dundas (Dumbartonshire)
Essex, R. W. Myer, Horatio White, Sir Luke (York, E.R.)
Esslemont, George Birnie Newnes, F. (Notts, Bassetlaw) Whittaker, Rt. Hon. Sir Thomas P.
Evans, Sir Samuel T. Nicholson, Charles N. (Doncaster) Wiles, Thomas
Everett, R. Lacey Norman, Sir Henry Williams, J. (Glamorgan)
Fuller, John Michael F. Nussey, Sir Willans Williams, W. Llewelyn (Carmarthen)
Fullerton, Hugh Nuttall, Harry Wilson, J. W. (Worcestershire, N.)
Glover, Thomas O'Brien, K. (Tipperary, Mid) Wilson, W. T. (Westhoughton)
Gooch, George Peabody (Bath) Parker, James (Halifax) Winfrey, R.
Haldane, Rt. Hon. Richard B. Partington, Oswald Wood, T. M'Kinnon
Harcourt, Rt. Hon. L. (Rossendale) Pearce, Robert (Staffs, Leek)
Harcourt, Robert V. (Montrose) Pickersgill, Edward Hare TELLERS FOR THE AYES.—Mr.
Harmsworth, R. L. (Caithness-shire) Pointer, J. Joseph Pease and Captain Norton.
Haworth, Arthur A. Ponsonby, Arthur A. W. H.
NOES.
Acland-Hood, Rt. Hon. Sir Alex. F. Beach, Hon. Michael Hugh Hicks Chamberlain, Rt. Hon. J. A. (Worc'r.)
Anson, Sir William Reynell Bowles, G. Stewart Chaplin, Rt. Hon. Henry
Balcarres, Lord Bridgeman, W. Clive Coates, Major E. F. (Lewisham)
Baldwin, Stanley Carlile, E. Hildred Courthope, G. Loyd
Banbury, Sir Frederick George Carson, Rt. Hon. Sir Edward H. Craig, Charles Curtis (Antrim, S.)
Banner, John S. Harmood- Castlereagh, Viscount Craig, Captain James (Down, E.)
Baring, Capt. Hon. G. (Winchester) Cave, George Dalrymple, Viscount
Barrie, H. T. (Londonderry, N.) Cecil, Evelyn (Aston Manor) Dickson, Rt. Hon. C. Scott-
Doughty, Sir George Joynson-Hicks, William Salter, Arthur Clavell
Douglas, Rt. Hon. A. Akers- Kerry, Earl of Scott, Sir S. (Marylebone, W.)
Faber, George Denison (York) King, Sir Henry Seymour (Hull) Stanier, Beville
Fell, Arthur Lane-Fox, G. R. Starkey, John R.
Forster, Henry William Long, Col. Charles W. (Evesham) Staveley-Hill, Henry (Staffordshire)
Foster, P. S. Lyttelton, Rt. Hon. Alfred Talbot, Lord E. (Chichester)
Gibbs, G. A. (Bristol, West) Mason, James F. (Windsor) Valentia, Viscount
Gordon, J. Meysey-Thompson, E. C. Walrond, Hon. Lionel
Guinness, Hon. W. E. (B. S. Edmunds) Moore, William Warde, Col. C. E. (Kent, Mid)
Haddock, George B. Morpeth, Viscount Williams, Col. R. (Dorset, W.)
Hamilton, Marquess of Nicholson, Win. G. (Petersfield) Wilson, A. Stanley (York, E.R.)
Hardy, Laurence (Kent, Ashford) Pease, Herbert Pike (Darlington) Wyndham, Rt. Hon. George
Hay, Hon. Claude George Peel, Hon. W. Robert Wellesley Younger, George
Hermon-Hodge, Sir Robert Percy, Earl
Hill, Sir Clement Pretyman, E. G. TELLERS FOR THE NOES.—Mr.
Hope, James Fitzalan (Sheffield) Ronaldshay, Earl of Samuel Roberts and Mr. J. W. Hills
Hunt, Rowland Rutherford, Watson (Liverpool)
Mr. HALDANE

moved to leave out the word "and" ["attached in respect of an interest in expectancy in any property and"].

Sir E. CARSON

I think before this Amendment is made we ought to have some explanation. It will, as I understand, Involve leaving out thirteen lines of the Bill. I think we really ought to know why they were put in. Did they get in by inadvertence; was it the fault of the draftsman, or was there an arrangement with anybody which was afterwards repudiated? Is it a case of the small bottle and the grocer over again? The Government seems to think it makes no matter whether they put in or strike thirteen lines out without the slightest reason. The Secretary of State for War earlier said that it was quite clear if the word "expectancy" had been in, these words would never have been there at all. He said that because somehow or other the words "interested expectancy" had appeared in some previous part, therefore these 13 lines should be omitted.

Mr. HALDANE

I agree that the right hon. and learned Gentleman is entitled to some explanation. It is a perfectly reasonable request. This Clause is now very different from what it was when it was originally drafted, and as the words "interested expectancy" were not then in it, it was felt right to include these lines. But as soon as we got them in by virtue of one of the Sub-sections, it was no longer necessary to draw a distinction between the case which was only an expectancy and that which was not. The omission of these words is, theoretically speaking, in favour of the subject, for it lessens the chance of taxation.

Mr. PRETYMAN

The explanation of the right hon. Gentleman is no doubt a very lucid one, but the unfortunate part is that the words "interested expectancy" were included in the original draft. What we asked the right hon. Gentleman to explain was why these words, which are now to be removed, appeared in the Clause. He tells us that they have been rendered unnecessary, and that in order to render them unnecessary the words "interested expectancy" were inserted. But why were they not taken out when these words were not in? I am afraid it rather looks as if this explanation had been discovered somewhat late in the day.

Mr. HALDANE

The words as they stand now will work all right. The omission of these lines will be theoretically in favour of the subject.

Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.

Amendment made: To leave out after the word "settlor" ["other than the settlor"] the words, "who—

  1. (a) was at the time of his death competent to dispose of the property; or
  2. (b) in the case of a claim to relief under Sub-section (2) of Section 5 of the principal Act, had been at any time during the continuance of the settlement competent to dispose of the property, and if on his death subsequent limitations under the settlement take effect in respect of the property, was sui juris at the time of his death, or had been sui juris at any time, while so competent to dispose of the property; or
  3. (c) in the case of a claim to relief under Sub-section (1) of Section 21 of the principal Act, had been at any time since the will or disposition by which the settlement was made took effect, competent to dispose of the property."
—[Sir W. Robson.]

Mr. JOYNSON-HICKS

moved after the words left in the Clause to add: "Provided that any property which shall be- come, chargeable to duty under this Section, and which but for this Section would not have been so chargeable, shall if liable to be aggregated with other property under the principal Act and the Acts amending the same instead of being so aggregated be treated as an estate by itself."

I do not propose to go over the A, B, and C, and the C, A, B again, but I would suggest to the Government that as they are proposing this new additional tax, and as it might be rather difficult to determine whether the aggregation is on the life of A or B, they should make it a separate estate and do without aggregation. It is perfectly clear that they are stopping up a gap in the old Act of 1894, and I think they might have two duties, one payable on the death of A and another on the death of B. That might be at different rates of duty according to the aggregation of the two estates of A and B. I think in those cases they might leave out the aggregation, as there is really no occasion for it.

Sir WILLIAM ROBSON

The hon. Member, I think, has not suggested any reason whatever why property generally which is made subject to the duty of this Clause should be separated from the rest of the assets so as not to come into aggregation. It would be making a totally unnecessary distinction in the case of property which is just as much property to be aggregated as any other property of the deceased. There is no reason for the exemption of this class of property from aggregation.

Mr. CLAVELL SALTER

I think, considering the way in which it is proposed to deal with certain property in this Clause, that this proposed indulgence might be granted. It is proposed to deal as it seems to me with very scant justice with the class of settled property to which this Clause is applied, and it is to be applied to a very

large number of cases, because we were told in the Budget speech that no less than a quarter of a million a year was to be realised by this proposed change. What is proposed to be done appears to me to be hardly fair and consistent. Settled property pays Estate Duty on fewer occasions than unsettled property. To counterbalance it pays through the Settlement Estate Duty at a higher rate, and what is proposed to be done is in all these cases to treat settled property for the purpose of determining the occasion when it is to be paid as though it were unsettled property, and when it comes to determine the rate at which it is to be paid then it is to be treated as settled property. This property ought not to be treated in this exceptional manner, to its disadvantage in both cases. It is to be treated as settled property for the purpose of making it pay at a higher rate than it otherwise would pay. It ought to be made to pay on those occasions which are proper only for settled property, and not unsettled property. It is most unfair to the owner of such property to tell him first that although his property is settled it is to be treated as unsettled property for the purpose of making him pay, and when he turns round and says: "If you are treating my property, though it is settled, as unsettled, I presume I shall pay at the rate appropriate to unsettled property," he is told it is settled property and he must pay at that rate. That is a most unfair and inconsistent way of dealing; with a large amount of settled property, and I think the very small indulgence which my hon. Friend has asked, which affects only the rate at which the duty is to be paid, might very reasonably be. conceded.

Question put, "That those words be there added."

The Committee divided: Ayes, 60; Noes, 137.

Division No; 643.] AYES. [1.0 a.m.
Acland-Hood, Rt. Hon. Sir Alex. F. Cave, George Guinness, Hon. W. E. (B. S. Edmunds)
Anson, Sir William Reynell Cecil, Evelyn (Aston Manor) Hamilton, Marquess of
Balcarres, Lord Coates, Major E. F. (Lewisham) Hardy, Laurence (Kent, Ashford)
Baldwin, Stanley Courthope, G. Loyd Hay, Hon. Claude George
Banbury, Sir Frederick George Craig, Charles Curtis (Antrim, S.) Hill, Sir Clement
Banner, John S. Harmood- Craig, Captain James (Down, E.) Hills, J. W.
Baring, Cant. Hon. G. (Winchester) Dalrymple, Viscount Hope, James Fitzalan (Sheffield)
Barrie, H. T. (Londonderry, N.) Dickson, Rt. Hon. C. Scott Hunt, Rowland
Beach, Hon. Michael Hugh Hicks Douglas, Rt. Hon. A. Akers- Kerry, Earl of
Bowles, G. Stewart Faber, George Denison (York) King, Sir Henry Seymour (Hull)
Bridgeman, W. Clive Forster, Henry William Lane-Fox, G. R.
Carlile, E. Hildred Foster, P. S. Long, Col. Charles W. (Evesham)
Carson, Rt. Hon. Sir Edward H. Gibbs, G. A. (Bristol, West) Lyttelton, Rt. Hon. Alfred
Castlereagh, Viscount Gordon, J. Mason, James F. (Windsor)
Moore, William Scott, Sir S. (Marylebone, W.) Williams, Col. R. (Dorset, W.)
Morpeth, Viscount Stanier, Beville Wilson, A. Stanley (York, E.R
Nicholson, Wm. G. (Petersfield) Starkey, John R. Wyndham, Rt. Hon. George
Pease, Herbert Pike (Darlington) Staveley-Hill, Henry (Staffordshire) Younger, George
Pretyman, E. G. Talbot, Lord E. (Chichester)
Roberts, S. (Sheffield, Ecclesall) Valentia, Viscount TELLERS FOR THE AYE.—Mr.
Ronaldshay, Earl of Warde, Col. C. E. (Kent, Mid) Joynson-Hicks and Mr. Salte
NOES.
Acland, Francis Dyke Helme, Norval Watson Priestley, Sir W. E. B. (Bradford, E.)
Agnew, George William Higham, John Sharp Radford, G. H.
Allen, A. Acland (Christchurch) Hobhouse, Rt. Hon. Charles E. H. Rendall, Athelstan
Allen, Charles P. (Stroud) Hogan, Michael Richards, Thomas (W. Monmouth)
Ashton, Thomas Gair Holt, Richard Durning Richards, T. F. (Wolverhampton, W.)
Balfour, Robert (Lanark) Hooper, A. G. Roberts, Charles H. (Lincoln)
Barnard, E. B. Horniman, Emslie John Robertson, Sir G. Scott (Bradford)
Barran, Sir John Nicholson Howard, Hon. Geoffrey Robinson, S.
Beauchamp, E. Isaacs, Rufus Daniel Robson, Sir William Snowdon
Berridge, T. H. D. Jones, Sir D. Brynmor (Swansea) Roch, Walter F. (Pembroke)
Black, Arthur W. Jones, Leif (Appleby) Roe, Sir Thomas
Bowerman, C. W. Jones, William (Carnarvonshire) Rogers, F. E. Newman
Brace, William King, Alfred John (Knutsford) Rutherford, V. H. (Brentford)
Bright, J. A. Laidlaw, Robert Samuel, S. M. (Whitechapel)
Brunner, J. F. L. (Lanes., Leigh) Lambert, George Scarisbrick, Sir T. T. L.
Bryce, J. Annan Lamont, Norman Seely, Colonel
Buckmaster, Stanley o. Layland-Barratt, Sir Francis Sherwell, Arthur James
Burns, Rt. Hon. John Levy, Sir Maurice Simon, John Allsebrook
Byles, William Pollard Lupton, Arnold Stanger, H. Y.
Carr-Gomm, H. W. Macdonald, J. R. (Leicester) Stanley, Hon. A. Lyulph (Cheshire)
Cherry, Rt. Hon. R. R. Maclean, Donald Stewart-Smith, D. (Kendal)
Clough, William Macnamara, Dr. Thomas J. Strachey, Sir Edward
Clynes, J. R. MacVeagh, Jeremiah (Down, S.) Strauss, E. A. (Abingdon)
Cobbold, Felix Thornley M'Laren, H. D. (Stafford, W.) Summerbell, T.
Collins, Sir Wm. J. (St. Pancras, W.) Maddison, Frederick Taylor, John W. (Durham)
Corbett, C. H. (Sussex, E. Grinstead) Mallet, Charles E. Tennant, H. J. (Berwickshire)
Cotton, Sir H. J. S. Markham, Arthur Basil Thompson, J. W. H. (Somerset, E.)
Davies, Sir W. Howell (Bristol, S.) Marnham, F. J. Thorne, G. R. (Wolverhampton)
Dewar, Arthur (Edinburgh, S.) Massie, J. Trevelyan, Charles Philips
Dickinson, W. H. (St. Pancras, N.) Masterman, C. F. G. Verney, F. W.
Dobson, Thomas W. Middlebrook, William Ward, W. Dudley (Southampton)
Dunne, Major E. Martin (Walsall) Money, L. G. Chiozza Wason, Rt. Hon. E. (Clackmannan)
Erskine, David C. Morrell, Philip Wason, John Cathcart (Orkney)
Essex, R. W. Morse, L. L. White, Sir George (Norfolk)
Esslemont, George Birnie Myer, Horatio White, J. Dundas (Dumbartonshire)
Evans, Sir Samuel T. Newnes, F. (Notts, Bassetlaw) White, Sir Luke (Yorks, E.R.)
Everett, R. Lacey Nicholson, Charles N. (Doncaster) Whittaker, Rt. Hon. Sir Thomas P.
Fuller, John Michael F. Norman, Sir Henry Wiles, Thomas
Fullerton, Hugh Nussey, Sir Willans Williams, J. (Glamorgan)
Glover, Thomas Nuttall, Harry Williams, W. Llewelyn (Carmarthen)
Gooch, George Peabody (Bath) O'Brien, K. (Tipperary, Mid) Wilson, J. W. (Worcestershire, N.)
Haldane, Rt. Hon. Richard B. Parker, James (Halifax) Wilson, W. T. (Westhoughton)
Harcourt, Rt. Hon. L. (Rossendale) Partington, Oswald Winfrey, R.
Harcourt, Robert V. (Montrose) Pearce, Robert (Staffs, Leek)
Harmsworth, R. L. (Caithness-shire) Pickersgill, Edward Hare TELLERS FOR THE NOES.—Mr.
Haworth, Arthur A. Pointer, J. Joseph Pease and Captain Norton.
Hazel, Dr. A. E. W. Ponsonby, Arthur A. W. H.
Mr. CAVE

moved to add at the end of the Clause:

"Provided always that in all cases where, but for this proviso, a claim to duty under this Section would arise by reason of I the passing of property on death no greater amount of Estate Duty shall be chargeable on such death than the Estate Duty chargeable on the principal value of the property passing on such death, less a deduction of the amount of the Estate or Probate (as the case may be) Duty which has already been paid or for which liability has already attached in respect of an interest in expectancy in such property of the character mentioned in this Section."

This has been discussed already, and therefore I am not going into it; but I want to say that I think the Government, without intending it, are over-reaching the subject by the imposition of this duty. The effect of the Clause is that, in the event of the reversioner dying before the life-tenant, you are exacting two duties, first the duty on the reversion when the reversioner dies, and secondly the duty on the whole estate on the death of the life-tenant. We have agreed right through that you ought to have one whole duty, and that is the object of this Amendment. If you reject it you will have two duties, and you will exact from a man the very duty from which he has obtained exemption. Unless- you accept the Amendment you are not keeping faith with the man who pays Settled Estate Duty.

Mr. HALDANE

In substance, as the hon. and learned Gentleman said, we did discuss this Amendment in the course of the earlier argument, because the contention, which was the subject of a division, was that we were entitled to a full duty on the death of A, and for better or for worse that proposition was accepted. Why should you make any deduction on the duty payable on the death of C? True it is that that duty is small; so much the better for C's estate. But the whole point with which the Amendment has been concerned is not the duty on C's estate but the duty on A's estate, and virtually the Committee has already come to the conclusion that there should be a full duty on A's estate.

Mr. PRETYMAN

Really I do not think the right hon. Gentleman has stated the whole case, because he omitted to mention the somewhat important fact that C never had the property at all. It really has some bearing on the case.

Mr. HALDANE

It is not necessary for the purpose of the Death Duty that the owner should be necessarily in possession. He has an expectancy sometimes of enormous value.

Mr. PRETYMAN

But C had the property in expectancy only. He never possessed it, and the expectancy is only worth something less than the whole. On A's death and on C's death both duties payable were covered by the partial payment on C's death only. That is the present state of the law. The Government now claim not only the full duty on A's death, but the partial duty on C's death as well, so that instead of having a partial duty only you are to have a partial duty and a whole duty, although a bargain has been made with the State that only one duty should be paid on a settlement. That is the clear fact. Settlement of Estate Duty is payable simply for no other reason than that the duty in that settlement should be limited to one payment. C has an interest in expectancy only, and

he disposes of his interest in expectancy to D. Does the right hon. Gentleman maintain for one moment that it is not the fact that because C does not pay the duty, D will have to pay it?

Mr. HALDANE

Certainly, on A scale.

Mr. PRETYMAN

An ordinary common case is that of C, who has only an interest in expectancy when he makes a will, and he makes a new settlement. If he had paid the duty no duty would be payable by D, who was the first tenant for life under the new settlement. If C has not paid the duty D will have to pay it.

Mr. HALDANE

Certainly.

Mr. PRETYMAN

I think the disadvantage in arguing with the right hon. Gentleman is that he has much greater legal knowledge. I suppose we shall have to continue the discussion until the Committee entirely understand the point. I cannot get away from the point that this Amendment is meant to deal with, viz., that there is a bargain made by which 2 per cent. is paid, and only one duty is paid on settlement, and now the Government intends to take a duty and a half. The Government are not content with the whole duty, but they intend to take a duty and a half, and they are doing as great an injustice in one direction as they were doing an injustice to the Crown in the other. If this Amendment is accepted it is a fair adjustment, and I appeal to the right hon. Gentleman to accept it.

Sir E. CARSON

May I ask the right hon. Gentleman whether C has any vote?

Mr. JOYNSON-HICKS

I cannot help saying that no answer has been given to the Amendment from this side of the Committee, and that you are really imposing a duty and a half on the falling in of these two lives. I think it would be right and fair to accept the Amendment.

Question put, "That those words be there added."

The Committee divided: Ayes, 56; Noes, 133.

Division No. 644.] AYES. [1.20 a.m.
Acland-Hood, Rt. Hon. Sir Alex. F. Bridgeman, W. Clive Craig, Charles Curtis(Antrim, S.)
Anson, sir William Reynell Carlile, E. Hildred Craig, Captain James (Down, E.)
Balcarres, Lord Carson, Rt. Hon. Sir Edward H. Dalrymple, Viscount
Banbury, Sir Frederick George Castlereagh, Viscount Dickson, Rt. Hon. C. Scott
Baring, Capt. Hon. G. (Winchester) Cecil, Evelyn (Aston Manor) Douglas, Rt. Hon. A. Akers-
Barrie, H. T. (Londonderry, N.) Coates, Major E. F. (Lewisham) Faber, George Denison (York)
Bowles, G. Stewart Courthope, G. Loyd Forster, Henry William
Foster, P. S. Long, Col. Charles W. (Evesham) Stanley, Hon. A. Lyulph (Cheshire)
Gibbs, G. A. (Bristol, West) Lyttelton, Rt. Hon. Alfred Starkey, John R.
Gordon, J. Mason, James F. (Windsor) Staveley-Hill, Henry (Staffordshire)
Guinness, Hon. W. E. (B. S. Edm'ds.) Moore, William Talbot, Lord E. (Chichester)
Hamilton, Marquess of Morpeth, Viscount Valentia, Viscount
Hardy, Laurence (Kent, Ashford) Nicholson, Wm. G. (Petersfield) Warde, Col. C. E. (Kent, Mid)
Hay, Hon. Claude George Pease, Herbert Pike (Darlington) Williams, Col. R. (Dorset, W.)
Hill, Sir Clement Pretyman, E. G. Wyndham, Rt. Hon. George
Hills, J. W. Roberts, S. (Sheffield, Ecclesall)
Hope, James Fitzalan (Sheffield) Ronaldshay, Earl of
Hunt, Rowland Salter, Arthur Clavell TELLERS FOR THE AYES.—Mr.
King, Sir Henry Seymour (Hull) Scott, Sir S. (Marylebone, W.) Cave and Mr. Hicks Beach.
Lane-Fox, G. R. Stanier, Beville
NOES.
Acland, Francis Dyke Hazel, Dr. A. E. W. Pensonby, Arthur A. W. H.
Agnew, George William Helme, Norval Watson Priestley, Sir W. E. B. (Bradford, E.)
Allen, A. Acland (Christchurch) Higham, John Sharp Radford, G. H.
Allen, Charles P. (Stroud) Hobhouse. Rt. Hon. Charles E. H. Rendall, Athelstan
Ashton, Thomas Gair Hogan, Michael Richards, Thomas (W. Monmouth)
Balfour, Robert (Lanark) Holt, Richard Durning Richards, T. F.
Barnard, E. B. Hooper, A. G. Roberts, Charles H. (Lincoln)
Barran, Sir John Nicholson Horniman, Emslie John Robertson, Sir G. Scott (Bradford)
Beauchamp, E. Howard, Hon. Geoffrey Robinson, S.
Berridge, T. H. D. Isaacs, Rufus Daniel Robson, Sir William Snowdon
Black, Arthur W. Jones, Sir D. Brynmor (Swansea) Roch, Walter F. (Pembroke)
Bowerman, C. W. Jones, Leif (Appleby) Roe, Sir Thomas
Brace, William Jones, William (Carnarvonshire) Rogers, F. E. Newman
Bright, J. A. King, Albert John (Knutsford) Rutherford, V. H. (Brentford)
Brunner, J. F. L. (Lanes., Leigh) Laldlaw, Robert Samuel, S. M. (Whitechapel)
Bryce, J. Annan Lambert, George Scarisbrick, Sir T. T. L.
Buckmaster, Stanley O. Lamont, Norman Seely, Colonel
Burns, Rt. Hon. John Layland-Barratt, Sir Francis Sherwell, Arthur James
Byles, William Pollard Levy, Sir Maurice Simon, John Allsebrook
Carr-Gomm, H. W. Lloyd-George, Rt. Hon. David Stanger, H. Y.
Cherry, Rt. Hon. R. R. Lupton, Arnold Stewart-Smith, D. (Kendal)
Clough, William Macdonald, J. R. (Leicester) Strachey, Sir Edward
Clynes, J. R. Maclean, Donald Summerbell, T.
Cobbold, Felix Thornley Macnamara, Dr. Thomas J. Taylor, John W. (Durham)
Collins, Sir Wm. J. (St. Pancras, W.) MacVeagh, Jeremiah (Down, S.) Tennant, H. J. (Berwickshire)
Corbett, C. H. (Sussex, E. Grinstead) M'Laren, H. D. (Stafford, W.) Thompson, J. W. H. (Somerset, E.)
Cotton, Sir H. J. S. Maddion, Frederick Thorne, G. R. (Wolverhampton)
Davies, Sir W. Howell (Bristol, S.) Mallet, Charles E. Trevelyan, Charles Philips
Dewar, Arthur (Edinburgh, S.) Markham, Arthur Basil Verney, F. W.
Dickinson, W. H. (St. Pancras, N.) Marnham, F. J. Ward, W. Dudley (Southampton)
Dobson, Thomas W. Massie, J. Wason, Rt. Hon. E. (Clackmannan)
Dunne, Major E. Martin (Walsall) Masterman, C. F. G. Wason, John Cathcart (Orkney)
Ersklne, David C. Middlebrook, William White, Sir George (Norfolk)
Essex, R. W. Money, L. G. Chiozza White, J. Dundas (Dumbartonshire)
Esslemont, George Blrnie Morrell, Philip White, Sir Luke (York, E.R.)
Evans, Sir S. T. Morse, L. L. Whittaker, Rt. Hon. Sir Thomas P.
Everett, R. Lacey Myer, Horatio Wiles, Thomas
Fuller, John Michael F. Newnes, F. (Notts, Bassetlaw) Williams, J. (Glamorgan)
Fullerton, Hugh Norman, Sir Henry Williams, W. Llewelyn (Carmarthen)
Glover, Thomas Nuttall, Harry Wilson. W. T. (Westhoughton)
Gooch, George Peabody (Bath) O'Brien, K. (Tipperary, Mid) Winfrey, R.:
Haldane, Rt. Hon. Richard B. Parker, James (Halifax)
Harcourt, Rt. Hon. L. (Rossendale) Partington, Oswald TELLERS FOR THE NOES.—Mr.
Harcourt. Robert V. (Montrose) Pearce, Robert (Staffs, Leek) Joseph Pease and Captain Norton.
Harmsworth, R. L. (Calthness-shire) Pickersgill, Edward Hare
Haworth, Arthur A. Pointer, J.

Question put, "That the Clause, as amended, stand part of the Bill."

The Committee divided: Ayes, 130;Noes, 53.

Division No. 645.] AYES. [1.30 a.m.
Aeland, Francis Dyke Brunner, J. F. L. (Lanes, Leigh) Davies, Sir W. Howell (Bristol, S.)
Agnew, George William Bryce, J. Annan Dickinson, W. H. (St. Pancras, N.),
Allen, A. Aeland (Christchurch) Buckmaster, Stanley O. Dobson, Thomas W.
Allen, Charles P. (Stroud) Burns, Rt. Hon. John Dunne, Major E. Martin (Walsall)
Ashton, Thomas Gair Byles, William Pollard Erskine, David C.
Balfour, Robert (Lanark) Carr-Gomm, H. W. Essex, R. W.
Barnard, E. B. Cherry, Rt. Hon. R. R. Esslemont, George Birnie
Barran, Sir John Nicholson Clough, William Evans, Sir S. T.
Beauchamp, E. Clynes, J. R. Everett, R. Lacey
Berridge, T. H. D. Cobbold, Felix Thernley Fuller, John Michael F.
Black, Arthur W. Collins, Sir Wm. J. (St. Pancras, W) Fullerton, Hugh
Bowerman, C. W. Corbett, C. H. (Sussex, E. Grinstead) Glover, Thomas
Brace, William Cotton, Sir H. J. S. Gooch, George Peabody (Bath)
Haldane, Rt. Hon. Richard B. Markham, Arthur Basil Scarisbrick, Sir T. T. L.
Harcourt, Rt. Hon. L. (Rossendale) Marnham, F. J. Seely, Colonel
Harcourt, Robert V. (Montrose) Massie, J. Sherwell, Arthur James
Harmsworth, R. L. (Caithness-sh.) Masterman, C. F. G. Simon, John Allsebrook
Haworth, Arthur A. Middlebrook, William Stanger, H. Y.
Hazel, Dr. A. E. W. Money, L. G. Chiozza Stanley, Hon. A. Lyulph (Cheshire)
Helme, Norval Watson Morrell, Philip Stewart-Smith, D. (Kendal)
Higham, John Sharp Morse, L. L. Strachey, Sir Edward
Hobhouse, Rt. Hon. Charles E. H. Myer, Horatio Summerbell, T.
Holt, Richard Durning Newnes, F. (Notts, Bassetlaw) Taylor, John W. (Durham)
Hooper, A. G. Norman, Sir Henry Tennant, H. J. (Berwickshire)
Horniman, Emslie John Nuttall, Harry Thompson, J. W. H. (Somerset, E.)
Howard, Hon. Geoffrey O'Brien, K. (Tipperary, Mid) Thorne, G. R. (Wolverhampton)
Isaacs, Rufus Daniel Parker, James (Halifax) Trevelyan, Charles Philips
Jones, Sir D. Brynmor (Swansea) Partington, Oswald Verney, F. W.
Jones, Leif (Appleby) Pearce, Robert (Staffs, Leek) Ward, W. Dudley (Southampton)
Jones, William (Carnarvonshire) Pickersgill, Edward Hare Wason, Rt. Hon. E. (Clackmannan)
King, Alfred John (Knutsford) Pointer, J. Wason, John Cathcart (Orkney)
Laidlaw, Robert Ponsonby, Arthur A. W. H. White, Sir George (Norfolk)
Lambert, George Priestley, Sir W. E. B. (Bradford, E.) White, J. Dundas (Dumbartonshire)
Lamont, Norman Radford, G. H. White, Sir Luke (York, E.R.)
Layland-Barratt, Sir Francis Rendall, Athelstan Whittaker, Rt. Hon. Sir Thomas P.
Levy, Sir Maurice Richards, Thomas (W. Monmouth) Wiles, Thomas
Lloyd-George, Rt. Hon. David Richards, T. F. (Wolverhampton, W.) Williams, J. (Glamorgan)
Lupton, Arnold Roberts, Charles H. (Lincoln) Williams, W. Llewelyn (Carmarthen)
Macdonald, J. R. (Leicester) Robertson, Sir G. Scott (Bradford) Wilson, W. T. (Westhoughton)
Maclean, Donald Robinson, S. Winfrey, R.
Macnamara, Dr. Thomas J. Robson, Sir William Snowdon
MacVeagh,. Jeremiah (Down, S.) Roch, Walter F. (Pembroke)
M'Laren, H. D. (Stafford, W.) Rogers, F. E. Newman TELLERS FOR THE AYES.—Mr.
Maddison, Frederick Rutherford, V. H. (Brentford) Joseph Pease and Captain Norton.
Mallet, Charles E. Samuel, S. M. (Whitechapel)
NOES.
Anson, Sir William Reynell Faber, George Denison (York) Moore, William
Balcarres, Lord Forster, Henry William Morpeth, Viscount
Banbury, Sir Frederick George Foster, P. S. Nicholson, Wm. G. (Petersfield)
Baring, Capt. Hon. G. (Winchester) Gibbs, G. A. (Bristol, West) Pease, Herbert Pike (Darlington)
Barrie, H. T. (Londonderry, N.) Gordon, J. Pretyman, E. G.
Beach, Hon. Michael Hugh Hicks Guinness, Hon. W. E. (B. S. Edm'ds) Roberts, S, (Sheffield, Ecclesall)
Bowles, G. Stewart Hamilton, Marquess of Ronaldshay, Earl of
Bridgeman, W. Clive Hardy, Laurence (Kent, Ashford) Salter, Arthur Clavell
Carlile, E. Hildred Hay, Hon. Claude George Scott, Sir S. (Marylebone, W.)
Castlereagh, Viscount Hill, Sir Clement Stanier, Beville
Cave, George Hills, J. W. Starkey, John R.
Cecil, Evelyn (Aston Manor) Hope, James Fitzalan (Sheffield) Staveley-Hill, Henry (Staffordshire)
Coates, Major E. F. (Lewisham) Hunt, Rowland Talbot, Lord E. (Chichester)
Courthope, G. Loyd Joynson-Hicks, William Warde, Col. C. E (Kent, Mid)
Craig, Charles Curtis (Antrim, S.) King, Sir Henry Seymour (Hull) Williams, Col. R. (Dorset, W.)
Craig, Captain James (Down, E.) Lane-Fox, G. R.
Dalrymple, Viscount Long, Col. Charles W. (Evesham) TELLERS FOR THE NOES.—Sir
Dickson, Rt. Hon. C. Scott Lyttelton, Rt. Hon. Alfred A. Acland-Hood and Viscount Valentia.
Douglas, Rt. Hon. A. Akers- Mason, James F. (Windsor)