HC Deb 29 June 1915 vol 72 cc1762-4

It shall be lawful for any person to pay into the Exchequer at any time any sum not less than ten pounds, and being a multiple of ten pounds, as a prepayment of such Death or Estate Duties as shall become due to the Exchequer from his estate at his death. Such prepayments shall carry compound interest at the rate of three pounds per cent. per annum until the date of death of such person so making prepayments and shall then, together with accrued interest, be deducted from any death or estate duties payable to the Exchequer from his estate.

In the event of the amount of such prepayments and accrued interest being greater than the amount of Death and Estate Duties payable from the estate of such person at his death the difference shall be repaid by the Exchequer to the estate.

Clause brought up, and read the first time.


I beg to move that this Clause be read a second time. This Clause does not arise out of the War. Nevertheless it contains a proposal which I think would be of great advantage to a great many taxpayers, and in circumstances like the present would be of considerable benefit. Those who have prospectively in view of the payment of Death Duties, and who desire to provide for them as a great many people do in their lives, can only do so by insuring their lives, or by investing money with a view to its accumulation during their lives. Of course, by means of insurance they have to provide a considerable amount of profit to the insurance companies, and they have also the disadvantage of being obliged to pay regular yearly premiums, whether it is convenient or not. On the other hand, if they decide merely to invest their money so that it may accumulate, there is the possibility of a tremendous loss of capital through the depreciation of prices. What I would suggest is that the Treasury should permit any person to prepay in round sums money on account of Death Duties which will fall due on the death. This in many cases would be an advantage to the taxpayer, because it would enable him in years of prosperity or on the occasion of some windfall to pay off a certain amount of his Death Duties instead of accumulating the amount. I propose that, when the Death Duty fell due on the death of the individual, the duty would be calculated exactly as it is now, but that all the prepayments with the moderate interest of 3 per cent. at compound interest should be deducted from the amount to be paid. The advantages are that the individual taxpayer would be able to pay as much as was convenient to himself towards the sum which would fall due on his death, and, on the other hand, there would be no risk of loss because the death itself is absolutely certain. In addition the State would have the advantage—it is an advantage at the present time and is always an advantage, I suppose—of getting the money sooner than it would otherwise be got and, what is more, it would be equivalent to borrowing money at the small rate of 3 per cent. interest, which interest would not have to be paid until the death of the individual.


The hon. Member has introduced a very interesting topic, but I hope that he will defer the consideration of this matter until Death Duties are once again generally under discussion. What he proposes is to do for the free property of living individuals exactly what can be done now with regard to settled property. He wants to pay by instalments at a time when the individual has really no knowledge of what he will be worth at the time of his death, and this paying of instalments of an unknown amount will be leaving the way open to a quiet banking transaction on the part of the individual, who will be able to devote to this purpose any sum he likes, in multiples of £10, on which the State is bound to pay 3 per cent. compound interest for an indefinite period. I do not think that it would be as attractive to the taxpayer as the hon. Member suggests, because experience of all commutations of this kind, settled duties and other things, does not show that the taxpayer has taken advantage of them. The hon. Gentleman has himself suggested that it is part of a much larger question. The Clause, as it stands, would really have to be safeguarded, and as we have so many problems arising out of the War to discuss, perhaps he will be good enough not to press it.


I am quite satisfied, and I ask leave to withdraw the Amendment.

Motion and Clause, by leave, withdrawn.