HC Deb 24 June 1935 vol 303 cc914-6

Where a younger person is, under Section one hundred and eighty-four of the Law of Property Act, 1925, deemed to have survived an elder person, and the Commissioners of Inland Revenue are satisfied that Estate Duty has become payable on any property passing on the death (occurring after the passing of this Act) of each such person, then the amount of Estate Duty payable on the death of such younger person in respect of such property shall be reduced by fifty per ceent.—[Sir J. Withers.]

Brought up, and read the First time.

8.59 p.m.


I beg to move, "That the Clause be read a Second time."

This sounds to be a dry legal proposition, but it deals with a real case of hardship. The Law of Property Act, 1925, Section 184, mentioned in the new Clause, provides that if two persons die together, the younger person is presumed to have survived the older. That is to say, if you take the case of a father and son who were killed in a motor or an aeroplane accident, and the father left his property to his son, and the son left his property to his wife and children, then the son is presumed to have survived the father, and duty is payable on the father's whole estate and on the son's whole estate as well. This Clause is meant to provide that in such a case Estate Duty on the estate of the younger person shall be reduced to 50 per cent. of the whole, so that the Government would receive Estate Duty on the father's whole estate and 50 per cent. on the son's estate, which, I think the Committee will agree, is a very fair arrangement, considering that there is no real succession whatsoever. The son does not succeed; he never really survives. They are killed at the same time, and the son's survival is merely a legal hypothesis.

The principle is admitted that in the case of people dying near together in point of time there shall be a reduction in the Estate Duty, and Section 15 of the Finance Act, 1914, states that where the second death occurs within one year, 50 per cent. is payable, but only in the case of land and businesses. This Clause is meant to extend that provision in one way and to reduce it in another. It is meant to extend it in the sense that 50 per cent. only is to be payable in the case of the son, but it seeks to extend it in another case. The Section to which I have referred, in the Finance Act of 1914, limits the exemption to money invested in land or business. I want in this new Clause to do away with that limitation and to say that in the case of two people dying together, and the same property paying Estate Duty on both occasions, 50 per cent. only would be payable in the case of the son's estate, but it would be payable in respect of all the estate, whether land or otherwise.

I hope I have made that point fairly clear to the Committee. It is a case of great hardship very often to the wife of the younger person dying, and I urge the Chancellor of the Exchequer, if he possibly can, to accept this Clause, and if not this year, at any rate to give it his careful consideration in order that it may be done another time. There are not many people as a rule dying together, but where it does occur, there is a real hardship involved.

9.3 p.m.


I wish to say two words in support of the new Clause, which, it seems to me, deals with a real hardship. As far as I can see, one has to realise the fact that the property never actually passes into the possession of the second party who is called upon to pay duty as the law stands, and I hope the Chancellor will accept the Clause.

9.4 p.m.


I must confess that I am really puzzled at this Clause, because those who followed my hon. Friend will appreciate that in the case he contemplated, the case of an accident in which father and son are killed together, he wishes to give a relief in the estate duty, but, as he pointed out, that relief is already given by Section 15 of the Finance Act, 1914, and the Section in question is known as the "quick succession" provision. I will not read the whole of it, but it provides that the relief, where the second death occurs within one year of the first death, is to be 50 per cent.; where it occurs within two years, it is to be 40 per cent.; within three years it is to be 30 per cent. within four years, 20 per cent.; and within five years, 10 per cent. My hon. Friend said that that applies only to property consisting of land or business, and that he wants it to apply to all property, but only in the case where two people lose their lives together. But why should it be fair to do that in the case where both lose their lives at the same time in an accident and not in the case where one dies one day or two days after the other? I cannot see any justification for making this great extension to the principle of quick succession to the particular case where the deaths are simultaneous. I need not go into the arguments with regard to making the quick succession Clause apply to all kinds of property, for that is not my hon. Friend's proposal, and I cannot accept it for the reasons I have given.

Question, "That the Clause be read a Second time," put, and negatived.