§ 83. Sir William Davisonasked the Chancellor of the Exchequer whether he is aware that the Inland Revenue, after settling the amount of death duty payable on the sale of an estate after the testator's death for the best price then obtainable, are in the habit of applying for additional duty in the event of such estate being subsequently re-sold by the purchaser for a larger sum; that serious hardship is caused by this practice; and whether steps will be taken to discontinue it where there is no allegation of fraud or collusion between the representatives of the testator and the subsequent vendor?
§ The Financial Secretary to the Treasury (Captain Euan Wallace)My hon. Friend is under a misapprehension in suggesting that it is the practice of the Inland Revenue Department, in cases in which the valuation of property has been settled, to claim additional estate duty by reason of a subsequent sale of the property at a higher figure than the valuation originally settled. The value of real estate for the purposes of the Estate Duty is prescribed by law to be the price which the property would fetch if sold in the open market at the time of death. In arriving at that figure, regard is naturally had to the prices actually realised on the sale of the property, and the Courts have held that, where executors sell an estate in one lot and the property is sold again shortly afterwards in several lots, the price realised on the second sale may properly be taken into account in determining the value. Once, however, the value has been settled for Estate Duty purposes, it is not later revised in the light of any subsequent sale.
§ Sir W. DavisonDo not the Treasury consider it very unfair that, when a property has been sold for a fixed sum, and the purchaser subsequently, without any collusion with the executors, sells it for a larger sum, the assessment should be reopened, while they refuse to reopen assessments on property which is re-sold by the purchaser for a smaller sum? Is not that very unfair?
§ Captain WallaceI think that my hon. Friend has rather missed the point. If the assessment has once been definitely made, it is not reopened.
§ Sir W. DavisonI am referring to a case in which the figure for the assessment has been agreed. Is not my right hon. and gallant Friend aware of the recent case where the executors were placed in very serious difficulties by the facts stated in my question?
§ Captain WallaceI am aware of the recent case, but I cannot add to the very carefully considered answer which I have given.
§ Mr. MacquistenSurely it is the person who buys and sells at a profit that should be additionally assessed, not the estate of the deceased?