CLAUSE 22 (Exclusion of certain debts, etc., from deduction in valuing for estate duty.) (Hansard, 28 June 1939)

§ Lieut.-Colonel Acland-Troyte
I beg to move, in page 24, line 21, at the end, to insert: Provided also that this Section shall not have effect in any case in which the consideration given consisted of or included property derived from the deceased if and to the extent that such property was the subject matter of a settlement made by the deceased before and in consideration of the marriage of the deceased or of any issue of the deceased. This Amendment has a very limited application indeed. It is a very common practice for a man on the marriage of his daughters or his sons to make a settlement of a certain sum of money on them. On rare occasions, that sum of money may be lent back to the father on mortgage. In the event of this being done the money will, at the father's death, have to pay Death Duty, and it seems to me very unfair that that should be so. It is quite a common thing for a settlement to be made on the marriage of a son or daughter or grandchild.

§ The Solicitor-General
I am sorry that I cannot accede to my hon. and gallant Friend's request. Under the existing law 524 you cannot deduct anything which is a capital sum which the deceased covenants to pay on his death to the trustees of a marriage settlement. Nothing can be deducted. The Amendment would result in this, that money which a testator borrowed from the trustee of his marriage settlement should be put in a better position than capital which he had covenanted to hand over to the trustees at his death. I think that when he sees it in that light my hon. and gallant Friend will realise that his Amendment would create an anomalous position which it would be very difficult indeed to justify. It seeks to make allowable as a deduction money which is borrowed from a settlement which is effected by the testator himself in consideration of his marriage. Of course that conflicts with the whole principle of the Clause. What we are seeking to do in the Clause is to destroy these artificial debts which people create in order to abate the amount of their estate which is liable to Estate Duty at death. A transaction of the kind which my hon. and gallant Friend is suggesting should be exempted is, in a sense, a very unreal and artificial one, and if we allowed it in that case I am afraid we should be opening the door to a class of transactions which the Clause has been introduced to prevent. I know that my hon. and gallant Friend is just as anxious as we are to make the Clause watertight, and I hope that after this explanation he will not feel it necessary to press his Amendment.

§ Lieut.-Colonel Acland-Troyte
I am not sure that my hon. and learned Friend has got the point which I have in mind, but in view of what he has said I beg to ask leave to withdraw the Amendment.