§ The Solicitor-General
I beg to move, in page 27, line 7, to leave out subsection (6).
The object of the Amendment is to pave the way for the new Clause standing in the name of my right hon. and learned Friend and immediately below on the Order Paper—(Right of husband to disclaim liability for tax on deceased wife's income). The new Clause is 'designed to meet an argument advanced by hon. Members opposite when dealing with the provisions respecting husband and wife in the Bill as it stood, and the point is this.
The Commissioners, by Clause 29, are given the right to serve a notice upon a wife, in respect of income which is really hers, if the husband declines to pay the amount of the assessment. By an Amendment of the original Bill which was made in Subsection (6) of Clause 29, the husband was given the right to require the Commissioners to serve that notice, it having previously been a matter in their discretion whether they exercised it or not. When that Amendment was being discussed, hon. Members opposite said that, whenever a wife died, if the husband had the right to require that a notice be served upon her executors, they would be placed in a position of considerable embarrassment unless the husband was required to serve that notice within some specific time. It was represented that, if they did not know whether they were to be served with a notice or not, the executors might be prevented from winding up the wife's estate, and, therefore, some term should be placed upon the period in which the husband could require the notice to be served.
42 3.45 p.m.
The new Clause puts that term upon it, and requires a notice to be served by the husband within two months from the granting of probate or letters of administration; that is, it puts a term upon the period within which the husband has to make up his mind whether to require the notice to be served or not. The new Clause will go a long way, not only to meet the point of view advanced by hon. Gentlemen opposite, but also towards relieving the executors and personal representatives of a wife from the embarrassment in which they might otherwise find themselves.
The new Clause also, as a matter of logical consistency, contains a reference to other provisions which are to this effect. If a notice is served at the instance of the husband upon the wife's executors, subsequent assessments in respect of any income, instead of being made in the first place upon the husband, have to be made upon the wife's executors, and it was to this assessment that I was referring a moment ago, when I said that an interest charge might be attracted and that that was the reason why the new Clause involved us in re-commital of the Bill
If the husband has disclaimed liability from Income Tax because the income is really that of his deceased wife, it is a sensible arrangement that every assessment that might be necessary in respect of a wife's income should be made direct upon the wife's executors, instead of being made, in the first place, upon the husband and then transferred to his wife's estate by means of a notice. In the case of an assessment being made upon the executors, the usual time limit will apply, and any assessment which can be made under this new Clause will therefore have to be made within three years.
I suggest that this proposal not only meets the point put forward by hon. Members opposite, because it goes rather further in the direction in which they wanted it to go, in placing a term within which the husband can serve a notice, but, secondly, it places a time limit upon further assessments that can be made in consequence of that notice having been served.
§ Mr. Manningham Buller (Northants, South)
The right hon. and learned Gentleman has done a great deal to meet the point raised by my hon. Friends on 43 this side during the Committee stage. In fact, the new Clause does completely meet that point, whereas the Clause as it originally stood might, as the Solicitor-General now agrees, have led to very considerable delay in the winding-up of estates.
I am a little bit alarmed, however, with regard to the second part of the new Clause, in which it states that, over a period of three years after service of the first assessment upon the executors, it will be possible for further assessments to be served. If I understood the right hon. and learned Gentleman correctly, that would appear to mean that the winding-up of an estate might be prolonged for that period, in which case it might involve hardship and difficulty to the beneficiaries, but perhaps I have misunderstood what the right hon. and learned Gentleman said. At least, I would ask him to say that he will do everything he can to secure that that time limit of three years is cut down to the greatest possible degree. If the executors are left uncertain and feel under a disability, it does seem to imply that they will have to delay the distribution of the estate, and, while I am grateful for the way in which he has met the points raised from this side of the House, I should like him to deal further with that matter.
§ The Solicitor-General
The three-year time limit to which I was referring was the ordinary time limit fixed by Section 29 (3) of the Finance Act, 1923, namely, three years from the end of the year in which the wife dies. In point of fact, we are considerably abbreviating the time in which the wife's estate can be called upon to pay tax because, without this new Clause, the assessment could, as before, have been made on the husband within any time during the normal six-year period, and during that period the husband could have required notice to be given to the wife's executors. We are now abbreviating that period to three years, and therefore we are greatly assisting the executors of the wife's estate.
§ Amendment agreed to.
§ Further Amendment made: In page 27, line 15, after "under," insert "subsection (1) of."
§ Clause, as amended, ordered to stand part of the Bill.