Clause 27.—(QUICK SUCCESSIONS.) (Hansard, 15 July 1958)

§ Mr. Diamond
I beg to move, in page 22, line 12, at the end to insert: and (c) that the two deceased were related as husband and wife or as grandparent or parent and child". I formally move this Amendment, so that the matter can be discussed.

§ Mr. Deputy-Speaker (Sir Gordon Touche)
I think that this Amendment may be discussed with the Amendment in page 22, line 27, at the end to insert: Provided that, if the Commissioners of Inland Revenue are satisfied of the matters mentioned in paragraphs (a) and (b) of this subsection but not of the relationship mentioned in paragraph (c), the amount of the estate duty payable on the property on the later death shall be reduced by one half of the amount by which it would have been reduced if the Commissioners had been satisfied of the said relationship; so, however, that in any case where the reduction allowed by section fifteen of the Finance Act, 1914 (which provides for reductions of estate duty in respect of quick successions to land or certain businesses or interests therein), is greater than the reduction, which would be allowed under this subsection, the greater (and not the lesser) reduction shall be made.

§ Mr. Jay
I beg to second the Amendment.

§ Mr. Simon
This Amendment, as I understand it, restricts the highest rate of quick succession relief, the rate which was inserted in Committee, of 75 per cent. where the second death follows the first within three months, to cases where the two deceased were related as husband and wife or as grandparent or parent and child. However, by the Amendment in page 22, line 27, the old, pre-Committee stage rate in the scale of quick succession relief, which was established by the 1914 Finance Act, would be saved. I imagine that the latter Amendment was put down only to prevent the main Amendment being out of order. It does result in very anomalous situations.
From what the hon. and learned Member for Kettering (Mr. Mitchison) said in Committee, I imagine that this Amendment is moved because it is desired to limit quick succession relief, or, at any rate, the new quick succession relief, to cases where the deceased are closely related, because it is felt that those are the real cases of hardship.
11.0 p.m.
The Amendment limits altogether too strictly, for the problem does not really 1169 admit of a precise answer. For example, the relationship may equally arise where two deceased are not close relatives. The House has only to think of the case of an invalid or a child dependent upon brothers or sisters or uncles or aunts. It is not covered by the Amendment. Equally, the case of two spinsters who have lived a lifetime with each other is not covered by the Amendment.
There is another more serious consideration. The Amendment does not confine the full relief to cases where the beneficiaries are close relatives of the deceased. It is the dependence of the ultimate beneficiary on the two people who die which determines, even in the sense in which it was used by the hon. and learned Gentleman the Member for Kettering, whether there is hardship. It is not the relationship of the two deceased persons. What the Amendment does is to limit the full relief to cases where the two deceased were closely related and takes no account of the relationship of the beneficiary.
For example, the House will remember that in the Beare case, which was what really led to this Clause being put down, a husband and wife died in a common accident and the four children, as a result, before they got the estate, had to see the estate suffer Estate Duty twice over. Take a similar case. A husband and wife die childless in a common disaster and the estate passes to a distant cousin. Under this Amendment there would be full relief at the rate of 75 per cent.
But take the case of a husband and his brother dying in a common disaster, and the estate passing to the four children of the father. There we have the same hardship as we have in the Beare case, but there is restricted relief. For that reason only I suggest that this Amendment really does not make good sense and does not really meet the sort of case which the hon. and learned Gentleman had in mind.
In addition, the Amendment establishes two different systems of quick succession relief, one according to the relationship of the deceased persons and another according to the nature of the property, because it superimposes on the old quick succession relief, which, for reasons of order, is left intact. As a result, we get curious cross-relationships between the 1170 two, and the law becomes extremely complicated and anomalous, and so unacceptable.

§ Mr. Diamond
By leave of the House, since I moved the Amendment so briefly, I would point out that one of the problems about quick succession is that we have been succeeding so fast from one Clause to another that my hon. and learned Friend the Member for Kettering (Mr. Mitchison), who is more capable than anyone else at dealing with this matter and at picking holes in the argument of the Financial Secretary, is not at the moment here to help us with his knowledge and wide learning in the matter.
The Financial Secretary pointed out that even if the Amendment were more happily drawn it would still be too narrow. The answer to that is that the Clause we are seeking to amend is too wide; the relief given by the Clause is far too wide. It is all very well for the Financial Secretary to say certain people are not helped by this Amendment. The Clause helps everybody whether he be related in this way, or in the odd ways which the Financial Secretary instanced for examples, or if he is not related at all, and whether there is an accident or whether there is not an accident.
However, we appreciate that perhaps the Amendment does not entirely serve the purpose which it was intended to serve, and I beg to ask leave to withdraw the Amendment.

§ Mr. Deputy-Speaker
The next Amendment will have to be moved in an amended form. After "months", the first three words come out.

§ Mr. Diamond
I follow perfectly, and wish to move the Amendment in the form which you have suggested, Mr. Deputy-Speaker.
I beg to move, in page 22, line 16, after the words last inserted, to insert: and both deaths arose out of one accident". I would thank the Financial Secretary for accepting half the Amendment. The second part refers to the question of an accident, and the following Amendment defines the accident. I take it that it would not be out of order to refer to 1171 that at the same time. The point is very clear. We are back on the same argument that the Clause as drafted provides far too wide a relief. It does not refer to hardship cases only, but to all sorts of cases and it was sought to restrict the relief given in cases where real hardship was suffered. That was likely to be in the case of two deaths arising out of one accident.

§ Mr. Houghton
I beg to second the Amendment.

§ Mr. Simon
This Amendment restricts the 75 per cent. Estate Duty quick succession relief to cases where the deaths occurred as the result of one accident. But although the hon. Member for Gloucester (Mr. Diamond) has made it clear that he desires to see this part of the relief made more restrictive, and particularly to cases of real hardship, I suggest that this Amendment does not do that.
For example, the hardship is just the same if the two deaths occur within the same period from different accidents—he has not covered that—or even if they occur from natural causes. For example, taking the Beare case, supposing Mr. and Mrs. Beare died one after the other, or even simultaneously, in a cholera epidemic, there is exactly the same hardship to the children, and that is not covered. In fact, the relief is restricted by this Amendment.
It was the feeling of the whole House, when we discussed this matter on Second Reading of the Double Death Duties Bill—and it was expressed by my hon. Friend the Member for Brighton, Pavilion (Mr. Teeling)—that that type of case ought to be safe. The best way of putting it is the way that it was put by the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas), when he was criticising the similar words, "common calamity". He said: The injustice does not arise because there is a calamity—let us be perfectly clear about that—in which two people die. The injustice arises because…there is such a short interval of time for the enjoyment of the property which passes from one to the other."—[OFFICIAL REPORT, 24th January, 1958; c. 1461, Vol. 580.] It is on that basis that, to my mind, this Clause can be justified, and for that reason this Amendment is unacceptable.