HC Deb 07 July 1959 vol 608 cc1292-3

12 midnight.

Mr. Philip Bell

I beg to move, in page 25, line 29, at the end to insert except that subsection (2) of this section shall not apply in a case (not being a case where subsection (3) of this section applies) where the policy matured, or was surrendered, before the twenty-second day of that month. Perhaps I may make this Amendment intelligible to those who do not practise this obscure subject by saying that the object is to protect rights which were vested up to the time of the publication of the Finance Bill. The position is that ordinarily, under Section 21 of the Finance Act, 1894, Estate Duty is paid on policy moneys which usually become payable on the death of the person who took out the policy, but if the policy did not exist because it had matured before-hand, or had been surrendered, then no Estate Duty was levied.

The Clause we are now concerned with has brought in something new. If this Clause were passed no longer would duty be paid on the whole of the policy moneys, but only on a proportion related to the amount of the premiums paid. That will not apply, of course, until the date named in Clause 9, 7th April, 1959, so that in the case of a person dying after that date the method of levying tax where there has been a policy has been altered rather to the detriment of the taxpayer.

What is the effect of that provision on the concession he already enjoys? It will, in fact, remove it, because it would not be right, in my view, that it should affect policies that have already matured or been surrendered prior to this date, or perhaps have been in the hands of the holders prior to the publication of the Finance Bill.

The object of my Amendment is that those people who, as the law stood, were not liable to pay any tax because the policy had matured or had been surrendered, should not, by virtue of the Clause, pay any tax if the moneys reached their hands prior to the publication of the Finance Bill.

Mr. Stevens

I beg to second the Amendment.

In view of the clear exposition which my hon. and gallant Friend the Member for Bolton, East (Mr. Philip Bell) has given about the meaning of the Amendment I feel it is unnecessary for me to try to make it any clearer, and at this late hour perhaps the House will be grateful for that.

The Solicitor-General

This being a Clause aimed at granting relief from Estate Duty, one has to look long and late to find a point at which it might not do so. In this case, as I understand what my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell) has been saying with great clarity, one has to find a given policy taken out or assigned more than five years before the death of the assured. It has to be either an endowment policy which matured during the assured's lifetime and within five years of his death, or be a policy surrendered by the donee within five years of the assured's death.

Under the law as it is, there would be no claim for duty in those cases even if the assured had paid premiums within five years before death. That is for technical reasons which no one, not even, with respect, the hon. Member for Belper (Mr. George Brown) would be interested in, and I do not propose to trouble the House with them.

The result is that the policy money, or the surrender money, might be in the hands of the beneficiary when he had no expectation of having to pay any duty until he has seen the terms of this Finance Bill. In the circumstances, it would seem that my hon. and learned Friend's Amendment accurately hits the very small target and we would invite the House to accept it.

Amendment agreed to.