HC Deb 07 July 1959 vol 608 cc1294-5
The Solicitor-General

I beg to move, in page 25, fine 40, after "land", to insert or actual enjoyment of an incorporeal right over the land". I cannot move this Amendment with quite such precision and speed. It is all about gifts inter vivos where the donor retains possession and enjoyment of the property during his lifetime, or where the donor secures to himself some benefit in some other way. Such gifts, the House will remember, are liable to duty on the death of the donor whenever the gift was made, unless the donor gives up possession or enjoyment outside five years of his death. We sailed along merrily until an Australian case in the Judicial Committee of the Privy Council, having the name of Chick, and the object of this Clause is to restore the practice before the case of Chick.

Under the old practice if the donor subsequently occupied the property on lease from the donee for full consideration, there was no claim for duty on the very sensible principle that it seemed that the donor had as much fun out of the gift as he might anyway and it was just as though he let the property to a third party at a full economic rent. That became no longer the position and the Clause was put in to restore the old practice.

This Amendment is necessary, not to alter the principle, but to correct a detail in favour of the taxpayer. It has been represented to us, in particular by the Law Society, that the Clause, which is framed—with reference to line 40 on page 25—in terms of "actual occupation of the land or actual possession of the chattels" would not cover the case where the donor paid the full economic rent, may I suggest, for the enjoyment of shooting rights or a right of way held from the donee. Provided that were done for a full economic rent, it would not be right that the enjoyment should give rise to a claim for Estate Duty and, accordingly, we have thought fit to submit to the House that it is right to proffer these words dealing with the enjoyment of an incorporeal right, a provision the full content of which I do not understand even at this time of the night, but covering I think something like an easement and certainly to cover sporting rights or a right to take timber or any of those other jollifications over land which one can enjoy at a full economic rent.

Mr. Mitchison

This seems wholly reasonable, but, since this is an incorporeal right over the land, I suggest, with respect to the right hon. and learned Gentleman, it is a profit à prendre and not reasonable.

Mr. H. Wilson

In view of the important qualification made by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), could we have the views of the Solicitor-General on whether he agrees? If he is not in a position to give an authoritative reply, will he send for the Attorney-General, so that we can have the whole issue completely confused?

The Solicitor-General

If I may have the leave of the House, in courtesy to the right hon. Member for Huyton (Mr. H. Wilson), I should say nothing gives me more pleasure than to say that I agree with the hon. and learned Member, but the words in the Clause mean exactly as stated, namely, the actual enjoyment of an incorporeal right over the land and it does not seem to matter very much whether rent is allowable at profit à prendre or easement or any other jollifications of which I reminded the House.

Amendment agreed to.