HL Deb 02 April 1897 vol 48 cc357-60
* EARL STANHOPE

asked Her Majesty's Government whether they proposed to formulate by Treasury minute, or by any other means, a definite rule as to the administration of Clause 20 of the Finance Act with regard to pictures and works of art, etc. He had, he said, found a general impression prevailing that pictures, works of art, manuscripts, and books that were made heirlooms, and therefore not saleable, were exempt from estate duty, but that was not at all the case. The clause set forth that Where any property passing on the death of a deceased person consists of such pictures, prints, books, MSS., works of art, scientific collections, or other things not yielding income appear to the Treasury to be of national, scientific, or historic interest, and is settled so as to be enjoyed in kind in succession by different persons, such property shall not, on the death of such deceased person, be aggregated with other property, but shall form an estate by itself, and while enjoyed in kind by a person not competent to dispose of the same be exempt from estate duty; but if it is sold or is in possession of some person who is then competent to dispose of the same shall become liable for estate duty. The administration of Clause 20 was left entirely to the Treasury, who, as he had ascertained, would be guided by the opinion of the President of the National Gallery. That was rather vague, and was a happy-go-lucky arrangement which might vary with different Chancellors of the Exchequer. The object of his Question was to ascertain whether some definite rule could not be laid down in the matter. In this country there were some very great collections, containing many pictures which were open to the public for inspection, and many which were sent to the exhibitions. At Pet-worth House the pictures were always open to the public; they had been frequently exhibited at the Royal Academy, and yet only some of these pictures would be exempted from paying estate duty. The same was the case in many other collections he could name. The inevitable result of such, an arrangement would be that in two or three generations, after paying heavy duties, pictures would not remain in a family, but would probably go abroad. Who would then be the sufferers? They would be the public, the very persons in whoso interest the Act was passed. ["Hear, hear!"] In Italy there was a law which prevented pictures and works of art leaving the country, or, if they did leave, they had to pay a tax to the Government. He would suggest that some means should be adopted of defining what pictures, generally speaking, were of historic or national importance. Whilst recognising the difficulty of formulating any particular rule, he thought that in the decision of such a question it was possible to include, besides the President of the National Gallery, the Chairman of the National Portrait Gallery, and, perhaps, other competent judges—in fact, a small committee of competent judges of works of art find pictures, or even a small departmental committee, should be associated with this inquiry. It was a very hard thing for individuals to go to law with the State in order to have cases cited for precedents. Collections, whether scientific, historic, or national, were of such importance that it would be a sad tiling for the country if, in 50 years' time, they were not merely to change hands, which would be of little moment, but were to be taken out of the country.

LORD ARUNDELL OF WARDOUR

agreed with the noble Earl that Clause 20 of the Finance Act was so vague as to the exemptions which might be made as to prove embarrassing to the possessors of works or art and their successors. Take the case of a man who found himself in the absolute possession of a collection, In view of the death duties, he did not want to tie up all the pictures, but, before bringing some of them into settlement, it was vital to know what pictures would be brought under the protection of this clause. He could not see why a minute should not be framed on the subject, or, at any rate, why the information should not be obtainable during a man's lifetime. The inequality in the operation of the clause was one of the greatest grievances connected with it. It was not so in the case of men who died possessed of property in shares or stock. For instance, upon £100,000 of such property £6,000 would be paid, and there liability would cease. But in the case of lands, shops, factories, and also of galleries of works of art, the property was subject to valuation, and taxed according to valuation, and every valuation was a superadded tax. It was especially so in the case of land, where the tax was not upon what was received, not upon the net but upon the gross, upon which a man did not receive more than a half or a third of his rental. Under such circumstances it could not be expected that- possessors of works of art not yielding income would always keep them back from sale; it was all they could fall back upon to pay the duty. If they were not brought under the clause few pictures would be brought into settlement and more would pass out of the country. He considered the letter he wrote to The Times on October 31, 1895, as establishing the facts, and should continue to consider, until he was refuted, that the grounds on which Sir W. Harcourt justified his exceptional treatment of land were founded on a mistake in historical reference. He did not hold Sir W. Harcourt responsible for the statement; he was misled by his authority, Hallam, who again was misled by a loose and inaccurate statement in the Parliamentary history. But he was not entitled to go into that question now, but he hoped that due consideration would be given to the question of the noble Lord.

THE LORD PRIVY SEAL (Viscount CROSS)

said that the only answer he could give his noble Friends was to ask them to have a little patience. He had been requested by the Treasury to give the following answer:—That in the opinion of the Treasury it is not possible to lay down by Treasury minute or otherwise a definite rule for the interpretation of the section; that, as was stated while the section was under discussion in Parliament, the Treasury will be disposed to interpret it with due liberality after taking the advice of experts in such matters; and that in process of time a series of precedents must necessarily be accumulated, which will be of practical importance in guiding future decisions. [Laughter.]

* EARL STANHOPE

was much obliged to his noble Friend for his answer, but it was so unsatisfactory that it was his intention to call the attention of the House to the circumstances, and to the administration of the clause immediately after Easter.