HL Deb 26 August 1914 vol 17 cc505-8

My Lords, I desire to ask whether, in the case of officers and men of the Navy and Army who may lose their lives during the present war while on active service, their property will be charged with Death Duties. This question has been raised before now, and I am sure it is one which your Lordships will consider well deserving of consideration. The last time that it was dealt with was in the year 1900 on the occasion of the Boer War, Lord St. Aldwyn being at the time Chancellor of the Exchequer. It was provided in the Finance Act of that year that in such cases the Treasury may, if they think fit, on the recommendation of the Secretary of State or of the Admiralty, as the case requires, remit, or in the case of duty already paid repay, up to an amount not exceeding £150 in any one case, the whole or any part of the Death Duties leviable in respect of property passing upon the death of the deceased to his widow or lineal descendants if the total value for the purpose of the Estate Duty of the property so passing does not exceed £5,000. That is the condition in which the matter stands at the present time.

But I am bound to say that this seems to me not a question of amount, but one of principle. If an officer or a soldier loses his life in the service of the Crown, it is not only mean but a mistaken action on the part of the State to make a claim of any kind as if an ordinary death had occurred. I will put to your Lordships the strongest case that I can conceive—that of an officer or soldier who has left the Service, has married, and has, perhaps, a young family. Then out breaks a war such as this, which requires that every patriotic man in this country should do everything he can. What happens if this man rejoins the Colours? To begin with the rate of his assurance, supposing him to have assured his life, is greatly raised; and if he happens to be killed it is impossible, if he leaves property exceeding £5,000, for any deduction in regard to Death Duties to be made. That man might have sat still and not rejoined, and no one would have had a right to blame him. Yet if he does come forward he is fined in the way I have mentioned. I feel sure that on both sides of your Lordships' House there is only one opinion with regard to this matter—namely, that, to put it no higher, it is a mistake on the part of the State to tax a man because he has rendered patriotic service. I beg to ask the Question standing in my name.


My Lords, I am sorry not to be able to give a definite answer to the Question which the noble Earl has asked as regards the steps which we propose to take to modify the existing regulations with regard to these particular Death Duties. I hope that to-morrow I may be in a position to do so. But I did not ask the noble Earl to postpone his Question from to-day, because it seemed desirable that the House should understand how the matter stands and what the position is. The whole question is not quite so simple as might be gathered from what fell from the noble Earl. A number of other considerations, kindred considerations, are attached to it, many of which were brought out in the course of the debate in another place in the year 1900 to which the noble Earl alluded. There are, of course, other forms of dangerous public service besides service in the field which, if an indiscriminate relief was given in these particular cases, might be held to be worthy of not less consideration.

As the matter now stands, all persons who serve in the ranks are freed front any form of Death Duties. That is due to the adaptation, in the Finance Act of 1894, of a very old regulation dating from the year of the Battle of Waterloo, under the Stamp Act of that year, by which, in the case of every common seaman, marine, or soldier who is slain or dies in the service of the Sovereign, all his effects are exempted from every kind of public charge. That, of course, does not in the main touch the point to which the noble Earl calls attention, although in the South African War it did to some extent, because in that case a number of persons of large fortune were serving in the ranks. As regards officers, the noble Earl has told us what happened in the debate on the Finance Bill in 1900. A number of Amendments were introduced to which Sir Michael Hicks Beach, as he then was, was not able to assent; but he agreed that there was a case for consideration, and at the Report stage he brought up the section of which the noble Earl has told us. That section provides that, in respect of property the total value of which for the purpose of Estate Duty does not exceed £5,000, the widow or lineal descendant of any person dying after October 11, 1899, from wounds inflicted, accident occurring, or disease contracted, within twelve months before death, while on active service, is to be relieved from Death Duties up to an amount not exceeding £150. That section is still operative, but we do not think that it entirely meets the case or covers certain instances of real hardship which are likely to occur. There is, of course, a general argument against relieving individuals or classes of persons by special exemptions from taxation, but in this particular case that argument, whatever its general validity may be, cannot be held to be in any sense conclusive. Therefore we feel that some extension by means of legislation is called for; and there are various principles which have been introduced into our more recent dealings with taxation which it may be possible to apply to some extent, although I fear that anything like a general or indiscriminate relief from all Death Duties in such cases as these it would not be found possible to ask Parliament to give.

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