DEATH DUTIES (KILLED IN WAR) BILL. (Hansard, 31 August 1914)

*THE MARQUESS OF CREWE
My Lords, in moving the Second Reading of this Bill I may remind the House that we have already had a discussion on this subject on a Question raised by the noble Earl, Lord Camperdown. He, I think, quite clearly, from his Question and the speech which accompanied it, desired, in the case of persons losing their lives in war, that the Death Duties should be remitted altogether. The Government have not felt it possible to go so far as that. I told the House on Wednesday last that the existing law stands on a basis which was framed by Lord St. Aldwyn when he was Chancellor of the Exchequer in the year 1900. In this Bill we have gone somewhat further than he did.
The Bill provides in its first clause that Section 14 of the Finance Act of 1900—which makes provision, in case of persons killed in war, for the remission of Death Duties on estates up to £5,000—shall have effect as respects the present war as if it applied to property passing to ancestors as well as to property passing to the widow or lineal descendants. There are some cases in which a man is killed and the property goes to his mother, in which case it seems certainly right that the same privilege should be enjoyed as in those other cases where the property passes to a widow or to a son. The present limit stands at £5,000. Clause 1 of this Bill provides that where the value for the purpose of Estate Duty of the property passing to the widow, lineal descendants, or lineal ancestors does not exceed £5,000, the whole of the Death Duties leviable in respect of that property shall be remitted. Where the said value exceeds £5,000, in respect of the first £5.000 the whole of the Death Duties are remitted. The effect of that, as the House will see, is more far-reaching than the mere excusing of the payment in respect of the first £5,000, because the abstraction of the sum of £5,000 from the corpus of the estate in many cases may bring it into a different classification permitting a lower scale of duty. The Bill further provides that where the said value exceeds £5,000 there shall also be remitted so much of the duties leviable in respect of the remainder as exceeds the sum which, if accumulated at compound interest at 3 per cent. per annum from the date of death with half-yearly rests, would, at the expiration of the period of the normal expectation of life of a person of the age of the deceased 567 at the time of death (calculated in accordance with the Tables of Mortality of Government Life Annuitants, 1912) amount to the whole of the duties so leviable. That, as I stated in answering the noble Earl's Question the other day, is calculated to amount, roughly, to something like a remission of 50 per cent. of the duties taking average lives. I think those are all the points that I need call attention to in moving the Second Reading of the Bill, which I now do.

THE EARL OF CAMPERDOWN
My Lords, I am bound to say, as regards the observations made by the noble Marquess who leads the House, that the Government have considerably improved the position in this matter of a person who loses his life in the service of his country and leaves property. By this Bill, where a man leaves, we will say, £8,000, on the first £5,000 no Death Duties will be leviable. The result is that the remaining £3,000, as the noble Marquess said, will fall under a lower category. That is a very important concession, because I imagine that there are a good many men in the public service whose property does not amount to more than £8,000 or £10,000. I am afraid I am not sufficient an actuary to be able to calculate what the words of the Bill, if reduced to figures, would mean; but taking the concession to be, as the noble Marquess says, 50 per cent. or thereabouts of the duty, the Bill represents a considerable alleviation of the burden which would fall upon such an estate.

THE MARQUESS OF CREWE
Before my noble and learned friend on the Woolsack puts the Question, I might add that Clause 2 of the Bill deals with the subject of rapid succession. It states that where the Commissioners of Inland Revenue are satisfied that Estate Duty has become payable on any property passing on the death of any person to whom Clause 1 of this Bill applies, and that subsequently Estate Duty has again become payable on the same property or any part thereof passing on the death of some other person to whom Clause 1 applies, the whole of the Estate Duty payable on such subsequent death in respect of the property so passing shall be remitted, or, in case the duty has been paid, repaid, and the property shall not be aggregated with any other property passing on such subsequent death for the purpose of 568 determining the rate of Estate Duty. That would affect the case of two brothers or some other case which might occur in the course of the war.