TRUSTEE (WAR DAMAGE INSURANCE) BILL [H.L.] (Hansard, 11 June 1941)

§ THE LORD CHANCELLOR (VISCOUNT SIMON)
My Lords, I beg leave to introduce a Bill to remove doubts as to, and to supplement, the powers of trustees in relation to insurance against war damage. As it is desirable to make it publicly known at once that the Government are introducing this Bill, I would ask leave of the House to depart from the usual procedure on a First Reading and say a few words. It has been brought to my attention that in certain quarters doubts have been felt as to whether trustees have power to insure against war damage chattels included in the trust. Your Lordships will agree that trustees ought to have the same power thus to protect chattels under their trust as has everybody else. Accordingly, the Government are at once introducing this Bill to establish that trustees do have this power. The provision will be retrospective, so as to cover the action which some trustees have already taken. I move that this Bill be now read a first time.

§ THE EARL OF CLANWILLIAM
My Lords, I suppose that there is no compulsion in this Bill to force trustees to insure chattels?

§ THE LORD CHANCELLOR
No, the noble Earl is quite right. The scheme of insurance for chattels, as the noble Earl is aware, is one which permits owners of chattels to insure them against war risks. This Bill will make it clear that trustees holding chattels in trust have the same powers as the rest of us, but there will be no element of compulsion.

LORD FARINGDON
My Lords, I should like to put a question to the noble and learned Viscount. If trustees were to insure heirlooms out of the trust funds, would the money so expended be counted as part of the beneficiary's income for Income Tax purposes, or would it be deducted before the income was arrived at, since it would not be paid to the beneficiary?

§ THE LORD CHANCELLOR
My Lords, the noble Lord will perhaps remember that a section of the War Damage Act—I think that it is Section 82—provides that the premiums which are paid to insure chattels against war damage are to be regarded as an expenditure of capital. I presume that one reason at least is that we hope that this will not be something which will go on for very long. There will be no question, therefore, of any deduction for purposes of Income Tax, because, as the noble Lord is aware, deduction of payments of premiums for Income Tax purposes is possible only if the expenditure is in the nature of income expenditure.

§ LORD MANCROFT
My Lords, I should like to ask a further question. I assume that a man who is a trustee for property must insure against fire; if he does not, and the property is destroyed by fire, those who are to benefit would have a grievance against the trustee for not so insuring it. In the case of war damage, would there be the slightest excuse for a beneficiary to bring a complaint against the trustee who did not insure chattels under this Bill?

§ THE LORD CHANCELLOR
My Lords, perhaps I may make the suggestion not only to the noble Lord but to the House as a whole, that it would be as well to discuss these matters on the Second 380 Reading of the Bill, which will take place at the earliest possible moment. I should be unwilling to turn my rather unusual practice into the initiation of a discussion at this stage, although I quite appreciate the point which the noble Lord makes.