§ 2.41 p.m.
§ [The Question was as follows:
§ To ask His Majesty's Government whether, in view of the exemption from estate duties enjoyed by private soldiers, corporals and lance-sergeants killed in action (and similarly in the other Services), they will extend the exemption to all ranks alike; and if not, what are the grounds for withholding the exemption.]
THE MINISTER OF CIVIL AVIATION (LORD PAKENHAM)
My Lords, it is the case, as is indicated by the noble Lord in his Question, that the estates of soldiers below the rank of full sergeant (and of members of the other Services of similar rank) who are killed or die in the service of the Crown are wholly exempted from estate duty. This exemption comes down from an old provision in the Stamp Act, 1815 (which was incorporated in the estate duty by Section 8 (1) of the Finance Act, 1894), exempting from all stamp duties the property of:any common seaman, marine or soldier who shall be slain or die in the service of His Majesty.The estates of those of higher rank are granted a relief from estate duty, which may not in all cases amount to complete exemption, by Section 38 of the Finance Act 1924. Briefly, that section provides that where members of the Forces are killed in action and their estates pass to their widow or certain rear relations, the first £5,000 of the estate is exempt and there is a substantial relief on the remainder, the amount of which is dependent on the age of the deceased. My right honourable friend the Chancellor of the Exchequer considers that this latter provision does full justice to the claims of the members of the Forces who lose their lives on active service.
Is the noble Lord aware—indeed, I am sure he is—that the thoughts of those who are not killed outright often turn to their families and the position in which their families would be left? I do not feel that it is very creditable to a country to take revenue from 1171 this source. Personally, I should not like to feel in war time that I was escaping a small amount of taxation—the noble Lord has said it is a small amount—by reason of Exchequer receipts of this kind.
My Lords, I am afraid I have nothing to add to the answer which I have given, which seems to me to be entirely comprehensible and reasonable. I will certainly mention to my right honourable friend the points which the noble Lord has raised.
THE MARQUESS OF READING
The noble Lord says it is entirely reasonable. Would he agree that the principle upon which exemption is granted is that the men have been killed on active service? If that principle applies, ought it not to apply to higher ranks—officers and warrant officers—and not only to N.C.O.s and men?
I am afraid I must say frankly what my own opinion is. My opinion is that a line has to be drawn somewhere.
§ SEVERAL NOBLE LORDS: Why.
That is my own opinion and I think it is the opinion of most people also.
The noble Marquess has asked me a question. I am sure that he will with his usual courtesy, allow me to finish my reply. The noble Marquess keeps on interrupting. Now that he is silent for a moment I will resume. I was saying that it seems to me that a line has to be drawn somewhere. I think few of us would take up the position—I certainly should not—that if a millionaire were killed on active service his estate should escape duty. A line must be drawn somewhere, and it has been drawn in the way I have mentioned by the Act which was passed by Parliament in 1924, and which has not subsequently been altered by Governments of different Parties.
§ LORD LLEWELLIN
Does this mean that if a millionaire is in the ranks and he is killed his estate does not have to pay duty?
That is the decision of Parliament. I can only recommend millionaires to serve in that capacity.
I am obliged to the noble Lord for the frankness of his 1172 answer. Arising out of it, will he answer me one more question? This is a matter which materially affects the position of people accepting a commission. In my opinion most people taking a commission do not know of this decision. Will the noble Lord take steps to bring this point to the notice of everyone offered a commission?
As I have said, that is the position as it has existed since 1924. Many Governments have been in power since then. I should have thought that by now everyone likely to be affected would be aware of the decision. They have had the opportunity over many years of discovering it. If the noble Lord has any special views as to how it can be brought to the attention of those concerned, perhaps he will let me know.
The noble Lord must bear in mind that confiscatory death duties have been in operation only in recent years.
I am not sure to what death duties the noble Lord is referring—whether he refers to legislation passed recently or to changes in legislation introduced by Conservative and other Governments.
May I inform the noble Lord that I have found a Field-Marshal who was quite unaware of this point? So perhaps it is not so very well known, after all.