The Sun.
London, England, 1853-05-13 00:00:00

the giving to family arrangements and to the possession'of
land a certain stability, though that ought not to bo pushed
too far, yet was an ancient part of our policy, and I am not
prepared to say that it is one I would wish to see aban-
doned. It would be going, however, too far to say
not only that you should escape the probate duty,
but that you should likewise escape every description
of tax which the State may levy from other kinds of
property on successions. (Hear, hear.) It does not appear
to me that that distinction can bo maintained with respect
to settlements in general, including land. Perhaps you
might say that there ought to be some consideration for
settlements in existence, but such a provision would impair
the provisions of your act for snore than half a century.
If the provision were demanded by justice, this considera-
tion ought to form no bar to its enactment ; but in my
view it is not demanded by justice, and therefore there
exists in the consideration I have adverted to a strong
reason against the suggested provision. At the present
moment we do no not ask the committee to vote upon
anything except the mere principle contained in the
resolution. We have adopted a form of proceeding
as nearly analogous as possible to that adopted by
Mr. Pitt in a corresponding case—namely, in the first
instance, we submit the subject in very general terms,
reserving for after consideration a number of important
and collateral questions. No doubt there are many
such questions. There is the question of the scale of
consanguinity, which gives rise to a great difference of
opinion, and which is a fair subject for difference of
opinion. (Hear.) It is known probably to the majority
of the committee that the scale of consanguinity, as now
fixed, is immensely in favour of direct succession ; which
is subject to 1 per cent. duty; while, upon the succession
of strangers (and with them are ranked extremely remote
degrees of consanguinity) the tax is 10 per cent. ; and there
are, besides, various intermediate rates, which it is not ne-
cessary now for me to dwell on. This tax of 10 per cent. is
a material item in the consideration of the whole question,
for it falls on a limited portion of the property which
passes by death. (Hear.) Yet the produce of this tax
of 10 per cent. forms a considerable portion of the whole
amount of the legacy duties received by the Exche-
quer. (Hear, hear.) It appears, by a return lately pre-
sented to the house, that while the rate of 1 per cent.
levied in Great Britain on direct succession upon the
larger amount of property yielded last year 238,0001. of
legacy duty, the rate of 16 per cent. levied upon a much
smaller amount of property yielded 490,0001. Since 1797,
while the 1 per cent. duty levied on an enormously great
mass of property yielded 8,322,000/., the 10 per cent.
yielded in the same time 17,583,0001. (Hear, hear.) Two
important questions arise with respect to the scale of con-
sanguinity. Is it equitable that a very great difference
should be made between the tax on direct succession and
the tax on the succession of strangers or persons of
remote consanguinity ? I think the difference neither
inequitable nor impolitic ? Generally speaking those who
receive property by direct succession, are educated in ex-
pectations founded on that succession ; they are trained,
and have their habits and thoughts formed in relation to
the property they are to enjoy. (Hear.) Therefore, it
would be a groat hardship to them to step in and take away
any material part of that property which they had been
taught to expect they would receive, But the successions
of strangers are successions which are commonly of an un-
expected character, and are unconnected with any question
of training or expectation. Therefore it appears reasonable
that a scale founded on this principle of consanguinity
might be maintained. I will point out to the committee
that they must make their option between two things.
They may maintain the present scale of consanguinity, but
if they determine to lower materially the rate of 10 per
cent., reducing it to 5 or 6 per cent., they must raise
the rate of 1 per cent. ; or else lose the money
now received by the Exchequer. That I think is a
vital consideration. Though at this period Ido not desire
to enter into a very full discussion upon the question to
which I adverted more than once in the course of the re-
marks,—the question, whether even though you may think
that there is no ground for maintaining any absolute exemp-
tion of any great mass of property, yet there may be good
and sufficient reasons for adopting a different machinery,
and practically, if not nominally, a different rate of tax with
respect to certain classes of property, yet it appears to me
that the present law is not only wrong in drawing too
broad a distinction—that is to say, the distinction
between taxation on the one side, and no taxation
on the ether—but is especially wrong in the way
in which it strikes that distinction. We mean, there-
fore, to make a change, which, though not precisely de-
scribed in the words of the resolution, and though the
committee will not at present be asked to give an opinion
on it, is so important and vital a portion of the plan of the
Government that it would be wrong in me to omit notic-
ing it. We propose, instead of distinguishing, as the pre-
sent law distinguishes, in favour of settled and real pro-
perty against unsettled personalty, to abolish that distinc-
tion altogether and to draw a new distinction between
property, which may be well described, not in legal phra-
seology, but, in language more popular and intelligible, as
rateable property whether real or personal on the one side,
and non-rateable property on the other. An advantage
will be given to rateable property, whether real, leasehold,
eopyhold, or by whatever technical description it may be
known, and the full burden of the tax will fall on invisible
and non-rateable property. Without referring to transfers,
the considerable burden borne in other respects by rateable
property ought fairly to be taken into view when fixing a
legacy duty for these descriptions of property. The pro-
posal we shall make with respect to rateable property is
this. We do not propose to establish a different rate of
duty ; but we propose that the person succeeding to that
kind of property should never be charged with the ditty
on any interest in the property higher than his life interest.
You may ask what will be the effect of this as compared
with charging him on the perpetuity ? That is matter of
computation, and admitting of some latitude of opinion ;
but you will not be very far from the mark if you say that
the effect of that distinction with the collateral distinc-
tions we propose to draw will be, that rateable property
would have only to pay about one-half, as compared with
the amount paid by property not falling within the de-
scription of rateable property—invisible or non-rateable
property—would not be in all cases charged on the perpe-
tuity. A person would pay where he acquired the absolute
dominion over the property, but where he succeeded to a
lesser interest he would only be charged on that. It may
be asked, why should rateable property be favoured
in this form ? It is on account of the other charges to
which it is subject, and not borne by the property to
Which we propose to apply the full rate. But it is an
object not only to give something as countervailing
the burdens borne by real property, but to take care that
you so adjust your taxes as not to allow it to become an
engine for forcing or perpetuating charges of succession.
These are our reasons for freeing rateable property. But I
may be asked—and this is a most important question—why
we think that it ought to bear a less share of the tax.
Hon. gentlemen may ask if we use this particular form for
conferring that advantage—viz., the form that the person
succeeding to the possession of rateable property shall not
bo charged on anything more than the life interest—why we
do not charge him on the property to which he has suc-
ceeded in the perpetuity, but at a lower rate. I wish to
state that question, and to bring it fully before the notice
of the committee. It is a question of very great difficulty,
requiring very impartial and very careful deliberation, and
in the discussion of which I trust every collateral considera-
tion connected with the fate of parties, of Ministers, and of
Government, may on all sides be excluded, in order that the
alteration of an arrangement so intimately connected with
the social system of this country may not be frustrated
from want of care and prudence in the adjustment. I fully
admit it is by no means decided, when you have deter-
mined that real property is entitled to some favour of this
kind, that then you ought to give this favour in the form
of charging the tax on the life interest only. But I think
the objection to charging on the life interest that will be
made is this, that it takes away from the life interest the
advantage that you propose to confer on that class of pro-
perty as compared with all others, because the person suc-
ceeding to real or to leasehold estate would, under that
plan, be liable to pay as much as if he wore succeeding to
personalty; and therefore it must fail, so far, is giving
effect to the principles laid down. But, when we take a
comprehensive survey of the mode in which the different
classes of property are dealt with under the laws which
touch upon points of this kind, I think we shall find
that there are much greater objections to the other
mode of proceeding—viz., that of charging the suc-
cessor to real or rateable property upon the perpetuity
if he gets it. It is quite obvious, if we adopt
this method of proceeding—if we charge the life
renter of the estate on his life interest, and the
person who comes into possession on the death on
the perpetuity--that we at once establish a system of law
which will work in favour of the large and against the
small proprietor—(hear)---and which will create a division
and conflict of interests among different descriptions of
landed proprietors, which, I think, it will be most undesir-
able, to say the least, to introduce. (Hear, hear.) It
would be legislating in a most iavidious sense. Those gen-
tlemen who appear here are generally connected with the
settled property of the country, and it would be in-
vidious, indeed, if we were to adopt proceedings in a
matter of this kind which would advantage the large at
the expense or to the disadvantage of the smaller landed
proprietors. (Cheers.) I am sorry to detain the com-
mittee, for I know from experience that although it is re-
lieved by its importance, the subject is one of the dryest
kind ; but I must confess, I think when you look closely
into this matter that you will find that the relation be-
tween the life renter of realty and the absolute possessor
of realty is not at all analogous to that which exists between
the possessor of money in the funds and the absolute pos-
sessor of mere personalty. The possessors of entailed
estates in this country acquire great social and great politi-
cal influence ; gives them a commanding station in the
paths to the professions, and to Parliament, and to the
various offices which lead to distinction and power. The
position of an English nobleman and English gentleman is,
on the whole, one of the most desirable the world can
show ; but there is no distinguishing line which can be
drawn between the possessors of entailed estates and the
holders of small properties that can justify a distinction in
the tax. Such are the main principles of the course wo
propose to pursue. The other course would, indubitably,
have a dangerous tendency to shake the present laws of
entail and settlement in the country in a manner I should
not wish to see, to jeopardise them, and to put them to
the risk of being considered not in their character of a
general, but in that of a class, interest. (Hear, hear.)
These are, I think, the principal reasons, first of all, why
we should propose to draw a distinction, not as the law
now draws it, but on the more just principle of taxing
the successor to rateable property on his life interest in
it. Another point of importance in the consideration
of this question, in connexion with its social bearing
—(hear' hear)—was the case of fully encumbered estates.
(Hear, hear.) Upon the principle of charging upon the
life interest in the case of a succession to an encumbered
estate, the mode of proceeding would be this. In the first
place, we should ascertain the age of the proprietors, and,
having his age, we should have the number of years' pur-
chase that we ought to charge. We should then take the
gross rental of the property, and from that we should have
to make the deductions necessary to arrive at the net rent,
because there is no reason, such as prevails in respect to
the income tax, to compel us to go upon the gross rental
in the case I have been considering. In this case the net
rental and the net interests are to be charged. Having as-
certained the net rental we must also deduct the amount
of the encumbrances, and is will, I am afraid, frequently
happen that the net rental remaining will be tremely
small in amount, and yet at the same time- and that is
precisely the conjuncture to which I wish to call attention
—there might be in the property a largo access ion of capi-
tal value. For if we take an estate that will sell in the
market for 50,0001., then we shall get a gross rental of from
15,0001. to 16,0001., net rental of 13 000/. or 14,0001.,
and a 1
and if we suppose that the property is mortgaged to the
amount of 300,0001., these
_ mortgages must absorb 12,0001.
.
of the net rental, and not leave more than 1,2001. or
1,4001. a_year to the proprietor, which will represent the
annual value of his life interest. Now, I think if we were
to charge upon the capital value, which we should do if we
taxed the perpetuity, that would be a way of putting on
the tax which must have the effect of displacing the pro-
prietor. It might be wise, lam told, for the proprietor
under such circumstances to displace himself. (Hoar, hear.)
There must be many such cases in the country. The Legis-