The Sun.
London, England, 1853-06-21 00:00:00

SUCCESSION DUTIES BILL.

Mr. C. BERKELEY said in the early part of the
session the noble lord the member for the city of Lon-
don stated that it was the intention of her Majesty's
Government to bring in a bill to alter and amend the

- -------
The house then went again into committee on this bill.
Clause 17 was agreed to.
be-
cominginterests,
teTye ahrf obeelteocsew:nßpoit
nno:gnliNehptdcrehoEeidvntei
proviso
Loepsßsi7 determination
determinationoirno
On clause 18, " Duties to be paid on the successor
nhv;
ietdhboeEuefdrtxae itnocnhf:
ac,lt,aeEsa
lease
ooLo
TfcEtoußut
purporting
s outstanding
proposedshall
baet
the date thereof to be at rack rent in respect to any in-
crease accruing to the succession on such determination."
A long conversation ensued, in the course of which,
Mr. HENLEY said the proviso would, no doubt, be an
improvement ; but was it intended to extend to leaseB on
lives in the same way as to leases for years ?
The CHANCELLOR of the EXCHEQUER replied
that the clause would make no distinction whatever be-
tween the two species of leases. The question of the per.
sons that would be in possession before the commencement
of the act's operation, stood over.
Sir F. KELLY suggested a case where a man was the
holder of a lease upon a piece of land covered with houses,
the ground rent of which was 1,000/. a year. When the
lease fell in the property might be worth 10,0001. a year.
Would the duty become payable on that increase of value
accruing? Ho might also put a case where no duty had
been paid, but in which, at some future period, leases
might fall in and increase the value of the property.
Would duty b 3 payable in that case also?
The CHANCELLOR of the EXCHEQUER said that
under the clause the operation of the bill would be exactly
analogous to that of the Legacy Duties Act.
Mr. MULLINGS begged to move that those words be
added to the proviso, "Or for a fine, or partly for a fine
and partly for a reserved rent."
The CHANCELLOR of the EXCHEQUE} said there
was a very obvious distinction between the case contem-
plated by the proviso, and that contemplated by the pro-
posed addition. In the former all the tax that was justly
due would have been paid ; whereas in the latter case the
duty on the increased value would remain unsatisfied.
Mr. FRESHFIELD suggested that difficulties would
arise as to whether a lease had or had not been at rack
rent.
The CHANCELLOR of the EXCHEQUER said that
the same point arose under the existing law, and was to be
determined by the simple fact whether or not there was
any other consideration named in the lease. If there was
not, it would be assumed that it was at rack rent.

Mr. MULLINGS suggested the words, " Or as to a lease
granted after the commencement of this act."
The SOLICITOR-GENERAL was willing to accede to
this latter suggestion.
Mr. HEADLAM said the two classes of leases which had
been referred to were very different. In the one case the
increased value on the renewal of a lease would be very
small, having arisen only from cultivation or similar causes,
and the tax ought not to be charged. In the other case,
the increased value arising from the falling in of building
leases would be veryy great, and ought to be taxed.
Mr. MALINS did not see that the difference between
cases in which the lessee paid, say a premium of 1001. and
a rent of 51., and where he paid no premium, but a rent
of 81., was so great that they ought to be treated dif-
ferently.
Mr. BARROW said it would be most unjust if the enor-
mous estates at present on building leases should be al-
lowed to escape.
The SOLICITOR-GENERAL said the proviso guarded
the possessor of property from being charged with the
succession duty on any higher value than was indicated by
the reserved rent, provided that could be considered a
rack-rent at the time the lease was entered into. It was
also applicable to leases for years ; and these two provisos
he thought would render the clause acceptable.
Sir F. KELLY called attention to the case of leases
which were renewable on a small fine, and where conse-
quently the rent could not be considered a rack-tent. He
hoped such leases would have the benefit of the proviso.
Where there was a great increase in the value of the pro-
perty between the granting and the falling in of a lease, as
of house property in the metropolis, he understood such
property would be liable ; but if any doubt existed, it
would be better to set it at rest by the introduction of a
few words into the clause.
The SOLICITOR-GENERAL said, they could not draw
a line without placing on opposite sides cases that were very
similar. There was, however, a great difference between
leases granted at a rack rental, and those on which a small
premium was payable. But there would be no hardship,
as all the successor would have to pay on would be the dif-
ference in amount between the reserved rent and the actual
value. There were numerous cases presenting small points
of difference ; but it was beyond the power of humanity to
legislate for every one of these.
After a few words from Mr. Michell, Mr. Headlam, Mr.
Mullings, and Mr. Spooner'
The CHANCELLOR of the EXCHEQUER said that
the general rule of the bill was this :—That where there
bad been alienation, and in consequence of that alienation
the alienee became liable to a succession duty, that duty
would be determined by the relation in which the alienor
of the property stood to the successor.
The proviso was then agreed to.
On the question that clause 10 do stand part of the bill,
Mr. HENLEY called attention to an alternative in tho
clause which gave the tax collectors the option of either
enforcing the tax the moment the succession took place, or
not until the rents and profits were received.
The CHANCELLOR of the EXCHEQUER said eel.°
was a provision in a subsequent clause which would prevent
the duty being enforced immediately. Or, if that were not
so, words to that effect would bo introduced.
Sir J. PAKINGTON referred to a case where a gentle.
man had inherited property from his uncle, but the aunt
continued in possession for life. Ho was about to build a
house on the estate for his own convenience, and wished to
know whether, under this bill, he should be subject to the
succession duty on the money he laid out in building. He
(Sir John) should be glad to have the opinion of the learned
Solicitor-General on this point.
The SOLICITOR-GENERAL said if the right hon.
baronet would give him a copy of the case, he should bo
glad to give his opinion on it. (Great laughter.) From
the statement now made, assuming that the widow would
have no interest in the house, he presumed the duty would
not be payable. If the widow was willing to surrender her
life interest, pro tanto, so as to enable the reversioner to
build a house, it would be impossible for that to be consi-
dered as part of the life interest.
Sir J. PAKINGTON put some other similar questions,
to which
The SOLICITOR-GENERAL replied that it might be
easy to answer those questions, but were he to do so, he
might be called on to answer a number of others, where the
circumstances slightly differed.
Sir J. PAKINGTON said this was a case which had
come under his own knowledge, and there were doubtless
numerous others where great hardship would be inflicted ;
for instance, where the reversioner had already laid out
his money, and would not take the precautions pointed
out by the Solicitor-General.
Mr. W. WILLIAMS said ho could not but admire the
care taken to protect real property under this bill. (Hear,
hear.) Real property, it should be remembered, paid only
half the duty that would be paid by other property. If
the gentleman referred to by the right hon. baronet had
invested his money in funds or the shares, he would have
been taxed much more heavily. There was not a servant
in the right hon. baronet's employ who would not have to
pay on a legacy of 201., left him by a stranger in blood,
twenty times as much as the gentleman whose case had
been referred to. (Hear, hear.)
Mr. H. DRUMMOND complained of gentleman speak-
ing without understanding the operation of the clause.
Mr. WILLIAMS said his observations were in reply to
the remarks of the right hon. gentleman (Sir J. Paking-
ton), and were not intended to apply to the clause itself.
Mr .PH
saidL
that i 3{ Ol tr
'he would con-
sider whether a clause might not be introduced enacting
TheAfAfter
e ra
SOLICITOR few
words-
GENERALfrom
that where money was laid out by the reversioner to an
estate before the reversion accrued the money so expended
should not be taken into account in the computation of the
value of that estate.
The CHANCELLOR of the EXCHEQUER said the
hon. gentleman the member for Lambeth was justified in
speaking as he did, because the right hon. gentleman (Sir
J. Pakington) had instanced the particular case he put as
a proof of the unwisdom of the general principle of the
bill. But that case applied to leasehold property, and it
seemed rather strange that the right hon. gentleman only
now found out that it was so exceedingly oppressive.
(Hear.) He admitted that difficulties appertained to the
bill ; but they were not now introduced for the first time,
having existed in the same form, or rather in a greatly
exaggerated form, in the Legacy Duties Act. (Hear.)
Sir J. PAKINGTON expressed his satisfaction at the
intention of the Solicitor-General. With regard to the
remarks of the Chancellor of the Exchequer, that he had
not found out till now the oppressive nature of this tax,
he had only to state that he had never been called on to
express an opinion of the existing legacy duty. (Hear.)
If he had been called on to give an opinion, he should not
hesitate to declare that no tax could be more oppressive
or more painful in its character, for it was on misfortune.
(Hear.) But it was no reason because this tax—which
was a bad tax— existed already, that it should be extended
to real property.
Mr. WILLIAMS said that if a poor widow had been
le
lofdefaatlnl22,(3)(osf/p.il
re: h,it,:yTec. her
cent. (Hear,
Pakington)
itbe
okao-
r:;(-1
property,ros.
t)h seem
bTewmthioteutytl
to be
heb
ert
dei
aware
Nhlhvi brat herl(ed,tnht.
aoat
gentle.aiguota more
id
than one-third of the existing rateable property paid legacy
duty and probate duty also. (Hear, hear.)
The clause was then agreed to.
On clause 20, which proposes that the interest of the
successor to real property is to be considered an annuity,
Sir F. KELLY said that this bill, if carried out in its
present form, would produce inequalities and injustice as
great as any that existed under the Income Tax Bill. He
would put the following case. Suppose two children of
four years of age each were left estates of 1,0001. a year.
Their interest would be equal to 20 years purchase, or
20,0001. He would suppose those two children to be in
make them liable to the tax of 5 per cent., that was to say
that degree of relationship to their predecessors, that would
1,0001., which was to be paid, as the clause was now
e end of te five years,
one of these children might die at th
framed, in five years, at the rate of 2001. a year. Now,
when the estate would pass away from him and perhaps
from his family ; the other child might live for 50 or 55
tithe person onl pay the
the estate for this lengthened paid
La was paid by the other in five
years after that period ; so that the person who enjoyed
same
amount of duty h