The Sun.
London, England, 1853-06-18 00:00:00

SUCCESSION DUTIES BILL

The house then went into committee on this bill.
On clause 7,
Sir F. KELLY begged to put two cases to the Chancel-
lor of the Exchequer. The first referred to the former part
of the clause, whereby the succession duty accrued in every
case where there was any engagement, secret trust, or ar-
rangement capable of being legally enforced. New, sup-
pose a father gave a sum of money, say 100,009/., to his
son during his lifetime, but where a written document
existed by which the son was to pay his father back an an-
nuity of 3,0001., but which was not of a nature capable of
being enforced by a court of law, would the tax be pay-
able ? The second case referred to the latter part of the
clause, by which the tax was also chargeable in any. case
where there was any engagement or arrangement witha
fraudulent intent to defeat the act. Now, suppose that in
the instance he had just put there was no written docu-
ment, but that the father had given the son the money out
and out, relying on his honour to pay him the annuity,
would the tax accrue also in that case ? He felt certain
that the clause would lead to much litigation, and that
years would elapse before the courts of last resort had de-
cided the meaning of the statute.
The CHANCELLOR of the EXCHEQUER replied that
if, in the first instance supposed, the document was not of
a character capable of being enforced in a court of law or
equity, the tax would not accrue under the former part of
the clause. With respect to the latter part, his answer
would depend upon the specialties of each case ; but when-
ever the proper court was convinced that there had been
any attempt at fraudulent evasion, it would enforce the
tax. As for what the hon. and learned member had said
about the litigation likely to ensue, that did not much im-
press him, because in matters of much less difficulty years
had clapped before a sufficient code of precedents had been
formed to establish precisely what the law was.
Sir F. KELLY suggested the actual insertion of the
words, " capable of being enforced by a court of law or
equity," which would render the meaning of the former
part of the clause perfectly clear. As for the latter part,
he did not think the right hon. gentleman's answer at all
satisfactory. Ho wished to know what would constitute
fraud within the meaning of the clause ?
The SOLICITOR-GENERAL -would assent to the in-
troduction of the words, though he thought they would bo
mere surplusage. Where property was given absolutely,
although there might be an honourable understanding or
moral engagement between the parties, it would not come
within the meaning of the bill ; but where, although the
property was given out and out, the son, for instance, gave
hack to his father by another deed, and from other sources,
an equivalent, then, although either deed, taken by itself,
would not come within the province of the law, yet the
two, when taken together, would amount to proof of a
fraudulent attempt at evasion.
Mr. VANSITTART moved the omission of the latter
part of the clause, because if it were allowed to stand
hardly any family arrangements could be made without a
lawsuit staring the parties in the face.
The CHANCELLOR of the EXCHEQUER protested
against the notion that family arrangements would be
generally obnoxious to an enactment against fraudulent
evasions. If the charge, however, was true, the parties
ought to have lawsuits staring them in the face. (Hear.)
Mr. HENLEY, Sir J. TROLLOPE, and other members,
supported the omission of the words, on the ground that
the clause would be sufficient without them.

Mr. MALINS further enforced that view, by saying that
no case could be conceived that did not fall within ono or
other of the two categories which had been specified by
the Solicitor-General.
In answer to Mr. DRUMMOND.

The SOLICITOR-GENERAL offered to substitute the
words " court of law or equity" for " court of competent
jurisdiction." There would be no difficulty in either
understanding or applying that portion of the enactment ;
but it was impossible, without some such general provisions,
to meet all the varieties of fraud which human ingenuity
could devise. He had no doubt the learned gentleman
opposite could devise one hundred such cases. (Laughter.)
The power complained of had existed for years with regard
to the legacy duty ; it would not be administered by any
other than the judges of the land, and, therefore, need be
the subject of no alarm.
Mr. MULLINGS supported the amendment.
Mr. H. BAILLIE said a memorial had been sent up
from the writers to the signet in Edinburgh complaining
that they could not understand the act owing to the strange
law terms which it contained, and expressing the opinion
that it could never be enforced in Scotland. (Hear.)
The LORD-ADVOCATE said he had gone through tho
act carefully., and thought the addition of not more than a
dozen words was necessary to render it applicable to Scot-
land. He feared the learned body from whom that report
had issued had not paid proper attention to the act.
Sir J. PAKINGTON said it was necessary that some
definition should be given of the word " fraudulent," as
used in the bill. Was it meant to be merely declaratory
of the law as it stood, or was it the creation of a new
offence ? If the former, he doubted whether the Govern-
ment had any right to stigmatise as fraudulent arrange-
ments made to evade this tax, which would be most oppres-
sive. The highest authorities in the land had differed on
this point ; he, therefore, disputed the right of the Govern-
ment to declare such matters to be fraudulent. To the
other alternative he objected more strongly, that of creat-
ing a new offence. It was most unwise for the legislature
to do anything which might shock the moral feelings of the
people, by calling that fraud which they had not hitherto
considered so.
The CHANCELLOR of the EXCHEQUER begged to
assure the right hon. gentleman that the moral feeling of
the country. was not in the smallest danger of being
shocked and annoyed in any way. (Hear.) This matter
had nothing to do with moral feeling, or either side of the
alternative which the right hon. baronet had put. He said
it was either a declaratory enactment or the creation of a
new offence. It was neither the one nor the other. It said
nothing about the meaning of fraud, nothing about what
should constitute fraud. It used language perfectly well
known to the law. (Hear.) It left that language to be
construed as it had been heretofore, in carrying out the
law; and if three judges out of four in Westminster-hall,
or any other number, had declared that such a disposition
was not a fraudulent disposition made for the purpose of
evading the legacy duty, those three out of four would
be just as free to declare that the arrangements made
under this act were not fraudulent in order to evade
the succession duty. They did not touch in the slight-
est degree the meaning of the term, but merely left it
to be declared by a court of competent jurisdiction whe-
ther an arrangement was fraudulent or not. They pro-
ceeded upon the principle of law and reason, and where
these terms applied, there it would be declared that the
party was liable to the succession duty.
Mr. T. EGERTON said they should remember that
they were dealing in this bill with the whole of the landed
property in the country. It might take a long series of
years to establish a number of legal decisions on these
points • and in the meantime every successor would be
subject' to have his case brought before a court to deter-
mine whether his succession was fraudulent or not. (Hear.)
Then the crown paid no costs. (Hear, hear.) The public
knew something of that from the customs cases. He hoped
the right hon. gentleman would consent to strike out the
words.
The CHANCELLOR of the EXCHEQUER said he
could not do so. There was no fear that any family
arrangement made for honourable purposes would be de-
dared fraudulent by any court. If the word " fraudulent"
were left out, it would make the question much wider, and
give greater scope for litigation.
Mr. MALINS said that no case had been suggested to
which these words would apply ; and the committee had a
right to assume that there was no such case, and that the
words were unnecessary. The only case which could occur
was the same as had arisen under the legacy duty, that of
a man making himself merely tenant for life of his own
luTffioci e
Gt
Ey
NR providedE L
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property, in order to evade the duty payable on his death,
defendedfor the clause as it
The
alllitehiSsOwLaslCs
stood, and said that the conceivable cases of fraud were ex-
tremely numerous.
Sir J. TYRELL hoped the hone would not so stultify
itself, that the country would ot knowwhat the
n was in-
tention of the Legislature.
Sir C. WOOD said that no one who wished the revenue
to be fairly collected could object to the clause. No doubt
there might be family arrangements of a bona fide and
honourable character ; but it was admitted on the other
side that great ingenuity would be called into. play to
evade the duty. This being -the case, ought there not to
I be some provision to meet it ?
Mr. WALTER said he wished to ask whether an ar-
rangement which had the effect of evading the duty was
to be considered fraudulent on that account ?
The SOLICITOR-GENERAL said that in the first
place a disposition which did de facto evade the duty did
not, on that account alone, become fraudulent ; secondly,
a disposition made with the express intention to do so dia
not, for that reason alone, become fraudulent ; but a dis-
position made to evade the duty must :be altended nab
some other circumstances, by virtue of which it might be
said to have been made fraudulently. Accordingly, the
words employed in this clause were, not that the court