The Sun.
London, England, 1853-07-15 00:00:00

SUCCESSION DUTY BILL.

On the motion for considering the amendments on this
bill,
Mr. BARROW moved in clause 1 the insertion of the
words, " except money secured on heritable property in
Scotland," after Ireland. He saw no reason why money
secured by heritable bonds in Scotland should not be placed
in the same condition as money secured on land in Eng-
land and Ireland. (Hear.)
Mr. BASS said that there could be no reason for exempt-
ing the money secured on land in Scotland which was not
equally valid in respect to England and Ireland.
The CHANCELLOR of the EXCHEQUER said that
the only reason for the exception made in favour of Scot-
land was, that by the law of Scotland heritable bonds were
regarded as real property, and were liable to be charged for
the purpose of rating to the poor. But he must admit that
this liability to rating only affected heritable bonds, in
common with other descriptions of property. (Cheers.)
He admitted that there was a great deal to be said in fa-
vour of the view of the hon. gentleman, and he would
therefore accept the amendment he proposed.
The amendment was then agreed to.
Mr. FRESHFIELD proposed the following addition at
the end of clause 2 :—" And for the purpose of governing
and defining the several provisions in this act contained, it
is hereby declared and provided that the object and inten-
tion of the legislature is to assess the tax hereby imposed
upon property to which any person shall succeed without
pecuniary consideration under any settlement or other dim-
, position, or by operation of law, in such and the like man-
-1 ner as if the sane property or interest had been acquired

by will or by way of distribution in case of intestacy.
His object in proposing the amendment was to render the
interpretation of-the act more-clnar. • ' •
The CHANCELLOR of the EXCHEQUER opposed the
amendment; first, on the general ground that it would be
an unsafe course to enunciate large definitions of which it
was impossible to foresee the effect in the construing of the
statute ; and, secondly, because in particular cases the
amendment would cut across decisions which the house had
already frequently come to during the progress of the bill
in committee.
The amendment was negatived. •
On clause 7,
Mr. MULLINGS proposed to insert the words "in such
property" after the word benefit. He hoped the right hon.
gentleman would agree to the amendment, because the
words were so obviously required, and so much in accord-
ance with the principle which the right hon. gentleman
had laid down himself, that he could not but think they
were omitted through mistake or inadvertence. He wanted
to know if it was the meaning of the clause, that without
there being in favour of a grantor any interest in the pro-
perly, but merely soma mere matter of personal security—
he was to be taxed on the succession, because if so it would
be contrary to what he understood to be the spirit of the
act.

The SOLICITOR-GENERAL objected that if the words
woposed by the hon. gentleman were inserted in the clause,
it would open a door for the extensive evasion of the tax.
If a man sold his estate for an annuity, or any other bene-
fit, being a bona fide exchange, it would not fall within the
operation of the clause ; but if there were a reservation of a
co-equal interest, the duty would be chargeable on the suc-
cession to that interest. The clause was worded for the
purpose of taking in those cases in which an interest was
reserved to the grantor, and to prevent evasion.
The amendment was then put and negatived. Several
verbal amendments on the paper, in the name of the Chan-
cellor of the Exchequer, were put and carried.
Mr. HEADLAM moved an amendment in clause 20 to
omit the words " or of any lease falling within the opera-
tion of the 24th section of this act." The object of the
clause was to exempt leases originally held on a rack rent
on their falling in, but it was necessary to take care that
the exemption should not apply to other leases, which it
would if the words were retained.
The CHANCELLOR of the EXCHEQUER was dis-
posed to acquiesce in the amendment on the ground that
the words which hail been introduced on the suggestion of
the hon. and learned gentleman opposite would exempt
from the tax any increase of value on the falling in of
leases generally.
The amendment was put and agreed to, and
Mr. MULLINGS moved an amendment in clause 21,
with the view of making the scale of duties established
under the Legacy Act (the 36th of George III.) applicable
to life and other terminable interests under this act. Ho
admitted that the effect of this amendment, if carried,
would be considerably to reduce the scale of duties ; but
he had the less apprehension on that account, because
when the Chancellor of the Exchequer brought forward
this measure he estimated the produce of the tax at about
two millions only, whereas, from the best information he
had been able to collect, he believed it would amount to at
least 2,300,0001. or 2,400,0001. Under these circumstances
he thought there was uo occasion to put on a greater
pressure than the adoption of the tables of the Legacy Act
would impose ; the more so that one effect of the bill
would be to do what was never contemplated, viz., to in-
crease the legacy duty as well as to impose an additional
charge upon real property.
The CHANCELLOR of the EXCHEQUER, with re-
gard to the amount which the tax would produce, observed
that there were very many elements of uncertainty. He
admitted a nett benefit of two millions 2 • but in doing so,
he proceeded on the assumption that when the state of the
revenue would permit the house would reform the probate
duties, which could not be done without a sacrifice of re-
venue. (Hear.) It might be that in taking 30 years as
the average of successions, he had taken too long a term ;
but in the successions in the peerage, where they had some-
thing like a test, he found the rate of successions was much
nearer his calculation than that of the hon. and learned
gentleman. But the question was not as to the demonstra-
tiveness of the one estimate or the other, nor would he say
that the tax might not yield something more than he calcu-
lated upon, but ho could say truly that he had laid before
tlie-mthe best estimate he could, and the house would not
act wisely in putting it down at a larger amount. The
hon. and learned gentleman told them they would get
something by the Legacy Act, but the present Legacy Act
fell upon capital, and with reference to capital they had
nothing to do with the tables. It was simply upon the life
or terminable interests that the table would come into
operation ;• so that the results upon the legacy duty would
be insignificant, and would be fully balanced by the change
of the law as to leaseholds, which they were about to put
upon the footing of real property, in consonance with the
principles of fairness and justice. (Hear, hear.) The hon.
and learned gentleman had asked how they intended to
proceed with regard to leaseholds. The answer to that
question was extremely simple. If the lease were for a
term of years it told at once how many yesrs it had to run,
and the interest would be charged accordingly. By the
table (No. 3) in the schedule the value would be estimated
according to the number of years and the duty charged
upon that amount, and if the lease was for lives it was re-
ducible to value in the same way. The value of the lease
would be compared with the value of the life that succeeded
to it; and if the value of the lease was the lesser interest,
it would pay on the entire value; but if the value of the
lease was of a greater number of years' purchase than the
succeeding life, the charge would be on the value of the
life. (Hear, hear.) The hon. gentleman complained that
the effect of the plan proposed would be to increase the
value of the life interest. It would do so, and for this
reason—that the value of lives had increased. (Hear.)
The tables of the reign of George 111. did not fairly repre-
sent the value of life iu this country now, whatever they
might have done when they were framed. When the hon.
and learned gentleman referred to the number of years'
purchase of lives at 3,4, 5, and 6 per cent. ,he spoke beside
the mark, and mixed up two things that were distinct.
The value of human life consisted of two elements—first
the probability of the life, and next the pecuniary value.
The probability was estimated according to the scale of
longevity, but the pecuniary value must depend upon the
value of money. The hon. and learned gentleman said
that he (the Chancellor of the Exchequer) took 3 per cent.
as the basis of his calculations instead of 5 ; but he did
nothing of the kind. He took 4 per cent. as his basis ; and
that, too, was the basis of the act of 36 Geo. 111. If the
hon. and learned gentleman thought the tax proposed by
the bill to be levied upon successions let him move that a
lower rate be substituted; but let him not attempt to ar-
rive at that result indirectly by an amendment like that he
had submitted.
The amendment was put, and strangers were ordered to
withdraw, but the amendment was ultimately negatived
without a division. _ _

Mr. W. WILLIAMS moved an amendment in clause 21,
line 30, to leave out the words " by eight equal half-yearly
instalments, the first of such instalments to be paid ;" and
in line 34, to leave out the words " and the seven follow-
ing instalments at half-yearly intervals of six months, each
to be computed from the day on which the first instalment
shall become due ; provided that if the successor shall
die before all such instalments shall have become due, then
any instalment not due at his decease shall cease to be
payable, except in the case of a successor who shall have
been competent to dispose of a continuing interest in such
property, in which case the instalments unpaid at his death
shall be a continuing charge on such interest, in exonera-
tion of his property, and shall be payable by the owner for
the time being of such interest." His object was to re-
quire the payment of the duty in 12 months, instead of
extending it over a period of 4i years. The system of, in-
stalments would render a most complicated system of -ac-
counts necessary, and would in a short time bring one-
half the estates of the kingdom within the operation of
the act. Then consider how that complication would be
increased by the application of the act to small properties
acquired by means of freehold land and building societies,
which were spreading throughout the country, and in some
of which as many as 20,000 shares had already been issued.
The amount of the tax, as compared with the value of the
succession, was comparatively trifling, and was much less
onerous than the legacy and probate duties, which were
required to be paid within a month. There was no rea-
son, therefore, why it should be extended over a period of
41 years. _ _

The CHANCELLOR of the EXCHEQUER opposed the
amendment. While fully recognising the hon. gentleman's
general principle of placing real property upon the same
footing as personal property in reference to the tax charge-
able on succession, he desired to avoid interfering with
landed property in such a way as would interfere with the
possession of property in this country. In case of life in-
terests, where the successor would take nothing but his
interest from year to year, he presumed his hoe. friend
would not call up at once upon the whole
value ; and
ti 4; smallpay proprietors, the amend-
wituhpon regard him
amend-
ment would operate with great severity, and would give a
benefit as against them to the larger proprietors. When
they came to the practical consideration of the tax, he ad-
mitted that it might be proper to consider the mode of
levying it in reference to very small properties. To divide
it into eight separate payments would make it difficult of
collection, and the expense of such a mode might probably
swallow up the greater part of the tax. (Hear.) That,
however, was a point to which he had not yet given con-
sideration, and it was one of but small importance, as
compared with the great object and principle of the tax.
He thought the discretion which was evinced by the area-
sury in all similar cases might be depended upon in this
for making such arrangements iu regard to the collection
as would be fair and satisfactory to all parties. Ad-
mitting that the present exemption from taxation on
the succession to property should not be maintained, it
became a question on what principle the tax should
be laid on. It was most undesirable, he thought, to
charge the estate with debt, immediately on the succes-
sion. (Hear.) It was obviously opposed to true policy,
to force the successor by law to do so—(hear, hear)
—and it was contrary to ordinary feeling and to policy
also to force men to cut up their estates and sell portions
of them to pay the duty charged on their succeding to them.
(Hear hear.) It followed then that they must modify the
payments to the tax so as to enable the parties to pay it
without resorting to either of these alternatives, and to
provide that it should be paid out of the income and not
out of the capital. (Hear, hear.) In cases of direct taxa-
tion, the tax would not certainly amount to a very heavy
burden ; but where the succession was indirect, its irePoel;
tion would require some forethought to enable it to be Pal, ,a
out of the annual income, without sacrificing the capital.
In looking upon the payment by instalments in the light
of a deduction from the amount of the tax, the Proper way
to meet the question would be to charge interest upon the
amount remaining over, but that he thought his hon.
friend (Mr. Williams) was not prepared to ProPo.se. As
the bill stood, the tax might be paid out of the income,
and being so, it would not occasion any violent change in
the ownership of property, or interfere with those old at-
tachments and traditional feelings which are mixed up
with the possession of land in this country. (Hear, hear.)
Mr. MULLINGS said he had heard with satisfaction the
powerful speech of the right hon. gentleman against the
whole bill. He wished to disabuse the hon. member for
Lambeth of the notion
per cent., d 1 per cent. for legacy duty.
that a legacy of 20/. paid a probate
had nothing to do with l • to
As
duty
b Probate
per t y
legacies. A
lney duty being payable in 21 days, that was never the
case, for an executor had six months to prove the will ;
and, in fact, a year was the ordinary period for paying
legacy duty.
Mr. PHILLIPS expressed his surprise at the assertion
of the hon. member for Lambeth, as to legacies paying pro-
bate duty, and ho hoped if the hon. gentleman had acted
as an executor and had charged that duty, that ho would
ease his conscience by refunding it. (Laughter.)
Mr. 'WILLIAMS withdrew his amendment, and in doing
so again urged that the probate duty was payable on lega-
cies, and that ho said so on the authority of the most mai.
nont proctors.
Mr. MULLINGS moved to add to clause 23 the follow.
ing proviso :—" Provided also, that in estimating the duty
either for charge of duty or for assessment on commutation,
no timber or wood shall be included which may have been
disposed of by the successor in ozchaogo for timber used 14

building or repairs on the property comprised in the suc-
cession, or for the protection thereof, and that allowance
and deduction shall be made to the amount paid by the
successor for all timber or wood purchased for such build-
ings or repairs."
The CHANCELLOR of the EXCHEQUER, although
he did not think it necessary, acceded to the proviso.
Mr. HENLEY said the right hon. gentleman had held
out a hope that in this clause he would. insert some mini-
mum ; would he state whether he intended to do so . „
Mr. E. DENISON said that the proviso of the hon.
member for Cirencester seemed to him to propose to exempt
wood cut for repairs, which was already included in the
exemption for necessary outgoing, and thus to allow for the
same repairs twice.
Mr. MULLINGS explained that it referred to cases
where timber was bought for repairs, the price of which
exceeded the sum received for wood cut and sold for the
purpose of meeting the expense of those repairs.
After a few words from Mr. RICE,
The CHANCELLOR of the EXCHEQUER said he had
assented to the proviso somewhat hastily, and, on conside-
ration, there were certain points with regard to which he
must qualify that assent. The proviso of the hon. gentle-
man included timber used in " buildings" and repairs.
That might apply to an entirely new house, which would
be an improvement, and ought not to be exempt. It was
on a different footing to rebuilding and replacing, which
might be included in repairs. He must therefore object to
the word " buildings." He did not think the words "or
for the protection thereof," were required, as that to which
they applied was included in the term " necessary out-
going." Then the last words of the proviso, " that allow-
ance and deduction shall be made to the amount paid by
the successor for all timber and wood purchased for such
buildings or repairs," would lead to perplexity • and ho
thenght they should be limited in their meaning to " ne-
cessary outgoings," or be dropped altogether.
After a few words from Mr. CHRISTY and Mr. MUL-
LINGS.
The SOLICITOR-GENERAL said there was no neces-
sity for the first part of the proviso, for timber given in
exchange was not included in the clause. If timber was
bought for repairs, it was included in " necessary out-
goings," and the only effect of the proviso would be to
throw doubt on the words " necessary outgoings." He
would move as an amendment, the following, " provided
that no duties be levied on the net amount of money re-
ceived for the sale of timber or wood in any one year, un-
less such net amount shall exceed 101."
Sir W. JOLLIFFE wished to call the attention of the
right hon. gentleman opposite (the Chancellor of the Ex-
chequer) to the fact that he had all along spoken of this as
n tax upon rateable property. Now he (Sir W. Jolliffe)
would suggest the question whether timber fairly came
within that denomination.
Lord J. MANNERS wished to ask a question of the
Chancellor of the Exchequer. In the case of a large tract
of woodland, where timber was felled after it passed to the
successor, would the original value of the land be taken
into consideration ?
The CHANCELLOR of the EXCHEQUER—We know
nothing of original values ; we look to the annual income
only.
Sir J. PAKINGTON did not think this answered the
question of the noble lord (Lord J. Manners).
Mr. CAYLEY, in reference to an amendment which was
to be moved by the Solicitor-General when the present
one was disposed of, asked that the limit under which duty
should not be payable upon the net proceeds of timber
might be fixed at 201. instead of 101.
Mr. MALINS thought that it would be better to leave
timber out of the question entirely. Timber if productive
would, as a matter of course, form a part of the annual
value of the land • if unproductive it need not be taken
into account. If the forms of the house had permitted,
he would have moved that the entire clause be left out at
that moment ; as it was, however, he would make that
motion at a subsequent stage.
Mr. VANSITTART thought that the question put by
the noble lord (Lord J. Manners) had not been sufficiently answered. In order to give the Chancellor of the Exche-
quer an opportunity to reply more fully he moved the ad-
journment of the house.
The SPEAKER intimated to the hon. member that
such a course, by permitting a member to address the
house several times upon the same question tended
seriously to render the debate irregular.
The Ifori. MEMBER then withdrew his motion.
After a few words from Mr. V. SMITH,
The house divided. The numbers were—
For the amendment
Against it
Majority —42
The SOLICITOR-GENERAL then moved that the
following provision be inserted at the end of the 23d
clause :—" That no duty shall be payable on the net money
received f rom the sale of timber, trees, or wood in any one
year, unless such net monies shall exceed the sum of 101."
—Agreed to.
The CHANCELLOR of the EXCHEQUER then moved
that the word " open" be inserted before the word " mine"
in the 26th clause. This was to do away with any ques-
tion as to whether mineral property unopened was a mine.
—Agreed to.
Mr. KENDALL moved an amendment on the clause
relating to mines, the effect of which was that nothing
should be deemed a mine that had not been in work twelve
months prior to the succession.
The CHANCELLOR of the EXCHEQUER said he
could not accede f o the amendment. The enactment as it
stead might be imperfect, but no case had been shown
wh re individuals would suffer unduly. There were great
difficulties connected with mining property, and he was
content that they should be solved to the disadvantage of
the crown. He did not believe that, under the bill as it
stood, any individual would suffer wrong. There was no
case for which it did not adequately provide. The successor
had his choice of two methcxls by which he might be charged
and either the one or the other would prevent him from ex-
cessive charge, except in one contingency—the total and absolute failure of the ore in a mine. These eases only oc-
curred in Cornwall, and there was a special provision to
meet 'them, whereby the commissioners might remit
any duty that had been overcharged. This being so, he
hoped the amendment would not be pressed. As to a
mine not being deemed a mine that had not been in
work twelve months, he knew a case of a mine having
produced 9,0004 in four months, after it had been closed
for two years. He hoped the amendment would not be
pressed.
The amendment was then negatived without a division.
Mr. MULLINGS moved an amendment on page 15,
line 5, after the word " property " to insert " within,
three calendar months after the happening of the suc-
cession."
The CHANCELLOR of the EXCHEQUER said the
clause was better as it stood, which fixed the first payment
on the rendering of the account. If the limit of 3 months
were inserted, it might happen that the property would
not be realised in that time.
The amendment was negatived.
Several verbal amendments were proposed by the Chan-
cellor of the Exchequer, and agreed to.
Mr. MULLINGS moved to insert the words, " except
Muniments of title '°
The CHANCELLOR of the EXCHEQUER said nothing
would inducehim to accede to the amendment. He would
rather drop the clause, and the condition of the person
taxed would then be much worse. The " phrase, " muni-
ments of title " was so large, that it included everything ;
it would include not only the deeds relating to the title, but
everything external, even rentals. The real question was,
whether, when the house granted them a tax, it would give
th government the means of levying it justly, or they
anouid levy it at random ? It had been assumed that the
sole intention was to lay the tax on land. On the con-
trary, the great object was to lay it on personalty, and it
was impossible to levy the tax justly, unless they had
access to the documents.
Mr. MALINS said " muniments of title" related only to
land and not to personal property, and on his side the
house they were ready to allow inspection of documents
relating to personalty, because there was nothing tangible ;
but that was not the case with regard to land. This was
the first time an attempt had been made to interfere with ,
the right of the owner of land to hold his title deeds
against all the world, to give the Crown the right of in-
spection, and that power ought not to be given without
most overwhelming reasons. There were reasons with re-
gard to personalty, as they could not ascertain the inte-
rests of the parties without ; but land was tangible ; and
when it was known that the owner had died, all that was
necessary for the tax collectors to know, in order to levy
the tax, was the degree of consanguinity of the persen who
succeeded. He had no objection to allow inspection of the
rental, and " title deeds to real estate," such as those
given in an abstract. He hoped the right hon. gentleman
-would not insist on this unconstitutional power.
Mr. J. G. PHILLIMORE agreed with the observations
of the hon. and learned gentleman who had just sat down.
The SOLICITOR-GENERAL said unless this clause
stood there would, in almost every case, be a necessity for
the Crown to apply to the Court of the Exchequer, and
then the production would be enforced. The clause would
the
the production only of the instrument under which
party succeeded to the e. tate. All the deeds by which
the estate was handed down would be sacred, as they had
hitherto been last instrumen ;
t all that would be required would be the
.
The committee then divided—
For the amendment ...
Against it,,~,
132
...............
_ _

---
Majority .......... -.. . - -
The clause was then agreed to.. ......
".******••••• 32
The
for Monday report
next. was brought up, and the third reading fixed
GOVERNMENT OF INDIA. BILL.
On the house going into committee on this bill,
Mr. BRIGHT said he had understat
hon, gentleman did not mean to proceeood d withth e right
at
that late hour. [lt was a quarter-past 11.] the the right
Sir C. WOOD had no wish to proceed with any clauses
which were likely to be opposed.
Clauses 5 to 8 inclusive were then agreed to.
On clause 9, enacting that six of the directors not ap-
p
yoearsinted blydiathe crown should be persons who had served 10
in n,
Mr. BRIGHT said he hoped the right bon. gentleman
would consent to alter the clause so that the merchants
and others who had resided in India, but not under either
the crown or the company, should be eligible. The hon.
member for Honiton (Sir J. Hogg) who was such a dis-
tinguished member of the Court of Directors, was in India
only a member of the legal profession. There were many
merchants who possessed quite as much information with
regard to India as any official persons. By altering the
clause so as to allow either the nominees of the crown or
the elective body to be composed of persons who had not
been in the service of the company or of the crown, he
thought the right hon. gentleman would not injure his
bill, but improve it. (Hear, hear.)
Sir C. WOOD said the bill did not exclude the dais to
which the hon. gentleman had refcrced. There were to be
'ix seats opened co the world. He thought it desirable
that am of the elective directors should be persons who had
had considerable official experience in London ; and by the
bill the Court of Proprietors were restricted as to one-half,
and unrestricted as to the other.
Mr. BRIGHT said, under the proposed arrangement,
Sons would be at full liberty to choose six per-
sons who had not been in India at all ; and in all proba-
bility the sel(eucteiaorn
in the city. would be made from the great houses
restriction of twelve of What he complained of was the
service of till'
ee directorsuo to persons who had
been in the s •
(Hear, hear.) Unless th© rightvernment or the company.
to alter the clause by the time hen.
gentleman undertook
the bill was again be-
fore the house, he should move thZ', the chairman do re-
port progress.
Mr. V. SMITH could see no solid objection to the
ouidnchester, and
suggestion of the hon. member forw
hoped the right hon. gentleman
adopt it. consent to
Sir J. HOGG thought it would be best to omit the 1 um.
altogether. He agreed with the hon. member for
liffacuet,w
ter, that the six directors, the choice of whom was left open
-
would probably consist of persons who had not been in
India at all. At one time he had been of opinion that the
selection of the crown- nominees should be wholly unre-
istiicted ; but he now thought that that would end in a
political selection. (Hear, hear.)
`--314 BRIGHT said he proposed to insert in line 42, t