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

SUCCESSION DUTIES BILL.

The house then went again into committee on this bill.
Clause 17 was agreed to.
On clause 18, " Duties to be paid on the successor be-
coming entitled in possession ; but in case of outstanding
interests, on the determination thereof."
The CHANCELLOR of the EXCHEQUER proposed
the following proviso :—" Provided that no duty shall be
payable upon the determination of any lease purporting at
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 leases on
lives in the same way as to leases for years?
The CHANCELLOR of the EXCHEQUER replied
that the clause would make no distinction latever 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 saggested 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 1,0001. 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 be 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 EXCHEQUER 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 very 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 bo 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.
Millings, and Mr. Spoouer,
The CHANCELLOR of the EXCHEQUER said that
the general rule of the bill was this :—That where there
had 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 19 do stand part of the bill,
Mr. HENLEY called attention to an alternative in the
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 there
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 be 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. He 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 be
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 Canto, 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 he 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, ho 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.
After a few words from Mr. PHILLIMORE,
The SOLICITOR-GENERAL said that he-would con•
Bider whether a clause might not be introduced enacting
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 au 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
left 201. by her father-in-law, she would be liable to a tax
of 12. per cent. (Hear, hear.) They had heard a good
deal of late of rateable property, but the right hon. gent]: -
man (Sir J. Pakington) did not seem to be aware that more
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
great as any that existed under the Income Tax Bill. 310
would put the following case. Suppose two children of
four years of age each wore left estates of 1,0001, a year.
Their interest would be equal to 20 years' purchase, or.
20,0001. He would suppose these two children to be iu
that degree of relationship to their predecessors, that would
make them liable to the tax of 5 per cent., that was to say
1,0001., which was to bo paid, as the clause was now
framed, in fire years, at the rate of 2001. a year. Now,
ono of these children might die at the end of the five years,
when the estate would pass away from him and perhaps
from his family ; the other child might live for 50 or 55
years after that period ; so that the person who enjoyed
the estate for this lengthened period woulttonly pay the
1 same amount of duty that was paid by the other in live

years. Was this justice ? Was it not rather strikingly
unjust and unequal? (Hear, hear.) Now he proposed to
remedy this injustice and inequality in a very simple
manner, namely, by enacting that the 1,0001. duty should
be levied, not by instalments of 2001, for five years, but
by an annual payment of 001. a year as long as the indi-
vidual should live ; that was to say, he would levy the
duty in proportion to the duration of the enjoyment of the
estate by the individual. Ho was aware that 1,0001.,
raised by 501. a year for a man's life, was not quite equiva-
lent to 1,0001. raised iu five years at 2001. a year, and that
it might he necessary, on that account, to make a small
addition to the amount of the tax. According to his pro-
posal, then, if the person lived but two years, he would
only pay 100/. ; but if ho lived 80 years, ho would have to
pay 501. a year for that period. He would not propose
any alteration in the clause till he heard what answer the
Government gave.

The CHANCELLOR of the EXCHEQUER said he was
not certain whether the honourable and learned gentleman
meant to apply his remarks to all descriptions of property
or to real property only. (Hear, hear.)
Sir F. KELLY said that he confined his suggestion to
that which was the subject of the clause, but he would
have no objection to apply the same principle to personal
property if the circumstances were strictly analogous.
The CHANCELLOR of the EXCHEQUER said he did
not think the hon. and learned gentleman had well con-
sidered the nature or the consequences of his own sugges-
tion. The hon. and learned gentleman said it was urgent
that the change he proposed should be made on the ground
of injustice, but if it was urgent in the case of real pro-
perty, it vas more urgent in the case of personal property.
(Hear.) The hon. and learned gentleman drew a very
piteous case of two children of four years of age coming
into the enjoyment of 1,0001. a year, but he ought to recol-
lect that in the case of personal property the tax—and
therefore the injustice--was equal. The hon. and learned
gentleman proposed to substitute an annual payment for
that proposed in the bill, as a means of remedying the in-
justice and inequality which he said existed ; but how
would that apply in the case of a person coming into pos-
session of unsettled property, where the party had to pay
ten per cent. legacy duty and 2A per cent. probate duty ?
(Hear, hear.) The effect of such a change would be to
break up the legacy and probate duties. (Hear.) He (the
Chancellor of the Exchequer) saw no political or social evil
or injustice in the present mode of raising the tax. Did
the hon. and learned gentleman suppose, when he talked
of a child of four years old coming into the enjoyment of a
property, that the demands upon that child were as heavy
as when he was 30 or 40 years old ? The hon. and learned
gentleman did not think so. What then became of the
inequality? The care of the hon. and learned gentleman
seemed to be for that class of pirsons whom the late Syd-
ney Smith described as " the little legislators who were
receiving the plums ant cake after dinner." (Hear, and
laughter.) The principle of a succession tax was, that it
was a tax on the transference of property from one gene-
ration to another ; but the hon. and learned gentleman
eroposed, in respect to real property, to change the succes-
sion tax into an annual tax. But if they did that they
must extend the same principle to personal property, and
when that was done they would have that property tax
which the right hon. gentleman opposite (Sir J. Faking-
ton), quoting Adam Smith, so much objected to. How
would this annual tax work? The range of inequality
under the tax would be from 1 to 20, irrespective of the
shortness of life. Did the hon. and learned gentleman
think that an annual tax so graduated would rest on a safe
basis ? (Hear.) Did the hon. gentleman consider whether
she person whose tax was measured by 20 or the person
whose tax was measured by 1 would be the greatest suf-
ferer ? The tax, if levied in the form proposed by the hon.
and learned gentleman, might afford some mitigation in
the case of the succession of the stranger, but it would

lead to a multiplication of the tax in the case of the
direct successor. (Hear, hear.) He did not know if this
was present to the mind of the hon. and learned gentle.
men when he made this proposal, but he would recom-
mend the hon. and learned gentleman to consider it in the
interest of the gentlemen by whom he was surrounded.
(Hear, hear.) Then how would the hon. and learned
gentleman deal with the mass of property engaged in trade
and commerce? Would he have an inquisition every year
into the amount of every man's capital? (Cheers.) That
was the proposition, and he (the Chancellor of the Exche-
quer) maintained that no inequality in the mere amount
of the tax would be half so grievous an oppression to the
trading and commercial classes as the inquisition proposed
by the hon. and learned gentleman, in order to ascertain
the amount of capital on which the commutation for the
tax was to be paid. (Hear, hear.) But he did not think
the house was prepared to agree to the principle of a pro-
perty at all. It was true that a succession tax was
analagous to a property tax ; but there was this difference
—that whereas a property tax was levied once a year, a
3nocession tax was levied only once in a generation. (Hear,
hear.) Without entering into details, his fundamental
Objection to the proposition of the learned gentleman was,
that it would establish a property tax necessitating from
year to year that inquisition which was felt to be so
grievous once in a generation, and attended with all the
dangers which every property tax necessarily involved.
He need not say, therefore, that he could not assent to the
proposal. (Hear.)
Sir F. KELLY said it was only because no one could
tell the precise number of years that any one would live,
that the right hon. gentleman was obliged to resort to
averages ; and he proposed his amendment as a substitute
for the system of averages, which, being unequal, must be
unjust. He would frame his amendment in a substantive
form with the view of submitting it for the consideration
of the committee.

Mr. W. WILLIAMS said the hon. and learned gentle-
man had admitted one very important priniple, namely,
that personal ought to be placed on the same footing as real
property. (Hear, hear.) He (Mr. Williams) decidedly
objected to the clause, though for a very different reason
from that of the hon. and learned gentleman. The right
hon, gentlemen had brought on himself this factious oppo-
sition to the proposed tax, by giving landowners a conces-
sion of rk per cent. Had he placed real property on pre-
cisely the same footing as personal, such opposition could
not have been offered. The amount of duty in the case of
the first degree of consanguinity was only one-half per cent.
and that would be the cause of nine-tenths of the real pro-
perty which would come under the operation of the act.
A distinction of half per cent. between the two kinds of
property appeared to him most unjust. He ought not,
perhaps, to make any complaint against the Chancellor of
the Exchequer; he knew the right hon. gentleman's diffi-
culties, and was sensible that ho had exhibited a degree of
courage to be found in few public men. (Hear, hear.)
Still he hoped he would reconsider the clause with a view
to amendment. It should be recollected that personal pro-
perty would pay probate duty, 3 per cent. for all property
under 30,0001., and 1k per cent. above 30,0001. That
description of property must pay the probate duty before
the owner could touch it ; and then it had to pay the
legacy duty within 21 days after possession ; while real
proporty was allowed four years and a half. He trusted
the right hon. gentleman would at all events fix the pay-
ment of the duty on real property at the end of twelve
months ; and if the landowners were dissatisfied with such
an arrangement, let him allow them 17i per cont.
After a few words from Mr. H. DRUMMOND,
Sir J. PAKINGTON complained of exaggeration on the
part of the Chancellor of the Exchequer in the comparison
which he had drawn between the payment on personalty
and on realty, putting the first at 1 per cent., the case be-
ing that of the first degree of consanguinity, and setting
against that the payment of 20 per cent. by a stranger.
The CHANCELLOR of the EXCHEQUER said in
every syllable that he had uttered he was strictly and
rigidly accurate. He had said that the payment by per-
sonalty, under the bill, as he computed it, would be double
the payment by realty. Ho then said that the extremes of
payment under the bill would be represented by 20 and
by 1, the 1 applying to the case of direct succession by
land, and the 20 to the succession of a stranger to per-
sonalty. Ho ought to have added that there was a charge
for probate duty, which would increase the inequality
above 20 to 1.

Mr. MALI NS hoped the hon. member for Lambeth
would be convinced that be at least was not "factious,"
when he heard him declare that ho was totally unable to
concur in the proposition of the hon. and learned member
for Suffolk (Sir F. Selly)—(hear, hear)—whose argument
had been fairly met by the Chancellor of the Exchequer.
There were many hon. gentlemen around him, who, he be-
lived, took the same view ; and he hoped his hon. and
learned friend would not press the matter to a division.
Mr. PHILLIPS thought the hon. member for Lambeth
—who, he believed, was a countryman of his—should have
borne in mind, that in Wales rents were generally six
months in arrear.

Mr. W. WILLIAMS said his were not.
After a few words from Mr. A. PELLATT,
Mr. AGLIONBY said he did not perceive any ground
for tho hon. member for Lambeth's answer of the Chan-
cellor of the Exchequer. The concessions appeared to him
to be all in favour of personalty. (Hear, hear.) Tho
measure ought to have been accompanied with one for
facilitating and cheapening the transfer of land. The Re-
gistration of Assurances Bill would certainly be no relief
to the landed interests. He confessed that he did not liko
the present bill, though like many others whose feelings
were similar, he had supported it. (Laughter.) The law-
yers would no doubt be benefited by it, but he was not
sure that it would benefit any other class.
After some further discussion on the same point, and
upon some other verbal and unimportant amendments, in
the course of these discussions Mr. W. WILLIAMS giving
notice that on the bringing up of the report he would move
an amendment, the object of which was to preclude the
adoption of the principle whereby the tax might be paid
upon certain properties by instalments, the clause was
agreed to.
Upon clause 21,
A discussion arose on a suggestion of Mr. DRUMMOND,
that the definition of "ornamental timber" of a mansion-
house in clause 20 was too vague.
Sir J. TROLLOPE said that unless some clearer defini-
tion was given he must move an amendment for that pur.

pose.
The CHANCELLOR of the EXCHEQUER said it was
be valued with the mansion to which it was attached ;and
proposed that the timber which should be excepted was to
he proposed to add to the clause the words " for the pur-
poses of this act."
Mr. HENLEY inquired what was the meaning of the
words " necessary outgoings ?" They were not very de-
finite.
The SOLICITOR-GENERAL.—These words were well
understood, and had a definite meaning in all courts of law
and equity. The timber to be excepted was that which
answered the description of ornamental timber, and was
connected with a mansion-house, was not severed in owner-
ship from the mansion-house, arid was not in the same suc-
cession ; the valuation only applied to such timber as the
tenant for
Nmnsaid
life might lawfullytht
a cut.
Sir J. uthey
were not to legislate in
a manner, and accept definitions that were only intelligible
to courts of law. The hon. and learned gentleman argued
as if land on which ornamental timber grew, and mansion-
houses were bequeathed separately, which was never the
case. He (Sir J. Hamner) did not know what was really
meant in the clause by ornamental timber, and whether it
was exempted from taxation or not. He wished clearly to
understand the bill, and to see that it was so framed as to
prevent future litigation. There ought to be an accurate
definition of what," ornamental timber" was. Again, he
wanted to know what the words " property yielding, or
capable of yielding, income" meant. Was it to be left to
tax-gatherers to decide what estates or parts of estates
were capable of yielding? He objected to any tax on tim-
ber at all ; they were taking off the duty on foreign tim-
ber, and why should home timber be taxed?
The CHANCELLOR of the EXCHEQUER deprecated
the mode of discussion which was goinz on, and the mix-
ing up of two or three clauses together. It was desirable
to dispose of the first moiety of the clause, which related
to the " necessary outgoings." Property not yielding pro-
fits would, of course, not be taxed. With regard to the
words " allowance for all necessary outgoings," Govern-
mentted three expressions for the purpose of pre-
venting ha had
litigation and alarm. They decided that the mat-
ter should remain, as far ar, possible, on the ground of
established usage and practice, and though that usage
might not be perectly certain and uniform in all cases and
in all parts of the country, it was, upan the whole, better
to trust to it than to attempt to frame definitions. It