TABLE 5.-Gross Inland Revenue and Cost of Services.

Excluding Transferred Taxes in Northern Ireland after 21st November, 1921.

DEATH DUTIES.

6. The Death Duties on the Statute Book are seven in number, of which three only are payable in connection with deaths occurring at the present time, namely, the Estate Duty, a duty payable with reference to the passing of property on death; and the Legacy Duty and the Succession Duty, each of which is a duty payable with reference to the acquisition of property by beneficiaries. The remaining four, namely, Probate Duty (in Scotland called Inventory Duty), Account Duty, Temporary Estate Duty and Settlement Estate Duty, are leviable in connection with deaths which have occurred during certain specified periods, the last of which expired on the 12th May, 1914, and are, therefore, now of very little importance.

7. The Net Receipt of the Death Duties in Great Britain in the year 1927-28 was £77,100,624, as compared with £67,431,791 in the previous year. The details for the two years, with the increases and decreases, are shown in the following table :

TABLE 7.-Budget Estimate, Exchequer Receipt, and
Net Receipt.

(Estate Duty, Settlement Estate Duty, Probate and Inventory Duty, Account Duty, Temporary Estate Duty, Legacy Duty, Succession Duty and Corporation Duty.)

7,526,358
6,919,910

1922-23 48,000,000 56,871,000 48,968,309
1923-24 52,000,000 57,800,000 50,636,917
1924-25 56,000,000 59,450,000 52,078,088 6,839,201
1925-26 66,500,000 61,200,000 53,889,701 7,440,699
1926-27 66,000,000 67,320,000 55,605,702 11,826,089
1927-28.. 67,800,000 77,310,000 68,993,707

8,106,917

* Excluding Northern Ireland after 21st November, 1921.

GREAT

BRITAIN.

56,494,667

57,556,827

58,917,289

61,330,400

67,431,791

77,100,624

8. Certain stocks and bonds, as prescribed by the Treasury in accordance with powers conferred by the Finance Acts of 1917 and 1918, are accepted, under certain conditions, in payment of any death duty. The total amounts of stock and bonds tendered in pursuance of these powers during the last six years are as follows:

9. The estimated value of articles of National, Scientific, Historical, or Artistic interest upon which Death Duties were exempted or remitted during the year 1927-28 is as follows :

(a) Articles bequeathed under the Finance Act, 1894, section 15 (2), to the value of £56,728 have been accepted by the British Museum, Victoria and Albert Museum, National Gallery, National Portrait Gallery, the Universities, and various museums and municipal institutions.

(b) Articles, exempted from Death Duties under the Finance Act, 1896, section 20, and the Finance (1909-10) Act, 1910, section 63, valued at £467,806 may be detailed as follows:

10. The Finance Act, 1927, enacted that the relief accorded to certain settled property under section 16 of the Finance Act, 1907 (whereby such property was not aggregated with other property but was treated as an estate by itself), should cease in the case of persons dying on or after the 29th July, 1927. It was, however, provided that where an interest in expectancy in any property has been bona fide sold or mortgaged prior to the 11th April, 1927, the purchaser or mortgagee shall not be liable, when the interest falls into possession, to pay a greater amount of duty than would have been payable under the law in force at the date of the sale or mortgage; and in the case of a mortgage any higher duty payable by the mortgagor shall rank as a charge on the property subsequent to that of the mortgagee.

11. The Act provided that where, under a settlement of which the forum of administration is in Northern Ireland, succession duty has been paid, or is payable, in Northern Ireland in respect of any settled personal property by reason of the death of a person dying on or after the 22nd November, 1921, a sum equal to the amount of that duty shall be allowed from the legacy or succession duties payable in Great Britain in respect of that property on the same death.

12. The following Judicial Decisions in respect of Estate, &c., Duties were given in the Courts during the year 1927–28 :—

In re Morris, Skinner v. Sanders.-In view of the provisions of section 16 (5) of the Law of Property Act, 1925, the Estate Duty in respect of a testator's English realty does not fall to be discharged out of his personal estate. (Chancery Division, 71 S.J. 472.)

Lord Advocate v. MacMillan's Trustees.-On the construction of a will containing a gift over in the event of the decease of residuary beneficiaries prior to the date of payment to them of their shares, it was held that a settled legacy (which fell into residue on the death of a life tenant) did not vest prior to the death of such life tenant and that, accordingly, no Estate Duty was payable on a share of such legacy in the estate of a residuary beneficiary who had pre-deceased the life tenant, the gift over taking effect. (Court of Session (Outer House). Not reported.)

In re Mellish.-On the death, since 1925, of the owner of an undivided share of English real estate, the Estate Duty which had been paid by his executor was held to remain a charge on the share. (Chancery Division. Not reported.)

In re Cassel, Public Trustee v. Mountbatten. On the death of a beneficiary entitled to the benefit of a continuing provision by a testator for the upkeep of certain premises, it was held that a claim for Estate Duty arose under section 1 of the Finance Act, 1894, and that the measure of value for assessment of the duty was the true value, under section 7 (5) of that Act, of the continuing right to enjoy the benefit conferred by the special clause. (Chancery Division, [1927] 2 Ch. 275.)

Attorney-General v. Belilios.-Where a testator, who had died domiciled in Hong Kong, had declared that his will should take effect according to the law of that colony, the fact that the residuary estate was vested in English trustees was held not of itself sufficient to support a contention that the forum for the administration of the estate was in this country. No claim for Succession Duty accordingly arose on the death of a life tenant in respect of the settled moveables, the claim for Estate Duty being limited to the property situate in Great Britain. (Court of Appeal, [1928] 1 K.B. 798.)

In re Thornley. In a case where, under the Articles of Association, certain special pre-emptive rights to purchase shares were conferred on shareholders, a sale thereunder by a father to son at less than the apparent full value of the shares within three years of the father's death was held not to have conferred any benefit on the son taxable to Estate Duty as a gift, the father having acted on a reasonable view of what, as a whole, was best for his estate. (King's Bench Division. Not reported.)