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the settlor of settled property is enlarged by the death of any person entitled in remainder, or where settled property reverts on the death of a tenant for life to the original settlor, the property is not deemed to pass on such death so as to be liable to estate duty (r).

(9) Where estate duty has already been paid in respect of

settled property since the date of the settlement, estate duty is not payable in respect of it until the death of a person who was competent to dispose of the property (s) and who, if subsequent limitations continue to subsist on his death, was also sui juris (t).

(10) Where, in the case of settled property, the interest of any person under the settlement fails before it becomes an interest in possession, and subsequent limitations continue to subsist, the property is not deemed to pass on his death (u).

(11) Where the deceased has purchased an annuity for the life of himself and of some other person, and the survivor of them, or to arise on his own death in favour of some other person, and such annuity does not exceed 257., estate duty is not payable in respect of that annuity, or if there is more than one such annuity, in respect of the first annuity granted (x).

Settlement estate duty is imposed where property in respect of which estate duty is leviable is settled by the will of a deceased, or having been settled by some other disposition, passes on the death of the deceased to some person not competent to dispose of the property (y).

The following are the principal cases of exemption from settlement estate duty:

(1) Where the only life interest in the property after the

(r) Finance Act, 1896 (59 & 60 Vict. c. 28), ss. 14, 15.

(8) 57 & 58 Vict. c. 30, s. 5 (2); as to meaning of competent to dispose, see Ibid. 8. 22 (2) (a), p. 90.

(t) Finance Act, 1898 (61 & 62

Vict. c. 10), s. 13.

(u) 57 & 58 Vict. c. 30, s. 5 (3). (x) Ibid. s. 15 (1).

(y) Ibid. s. 5 (1); as to meaning of competent to dispose, see Ibid s. 22 (2) (a), p. 90.

death of the deceased is that of a wife or husband of the deceased (y).

(2) Where it had already been paid once during the con

tinuance of the settlement (z).

(3) Where the net value of the property does not exceed 1,0007., and estate duty has been paid (a).

(4) In respect of property settled by a disposition which has taken effect before the 2nd August, 1894 (b). (5) As settlement estate duty is only payable in respect of property upon which estate duty is leviable, the cases of exemption from estate duty are also cases of exemption from settlement estate duty (c).

A rateable part of the estate duty on an estate in proportion to the value of any property which, prior to the Land Transfer Act, 1897 (d), did not pass to the executor as such, is made a first charge on the property in respect of which duty is leviable (e). There is, however, no provision in the Act charging with the payment of estate duty any property which, prior to the Land Transfer Act, 1897 (d), passed to the executor as such, and consequently the estate duty and settlement estate duty on all such property are payable out of the residuary estate (f). In cases, therefore, where leasehold estates have been specifically bequeathed, there is no necessity for a purchaser to make inquiries as to the payment of these duties.

Settlement estate duty leviable in respect of personal property settled by the will of a person dying on or after the 1st July, 1896, is payable out of the settled legacy or property in respect of which the settlement estate duty is leviable (g); but it is conceived that this provision does not cast any obligation upon the purchaser to see that settlement estate duty has been paid.

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The twelve years' limit applies to estate duty as well as to succession duty, and bonâ fide purchasers for value without notice are protected (1⁄2).

In cases where, in consequence of the merger of a life interest in the reversion expectant thereon, no property actu¬

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ally passes on the death of the owner of the life interest,

estate duty is not payable. And where a tenant for life
appointed to her son subject to her life interest, and subse-ma
quently surrendered her life interest to him, it was held that,
upon the death of the tenant for life, estate duty was not
payable in respect of the property appointed to the son (i).
The payment of estate duty is proved by the receipt of the In-
land Revenue Office or by the certificate of the Commissioners().

(iii) Legacy Duty.

It is important, in dealing with a reversionary interest under a will, to ascertain whether legacy duty has been paid. Where personal property is given in succession to persons who are chargeable with duty at one and the same rate, legacy duty is at once payable out of the corpus so given; but where the beneficiaries do not pay the same rate of duty, legacy duty is not immediately charged on the corpus, but is charged upon the beneficial interest of each legatee when his interest falls into possession, and the persons entitled to a temporary interest pay the legacy duty by four equal annual instalments().

The payment of legacy duty is proved by a copy of the entry in the books of the Commissioners of the payment of the duty (m), by production of the Commissioners' receipt (n), by a production of a receipt for the legacy, or, in the case of an annuity, a receipt for the first four annual payments stamped with the amount of duty payable (0).

(h) 57 & 58 Vict. c. 30, s. 8 (2), 18. Att.-Gen. v. Beech, (1898) 2 Q. B. 147; 67 L. J. Q. B. 585; 78 L. T. 584; 46 W. R. 435.

(*) 57 & 58 Vict. c. 30, s. 11 (1).

(1) The Legacy Duty Act, 1896;
36 Geo. 3, c. 52, s. 12.
(m) 36 Geo. 3, c. 52, s. 12.
(n) Ibid. s. 35.

(0) Ibid. s. 27.

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(iv) Probate and Account Duties.

These duties, in the case of deaths prior to the 2nd August, 1894, have been superseded by estate duty. The payment of probate (or, in the case of intestacy, administration) duty took place at the time of the proof of the will or the grant of letters of administration. As probate and letters of administration are not granted until the duty has been paid (p), a purchaser may assume that where a will has been proved or letters of administration have been granted, this duty has been paid. The account duty formerly chargeable under the Customs and Inland Revenue Act, 1881 (2), was not made a charge upon the property in respect of which it was paid. No inquiry into the payment of this duty need, therefore, be made by a purchaser.

In the foregoing sketch the writers have only endeavoured to draw attention to some of those points in relation to death duties which are most likely to arise in the perusal of abstracts, and which it would be the duty of the solicitor to a purchaser or mortgagee to inquire into. To attempt any further account of this difficult subject would merely enlarge the size of this work without making any corresponding addition to its utility.

Requisitions.

1. The receipts for the succession duties payable on the deaths of Miss A. and Mrs. B. must be produced.

2. The additional duty payable on the increased value of the property on the determination of the ninety-nine years' lease must be borne by the vendor. This duty must be commuted or otherwise provided for (r).

3. The succession duty which will become payable on the death of the annuitant must be commuted or otherwise provided for.

4. The death of Mrs. C. must be proved, and the receipts for the succession duty payable on her death and on the deaths

(p) Customs and Inland Revenue Act, 1881 (44 & 45 Vict. c. 12), s. 30.

(2) Ibid. s. 38.

(r) Re Kidd and Gibbons' Contract, (1893) 1 Ch. 695; 62 L. J. Ch. 436; 68 L. T. 647; 41 W. R. 507; 3 R.

268.

of the several other annuitants who died after the Succession Duty Act came into force (s), must be produced.

5. A. B. appears to have died within a year of the date of the voluntary conveyance to his wife. Estate duty therefore became payable on his death. The receipt for this duty must be produced.

6. Have the duties which became payable under the Finance Act, 1894, on the death of X. Y. been paid? A certificate of discharge of the Commissioners, or the receipts of the Inland Revenue office must be produced.

DEBENTURES.

Debentures may be taken to include almost any instruments (other than mortgages in usual form, and acceptances) providing for the payment by a company of money at a future date. They usually, but not necessarily, have conditions indorsed subject to which they are issued, and which frequently effect a charge on the property of the company, either directly or by reference to a trust deed.

Debentures are sometimes issued as fixed charges, and sometimes as a floating security, and sometimes as a fixed charge on realty, and as a floating security as to other assets. A floating security is an equitable charge on the assets for the time being of the company as a going concern attaching to the subject charged in the varying condition in which it happens to be from time to time; until the debenture holders intervene, or a receiver is appointed, or a winding-up order is made, or resolution for winding-up passed, the company can deal with the property charged by such a security in any of the ways necessary for carrying on its business in the ordinary course (t).

If there is no agreement to suspend the right of the persons

(8) 19th May, 1853.

(t) Wheatley v. Silkstone and Haigh Moor Coal Co., 29 Ch. D. 715; 54

J.

L. J. Ch. 778; 52 L. T. 798; 33
W. R. 797.

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