Composition for duty. Interest on arrears. What dispositions of property confer successions. Title by survivorship confers a succession. Power of appointment. under sect. 20 of 36 Geo. 3, c. 52, although the owner may be domiciled abroad (u). The Commissioners of Inland Revenue are empowered to accept composition for legacy duty (x). Arrears of legacy and succession duty bear interest at 4 per cent. (y). Succession Duty. The following is an abstract of the principal provisions of the Succession Duty Act, 1853 (≈), as modified and altered by the Customs and Inland Revenue Act, 1888 (a). Every disposition of property by reason whereof any person becomes beneficially entitled to any property or the income. thereof, upon death, either immediately or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation, and every devolution upon death of any beneficial interest in property or the income thereof to any person in possession or expectancy, confers on the person so entitled by reason of any such disposition or devolution a "succession," and the term "successor" denotes the person so entitled, and the term " predecessor" denotes the settlor, disponer, testator, obligor, ancestor, or other person from whom the interest of the successor is derived (b). When persons have any property vested in them jointly by a title not conferring on them a succession, a beneficial interest in such property accruing to any of them by survivorship is to be deemed a succession (c). If the donee of a general power of appointment taking effect on a death exercise it, he will for the purpose of duty be deemed to be entitled at the time of exercising the power to the interest appointed as a succession derived from the donor of the power; and if the donee of a limited power of appointment taking effect on a death exercise it, the person taking the appointed property will be deemed to take the same as a succession derived from the donor of the power as predecessor (d). (u) Chatfield v. Berchtoldt, L. R. 7 C. A. 192. (x) 44 Vict. c. 12, s. 43. (y) 31 & 32 Vict. c. 142, s. 9. (a) 51 Vict. c. 8. 16 & 17 Vict. c. 51, s. 2. Sect. 3. (d) Sect. 4. of determin succession. Where property is subject to a charge, estate, or interest de- Extinction terminable by the death of any person, or at any period ascer- able interests tainable only by reference to death, the increase of benefit confers a accruing to any person on the extinction or determination of the charge, &c., is to be deemed a succession accruing to the person then entitled beneficially to the property or the income thereof (e). accompanied grantor, &c. confers a suc cession. Where any disposition of property not being a sale, and not Disposition conferring an interest expectant on death on the person in by reservation whose favour the same is made, is accompanied by a reservation of benefit to or assurance of, or contract for any benefit to the grantor or any other person for life, or for any period ascertainable only by reference to death, such disposition confers, at the time appointed for the determination of such benefit, an increase of beneficial interest in the property as a succession equal in annual value to the yearly value of the benefit so reserved, &c. (ƒ). Under the Act of 1853 (g), the rate of duty is as follows: Where the successor is the lineal issue or lineal ancestor of the predecessor, one pound per centum upon the value of the succession, but this is not payable on any property which has paid probate or administration duty under the Customs and Inland Revenue Act, 1881 (h): Where the successor is a brother or sister, or a descendant of a brother or sister of the predecessor, three pounds per centum upon such value: Where the successor is a brother or sister of the father or mother, or a descendant of a brother or sister of the father or mother of the predecessor, five pounds per centum upon such value: Where the successor is a brother or sister of the grandfather or grandmother, or a descendant of the brother or sister of the grandfather or grandmother of the predecessor, six pounds per centum upon such value: Where the successor is in any other degree of collateral consanguinity to the predecessor than is herein before described, or is a stranger in blood to him, ten pounds per centum upon such value. (e) Sects. 5, 6. (f) Sect. 7. (g) Sect. 10. (h) Act of 1881, s. 41; In re Haygarth's Trusts, 22 C. D. 545. Rate of duty under Act of 1853. Additional duty under Act of 1888. Provisions as to married persons. What duties payable when successor is also predecessor. Provision as to joint predecessors. Where there The Customs and Inland Revenue Act, 1888 (4), imposes an additional duty in respect of every succession on the death of a person dying on or after the 1st July, 1888, at the following rate, viz., where the successor is the lineal issue or lineal ancestor of the predecessor, at the rate of ten shillings per centum, and in other cases at the rate of thirty shillings per centum. But the additional duty is not payable upon the interest of a successor in leaseholds passing to him by will or devolution by law, or in property liable to probate or administration duty under the Customs and Inland Revenue Act, 1881. Where any person chargeable with succession duty, or with legacy duty, is married to a wife or husband of nearer consanguinity to the predecessor, the duty is payable as if the wife or husband were the successor (i). Where a person takes a succession under a disposition made by himself, then, if at the date of such disposition he shall have been entitled to the property expectantly on the death of any person dying after the 19th May, 1853, and such person shall have died during the continuance of such disposition, he shall be chargeable with duty on his succession at the same rate as he would have been chargeable if no such disposition had been made; but a successor is not liable to duty in any other case under a disposition made by himself, and no person is chargeable with duty upon the extinction or determination of a charge or interest created by himself, unless at the date of the creation thereof he shall have been entitled to the property subjected thereto on the death of some person dying after the 19th May, 1853 (k). Where the successor derives his succession from more predecessors than one, and the proportional interest derived from each of them is not distinguishable, the commissioners may agree with the successor as to the duty payable; but if no such agreement is made, the successor will be deemed to have derived his succession in equal proportions from each predecessor, and will be chargeable with duty accordingly (1). Where the interest of any successor in personal property shall, devolution by before he shall have become entitled thereto in possession, have has been a paid at the higher rate. passed by reason of death to any other successor, then one duty death of a successor, only only is payable in respect of such interest, and is due from the one duty to be successor who first becomes entitled thereto in possession, but such duty will be at the highest rate, which, if every such successor had been subject to duty, would have been payable by any of them (m). of succession. Where, on the 19th May, 1853, any reversionary property expectant on death was vested by alienation or other derivative title in any person, such person will be charged with duty at the same time and rate as the original successor would have been chargeable if there had been no alienation, &c., and where, after Duty to be paid by alience the 19th May, 1853, any succession, before falling into possession, has become vested by alienation or any title not conferring a new succession in any other person, the duty is payable at the same rate and time as if there had been no such alienation, &c., and where the title to any succession is accelerated by the sur- Acceleration. render or extinction of any prior interest, the duty is payable as if there had been no such acceleration (n). Property given to any charitable or public purpose is liable to Gifts to duty at 10 per cent. (o). No policy of assurance on life creates the relation of predecessor and successor between the insurers and the assured, and no bond or contract made by any person bonâ fide for valuable consideration in money or money's worth for the payment of money or money's worth after the death of any other person, creates the relation of predecessor and successor between the parties, but a disposition or devolution of the moneys payable under such policy, bond, or contract, may create a succession (p). charities, &c. Provision for and contracts policies on life for valuable consideration. Where the whole succession or successions derived from the Exemptions. same predecessor, and passing upon any death to any person or persons, does not amount in money or principal value to £100, no duty is payable, and no duty is payable upon any succession of less value than £20 in the whole, or upon any moneys applied to the payment of the duty on any succession according to any trust for that purpose, or by any person in respect of a succession, who, if the same were a legacy bequeathed to him by the predecessor, would be exempted from the payment of duty Leaseholds to be charged with succession duty instead of legacy duty. Duties to be paid on successor becoming entitled in possession. Interest of successor in real property sidered as an annuity. to be con Option given in respect thereof under the Legacy Duty Acts (g). And no person charged with the duties on legacies and shares of personal estate under the Legacy Duty Acts, in respect of any property subject to such duties, will be charged also with succession duty in respect of the same acquisition of the same property (r). Leasehold hereditaments and legacies payable out of real estate are no longer chargeable under the Legacy Duty Acts as belonging to the personal estate of the testator or deceased (s). The duty must be paid at the time when the successor becomes entitled in possession to his succession, except that if there is a prior charge or interest not created by the successor, the duty in respect of the increased value accruing on the determination of the charge or interest is payable at the time of such determination, and except that in the case of an annuity or property chargeable as such the duties are payable by instalments, and no duty is payable on the determination of a lease at rack rent in respect of the increase accruing to the successor on such determination (t). The interest of a successor in real property will be taken to be of the value of an annuity equal to the annual value of the property according to the tables in the schedule annexed to the Act of 1853, and the duty chargeable thereon is payable (subject to the option hereinafter mentioned) by eight equal instalments, the first instalment to be paid at the expiration of twelve calendar months after the succession falls into possession, and the remaining seven instalments to be paid half-yearly; provided that if the successor die before all the instalments have become due, those that are not due at his decease will cease to be payable except in the case of a successor who shall have been competent to dispose by will of a continuing interest in such property, in which case the instalments unpaid at his death are a continuing charge on such interest in exoneration of his other property, and are payable by the owner for the time being of such interest (u). In the case of a successor who becomes entitled to his succesas to payment sion upon the death of a person dying on or after the 1st July, by Act of 1888 of instalments. (9) This exemption applies only to express exemptions in the Legacy Duty Acts, i.e., gift to husband and wife, to the royal family, and to certain charities. Attorney-General v. Fitzjohn, 2 H. & N. 465. 16 & 17 Vict. c. 51, s. 18. Sect. 19; Act of 1888, s. 21. (t) Act of 1853, s. 20. (u) Sect. 21. |