Sir, if I have established my premises | tory might be corrected by a certificate -namely, that in lieu of probate or ad- of the Commissioners of Inland Revenue ministration duty, one uniform charge upon their being satisfied that the error should be imposed upon the estate of arose from a mistake. I do not wish, every deceased person, and if the House Sir, that by my proposal the amount deagrees with me that the differential rived from the probate and legacy duties rates of duty upon benefits under wills should either be increased or diminished. or intestacies should be abolished, then My Resolution does not contemplate any I am brought to my third proposition- direct increase or remission of taxation; namely, that these duties should be but I am satisfied that there would be a amalgamated, and that there should be great individual gain by reducing the levied one duty only at one uniform rate cost necessarily incurred, not merely by upon the personal estate of every de- the taxpayer, but also by the Exchequer. ceased person. Proposing, as I do, to The cost of collecting the duty would be abolish all the existing probate, admi- very much diminished, and the official nistration, and legacy duties, it occurs staff at Somerset House reduced. It apto me that many modes of supplying pears, as I have already mentioned, that their place are practicable and simple. I there are nearly 150 officials, at a cost of will, however, sketch one, in order to from £40,000 to £50,000, employed in show how comparatively easy it is to the Legacy Duty Department at Somersupply the place of what I propose to set House. I have no accurate or preabolish. In Scotland and in Ireland an cise information as to the number of inventory is now recorded at the time of those who are engaged upon the old taking out probate or administration. I accounts, and in assessing and collecting would make such an inventory the basis the old duties; but I have reason to befor the new tax throughout the United lieve that at least three-fourths of the Kingdom. Let the inventory be first whole is to be attributed to the old actendered as an account, either at Somer- counts, the whole of which would in set House or to an officer appointed by time be got rid of. If the present systhe Commissioners of Inland Revenue at tem continues, the expense now being each district registry of the Court of incurred must be perpetually increasing; Probate, and let him examine it or com- but, on the other hand, if my system be pare it with the proper valuations of fur- adopted, the present staff would be reniture and other like effects, and with quired for a time to collect the old duties, the proper certificates of the value of and as the present officials retire upon shares, stocks, &c.; and having satisfied their pensions or superannuated allowhimself of the accuracy of the inventory, ances, it would be unnecessary to fill up let him then certify the amount of duty. their vacancies. In this way a considerSuch inventory should, in my opinion, able saving would eventually be effected. form an integral portion of the probate One objection has been alleged to my or letters of administration, and any proposal, and that is, that the change persons owing moneys to or holding might throw all the duty upon the resimoneys or effects of the deceased should duary legatee; but I contend this would only pay over or deliver the same upon not necessarily follow-the testator might ascertaining that it is included at its either give his own directions, as he now proper amount in the certified inventory. gives directions whether the legacy is to A precedent for this principle is to be be paid free from duty or not, or the law found in the 47th section of the 48th might itself enact that, as in cases of inGeo. III., and it would, in a slightly ex- testacy, there is a distribution of the intended form, apply to a case of this testate estate, so under wills each benekind. Then the situation of the pro- ficiary should bear an aliquot share of perty ought alone to regulate its lia- the original stamp duty. With regard bility to duty, and accordingly an estate to the mode of collection, my hon. Friend should not be taxed, as it often is now, the Member for Forfarshire suggested both in Australia, for instance, and in that the tax should be collected as the this country, upon the same item. In legacy duty now is, but that, I submit, the event of any item being omitted, an would only remove one of the present eik, or additional inventory, might be inconveniences, and would perpetuate recorded, and further stamp duty paid. delay in collection. Indeed, as regards A slight mistake in the original inven- the probate duty, it would in many cases Mr. Dodds cause that to be deferred which is now | fact, that the Chancellor of the Exchegenerally paid almost immediately after quer should realize as much under my the testator's death. The objects I have proposed system as he would do under in view are very plain and precise. In the existing system. Now, the probate the first place, I desire to simplify the and legacy duties, taking 1877-8 as a present complex system; secondly, to basis-for I have not been able to prohave one equal charge upon all personal cure precisely accurate returns for the property alike; thirdly, to make the last year-may, for 1878-9, be estipayment fixed and certain; and, fourthly, mated at £4,789,724. The capital to encourage the payment at an early upon which probate or administration date and in one sum by an equitable duty was paid in 1878-9 was, roundly, and liberal scale of discount or rebate. £138,000,000, and duty at 4 per Facilities might be given to executors cent upon this sum would produce and administrators, who frequently ex- £5,520,000, showing a surplus over the perience difficulty in obtaining the probate and legacy duties upon the last means for paying probate or adminis- year of £720,000. Under the existing tration duty. Indeed, it not unfre- system the legacy duty upon wills quently is necessary for the solicitor to proved during the current year may advance the amount himself for a time. become payable at any time over the Now, if the Legacy Duty Department next 50 or 60 years. Should my prowere empowered to issue, with a certifi- posed system be adopted, every tax cate of the amount of duty payable, an would be paid once for all; and hence authority for payment of it, either by there would be no doubt or suspense, as the Bank of England, where the de- there is at the present time. I have ceased was possessed of Government been unable to procure details of payStock or Funds, or by any bank holding ments of legacy duty during the last money belonging to deceased, or any two years, distinguishing the amounts insurance company, or to anyone in pos- paid under old and under recent wills, session of the personal estate of the de- owing to the cost and delay that would ceased, the payment would be very have been occasioned by making such a greatly facilitated, and an inconvenience Return. During the first collection of now very frequently experienced in the combined duty, large sums would practice would be entirely removed. still be coming in in respect of legacy My proposal involves no change of the duties under old wills, and at a low estilaw other than the repeal of the exist-mate, in the absence of precise data, ing probate and legacy duty rates ex- I estimate that that would realize cept one or two trifling ones. First, an at least half the annual sum paid alteration of the Succession Duty Act as during the preceding year- namely, regards leaseholds, which are now in an £1,500,000, and this would continue, anomalous position, being subject to although of a gradually diminishing probate duty in the first instance, and to amount, which would form no despisuccession duty afterwards. I think cable item in the Budget of Ways and these should be made either one or the Means for many years to come. other, and I would let them revert to Sir, a surplus of £750,000 from the the position in which they stood before proposed direct tax of 4 per cent, tothe Succession Duty Act of 1853, and gether with £1,500,000 for duties under treat them altogether as personalty and old wills, would make £2,250,000—a subject to my proposed combined duty. sum which, I venture to think, ought to In the next place, it would be necessary have some considerable attraction for to repeal so much of the Act 45 Geo. III. the right hon. Gentleman the Chancellor cap. 28, section 4, and thereupon real of the Exchequer, especially in these times. estate directed to be sold, and legacies There would be no actual addition to the charged upon real estate, would fall taxation upon the people, but merely a reunder the Succession Duty Acts. These arrangement of duties, and making imtwo changes would simplify the existing mediate instead of deferred payments, system, and I believe in no other way for which the taxpayer would have an would my Resolution affect the laws re-equivalent in an immense saving of cost lating to real estate. I do not, as I have already said, advance any plea for remission of taxation. I propose, in Now, and vexation and risk and loss. These 5,000 voluminous registers, of which we have heard as being at Somerset House, 4 would not be increased, as they necessarily would under the existing system; the staff, also, instead of increasing, would be gradually diminished, and great saving would be effected, economy of collection would be combined with an increased Revenue; and all this would be attended by a certainty of assessment and saving of great expense by the sweeping away of vexatious regulations. There would be no very great increase in the taxation of any class, and even the class paying 1 per cent would not find the amount payable by them very much increased. At present the probate duty varies from 1 to 3 per cent, and the average may be taken at 2 per cent. Administration duty varies from 2 to 4 per cent, and the average may be taken at about 3 per cent; so that even the most privileged class, who are now subject to legacy duty at 1 per cent only, pay, including probate duty, 3 per cent, and, including administration duty, about per cent. All other payers of higher rates, as a rule, would gain by what I suggest; and, generally speaking, I cannot doubt that the change would be of the greatest possible advantage alike to the taxpayer and the nation. Another advantage, and it is the only other one I shall venture to mention, is the elasticity of the system I propose, as compared with the existing system. Since 1815 the probate and legacy duties have practically been incapable of expansion or contraction. Under my system they would be capable of increase to meet the exigencies of the State, and I can conceive no reason why, whilst the Income Tax is being increased, some increase should not be made upon the probate and legacy duties. On the other hand, should the good time coming ever arrive when we shall again witness a remission of taxation, then the probate and legacy duties could be diminished in their due proportion. On every ground, I feel that I may safely urge the adoption of my Resolution upon the House, satisfied as I am that it will be to the benefit of all parties. Before I sit down, Sir, I must refer to the Amendments that have been placed upon the Paper. The first is that of my hon. Friend the Member for East Sussex (Mr. Gregory), who proposes to re-consider and revise the progressive rates of probate and administration duty, and to give greater facilities for assessment and Mr. Dodds settlement of legacy and succession duties upon future or contingent events, and for the relief of executors, administrators, and trustees, in respect of the same. Now, Sir, I venture to think that my hon. Friend will find it impossible so to deal with future or contingent events; and if he goes into the matter fully, I believe he will arrive at the same conclusion that I have, and will find that his object cannot be better effected than by the adoption of the system suggested in my Resolution. Under these circumstances, I confidently hope that I may rely upon having my hon. Friend's support. There only remains the Amendment of my right hon. Friend the Member for Montrose (Mr. Baxter), which he proposes to make to my Resolution. This proposition involves a new principle, upon which, as I have already said, there would be a great diversity of opinion on both sides of the House. My proposition involves no new principle, and, therefore, I am reluctantly compelled to ask my right hon. Friend not to press the addition of which he has given Notice. I merely propose to combine certain existing duties, and I do not think this at all warrants the introduction of the larger question as to the taxation to be imposed upon real estate. I now beg to move, Sir, the Resolution of which I have given Notice. Motion made, and Question proposed, "That, in the opinion of this House, it is expedient that in lieu of Probate and Administration Duty, which is now payable according to unequal rates, upon the personal estate of deceased persons, and in lieu of Legacy Duty, which is now payable at various rates andvarious times in respect of each separate gift by will, and each separate share of an intestate's estate, one Duty only should be levied, at a uniform rate, upon the value of the personal estate of every deceased person."-(Mr. Dodds.) MR. J. W. BARCLAY: Sir, my hon. Friend has dealt so exhaustively and so ably with the matter before the House in the speech which he has just delivered, that I shall not detain the House but for a few minutes in supporting the Resolution. I wish especially to call the attention of the right hon. Gentleman the Chancellor of the Exchequer to how hardly these probate duties fall upon small estates, not only in respect of the large amount of duty charged on these estates, but in the form of legal expenses caused by this duty. A Return MR. GREGORY, in rising to move, as an Amendment, to leave out from the word "expedient" to the end of the Motion, in order to insert the words rates of Probate and Administration Duty, and to afford greater facilities for the assessment and placed before this House at the begin- | of the Chancellor of the Exchequer in ning of last Session showed that the dealing with this subject in his next total number of estates dealt with during year's Budget. the year 1877-8 was 40,906. Of that number 13,749, or one-third, were estates under £300 each, and the total amount of duty levied on them was £48,831. Now, the average amount of duty paid by these small estates, I find, was almost 2 per cent on the whole. The same Return shows that estates of £30,000 each and upwards paid only something less than 1 per cent. But to these per centages must be added the charge on the estates caused by the duty. I find that the average sum paid by the estates under £300 was no more than £3 10s. each; but anyone who has any experience of the expenses in such matters, will be of opinion that the legal expenses involved by the payment of this £3 108. were very likely nearly twice that amount. Therefore, it will be seen that these small estates had to pay 2 per cent probate duty, and further legal expenses of between 2 and 4 per cent in making up the statements required with the payment of the duty. The hon. Member who has just addressed the House has referred to the large expenditure which might be saved at Somerset House if these duties were simplified. I venture to suggest to the Chancellor of the Exchequer, in dealing with this subject, that estates under £300 might be altogether exempted from duty. I venture to think that in so doing the Revenue would suffer very little loss, because, as I have already mentioned, one-third of the whole of the estates consists of the smaller estates under £300, and these must necessarily involve a very large proportion of the work at Somerset House. I think that estates of deceased persons of less than £300 per annum might fairly be considered to correspond with an income of £150 a-year, and ought to be exempted from probate duty, as the small incomes are exempted from Income Tax. For reasons of economy as well as of equality, I hope that the right hon. Gentleman will consider the propriety of exempting estates under £300. I hope that the very able and lucid speech which my hon. Friend has addressed to the House will be productive of a very satisfactory division, should one be necessary, and that the House will, by a large majority, strengthen the hands said, he concurred with the hon. Mem- instance, but he believed that this would | large a duty were imposed on children, be so small in effect as to be inappre- who were the immediate objects of the ciable. Again, he thought, executors or testator's bounty and care, parents would trustees should have the power of giving be induced to make provision for them benotice to the Inland Revenue Office that fore death, and would thereby evade paythey were about to distribute the funds ment of the percentage to the State. As a in their hands, and require the Office if matter of fact, that happened rather frethey had any claim upon such funds, quently, even with the existing low duties. to make it within a limited time, and if He believed that the legacy duty could the Office did not make such claim, that the not be increased without detriment to trustees or executors should be discharged. the State, and that, as it stood, it was Again, with regard to succession duties, based on fair principles, of which the a case had occurred in which the advantages outweighed those of the trustees had elected to pay the succes- fixed duty which had been suggested. sion duties by instalments, but, unfor- No doubt, the present system caused tunately, one of them forgot to pay the considerable expense; but he had never last instalment. The thing was undis- heard of any injustice done in the whole covered for years; but when the owner great establishment of Somerset House. came into succession, he was called upon He believed the differential duty was to pay all the instalments with interest better for the public than a fixed duty at 4 per cent for 14 years. In a case of would be, inasmuch as it did not offer that kind, he thought that the principal any temptations to the Chancellor of the alone ought to be recoverable. If the Exchequer to levy those increases which changes he had suggested were made, he the hon. Member seemed to think dedid not think any more was required. sirable. The total value of personal He begged to move the Amendment of property had largely increased of late which he had given Notice. years, till it now amounted to 80 per cent of the whole. That was a circumstance which seemed to have escaped the attention of the hon. Member for Stockton (Mr. Dodds). It was surprising that only the remaining 20 per cent was liable to contribute to local taxation. That fact was an answer to many of the arguments they had heard; and, taking it together with other facts, he had no difficulty in giving his vote against the Resolution. Amendment proposed, MR. GOLDNEY, in seconding the Amendment, said, he agreed with his hon. Friend that, on the whole, the present law worked very well, and was a just law. It was a law which prevailed in all civilized States, and was first adopted in this country under William III., when it was brought from Holland. In 1780, the tax was simply 1 per cent upon legacies above £100; in 1783, it was increased to 2 per cent; and in 1789, to 3 per cent. In 1796, a proposition was brought before the House to increase the duties; and a very long debate followed. On a division, as to whether real estate should be brought under the same rule as personal estate, the numbers were equal, and the Speaker gave his casting-vote against the proposition, so that there might be further time for consideration, and the subject dropped. In 1805, differential duties were introduced; and in 1815, it was established that children who had a natural claim should pay a smaller amount than those who had not the same natural claim. It was manifestly unjust, that those who had a natural right to be maintained should pay the same duty as those who had no such right. The argument in the case of the pro-and that with respect to the Probate, Legacy "To move to add to Mr. Dodd's Motionbate and succession duties were similar. and Succession Duties real estate should be Again, it might be argued, that if too placed on the same footing as personal estate.'' Mr. Gregory To leave out from the word "expedient" to the end of the Question, in order to add the words "to reconsider and revise the progressive rates of Probate and Administration Duty, and to afford greater facilities for the assessment and settlement of Legacy and Succession Duties upon future or contingent events, and for the relief of executors, administrators, and trustees in respect of the same."—(Mr. Gregory.) Question proposed, "That the words proposed to be left out stand part of the Question." MR. BAXTER said, he wished to say a very few words with regard to the Notice which he had placed on the Paper, and which was as follows: |