26
FROM
BURCHELLS,
LETTER TO The Controller, Estate
Duty Office.
SHEET NO.
DATE
10.7.36.
became due.
The widow died on the 11th March 1935 and the
Trustees were assessed to and paid Estate Duty on the cesser
of the said annuity on an agreed figure of £125,000.
The Trustees appealed against the decision of the
Estate Duty Commissioner that the duty was payable, on the
ground that the dispositions of the Testator's Will by which
the annuity was given to his wife for life, ceasing on her
death, gave the wife an interest in the residuary estate which
on her death did not disappear but was transferred by law to
the ultimate beneficiaries and that such disposition amounted
to a settlement within the terms of s.25 (see below) of the
Estate Duty Ordinance of the Colony and that, therefore, under
the terms of Section 25 (1) no estate duty would be payable on
the death of the wife in respect of that part of the residuary
estate which represents the notional fund which would have
sufficed to meet the annuity.
They did not suggest that the
whole of the residuary estate was settled, but they contended
that there was a settlement of a "slice" of the residue, the
"notional fund" which would have sufficed to meet the annuity.
The discretionary power to set apart and appropriate was not
actually exercised.
Section 25 of the Estate Duty Ordinance reads as
follows and, in fact, states the English law on the subject