CO129-557-12 Armstrong and Turner v. Estate Duty Commissioner- appeal to Privy Council 18-5-1936 - 2-10-1936 — Page 27

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