182168-1931-Supplementary-Draft-Bill--Estate-Duty-Amendment — Page 16

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36. The new section 25 provides that if estate duty bas already been paid in respect of any settled property since the date of the settlement, upon the death of one of the parties to a marriage, no estate duty shall be payable on the death of the other party to the marriage unless such person was at the time of his or her death, or had been at any time during the continuance of the settlement, com- petent to dispose of such property. This provision is adapted from section 5 (2) of the Finance Act, 1894, as amended by section 14 of the Finance Act, 1914. The special definition in sub-section (2) of the term settlement is inserted because in the principal Ordinance generally that term excludes testamentary dispositions.

37. The new section 26 gives relief in certain cases of quick succession, the duty on the second death being reduced in accordance with a scale which varies according to the period elapsing between the two deaths.

This pro- vision is taken from section 15 of the Finance Act, 1914.

38. The new section 27 gives relief in the case of estates which just pass over one of the steps in the scale of estate duties. The effect of the section can best be seen from examples. For example, an estate is valued at $10,500. At the new rate of 3% (the old rate is the same) the estate duty would be $315. Under this section, however, duty can be paid at 2% on $10,000, i.e., $200, with an addition of $50, ie., $250 in all instead of $315. Again, au estate is assessed in $100,500. At the new rate of 6% the estate duty would be $6,030. Under this section duty can be paid at 5% on $100,000, .e., $5,000, with an addition of $500, i.e., $5,500 in all instead of $6,030. Of course if an estate passes over the step in the scale by more than a small amount it would not pay the estate to claim the relief. This provision is taken from section 13 (1) of the Finance Act, 1914.

39. The new section 23 gives relief in the case of certain interests which do not fall into possession. It provides that in the case of settled property, where the interest of any person fails by reason of his death to become an interest in possession, and subsequent limita- tions continue to subsist, the property shall not be deemed to pass on his death. This provision is taken from section 5 (8) of the Finance Act, 1894. As in the case of the new section 25, the terms settlement and settled property are specially defined for the purpose of this section. The reason is the same as that given in paragraph 35 above.

The

40. Section 16 of this Ordinance repeals the Sehe·lules to the principal Ordinance. The First Schedule was repealed by the Law Bevision Ordinance, 1924. Second Schedule is replaced by a new Schedule in which the scale of graduated rates is revised and increased. The repeal of the Second Schedule and the substitution of the new Schedule is made subject to a proviso derived from section 29 of the Finance Act, 1919, relating to the sale or mortgage of interests in expectancy before the com- mencement of this amending Ordinance. The Third Schedule disappears with the omission of the present section 13 (5) and the alteration of the present section 13 (4). This matter is referred to in paragraphs 8, 9 and 29 above.

January, 1931.

C. G. ALABASTER,

Attorney General,