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Death Duties on Large Estates
The present rates of estate duty applicable to
estates exceeding £ioo,oooinvalueranging from 41 %
to 53% will be lowered to 40% which will hence
forward be the maximum rate of duty.
Gifts to the State
A section will be included in the Finance Bill
exempting such gifts from estate duty.
Gifts with Reservation
Where the donor retains an interest in the property
the entire property becomes liable to estate duty
even although the donor's death takes place many
years after the transfer. The Minister will introduce
a provision under which if the donor dies more
than three years after making the gift the charge
to duty will be confined to the value of the benefit
accruing to the recipient on the donor's death,
e.g., allowance will be made for the reduction in
the benefit due to a right of residence or maintenance.
This principle will also be applied in relation to
trusts ended more than three years before the life
tenant's death where some benefit was reserved to
the life tenant.
Tax Avoidance—Gifts
The Finance Bill will make provision to prevent
tax avoidance by means of what is known as the
"disappearing trick", e.g., where short dated
securities such as Exchequer Bills are given as a gift
and redeemed before the death of the donor which
occurs within three years from the date of the gift.
Under the law existing down to the date of the
budget resolution such gifts were exempt from duty
as the property on which estate duty would otherwise
be charged ceased to exist before date of death.
Payment by Trustees
Section 30 of the Finance Act, 1941, was enacted
to prevent tax avoidance by the termination of
trusts prior to the death on which they would
normally have ceased. The section provides that,
where the life tenant of settled property disposes of
his interest three years or less before his death, the
property remains liable to estate duty. The trustees
of settled property are responsible for the payment
of estate duty but in the case of settlements termin
ated in circumstances giving rise to a claim under
section 30 of the Finance Act, 1941, some doubt
exists as to whether the last trustees are responsible
for payment of duty on foot of such a claim. The
law is being changed to remove this doubt.
that a legacy fails if the legatee predeceases the
testator. An exception is made in the case of a
legacy to a child of the testator who predeceases the
testator but who leaves issue living at the testator's
death. It has been held that such a legacy is, to take
the simplest example, liable to estate duty as part of
the estate of the testator and also as part of the estate
of the child who predeceased him. The law is being
changed to provide that duty will be levied only on
the testator's death as if the property were given
directly to the living beneficiary.
Aggregation Provisions
Because of the increase in the exemption limit for
estate duty from £2,000
to £5,000 under the
Finance Act, 1960, exemption may apply in certain
cases to property totalling as much as £15,000 in
value.
This situation arises because certain sub
divisions of property, based on the distinction
between settled and unsettled property, may under
existing law constitute separate estates, each of
which would be entitled to exemption if it did not
exceed £5,000 in value. The law is being changed
to provide that the deceased's unsettled property
whatever its value will be aggregated with any
property settled by him.
Stamp Duty on Purchases of Land
The Government have decided to include pro
visions in the Finance Bill to" strengthen the existing
25% stamp duty legislation so as to bring within
its scope certain procedures which at present enable
or may enable non-nationals to acquire land without
incurring liability to the duty. The Minister has in
mind particularly purchases of land by pre-1947
companies with non-national shareholders.
It is
proposed that the higher rate of duty will not apply
henceforward except where it is necessary for social
purposes and it will not apply at all in urban areas
or to land which is to be used for industrial purposes,
and, where it does apply, the Minister for Lands
will have power in suitable cases to authorise the
granting of exemption. The amendment of the law
which will be incorporated in the Finance Bill in
respect of pre-i94y companies will apply retro
actively from the date of the Budget Statement,
April 19th. Provision will be made for the furnishing
of declarations or statements
to
the Revenue
Commissioners and there will be stringent penalties
for failure to disclose information.
THE REGISTRY
Register A.
W/'ll At
a
T?
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SOLICITOR with large practice in southern town owing to
Wilts sict,
1037—
K.eliej
^
advancing years would like to communicate in confidence with
The general rule under the Wills Act, 1837, is
a Solicitor interested in a purchase. He should have a sound
•;. 1-03