Finance Act 1947

PART VDeath Duties.

49Charge of additional duty.

(1)On every legacy subject to legacy duty under the existing law, and on every succession subject to succession duty under the existing law, there shall be charged a further legacy or succession duty (as the case may be) at a rate equal to that of the duty to which it is subject under the existing law (or in the case of a succession subject to the additional duty under section twenty-one of the [51 & 52 Vict. c. 8.] Customs and Inland Revenue Act, 1888, the aggregate rate of the duty to which it is subject under the existing law) :

Provided that the further duty shall not be charged—

(a)on any legacy or succession given or created for public or charitable purposes ; or

(b)except in the cases and to the extent mentioned in the next following subsection, on any legacy derived from a testator or intestate dying before the sixteenth day of April, nineteen hundred and forty-seven, or any succession arising before that day.

(2)The further duty shall be charged on any such legacy or succession as is mentioned in proviso (b) to the foregoing subsection, if and to the extent to which duty under the existing law—

(a)is payable thereon in connection with any such event as is mentioned in the next following subsection ; or

(b)would be payable as aforesaid if the provisions applicable in cases where all persons having successive interests are chargeable with the same rate of duty were the same as those applicable where they are chargeable with different rates of duty ; or

(c)would be payable as aforesaid but for any payment made in advance and not made under the enactments relating to commutations or compositions ;

and references in this subsection to duty being payable in connection with an event shall, in relation to legacy duty, include its being payable when the legacy is paid, delivered, retained, satisfied or discharged in connection with that event.

(3)The events referred to in the last foregoing subsection are any of the following events happening on or after the sixteenth day of April, nineteen hundred and forty-seven, that is to say—

(a)the death of any person ;

(b)the determination or failure of any charge, estate, interest or trust ;

(c)the exercise of a power of appointment ;

(d)the making of any payment or the application of any property, if the duty under the existing law is or would be chargeable—

(i)under section eleven of the [36 Geo. 3. c. 52.] Legacy Duty Act, 1796, or under that section as applied by section thirty-two of the [16 & 17 Vict. c. 51.] Succession Duty Act, 1853 (which deal with benefits of uncertain amount receivable from time to time) ; or

(ii)under section twenty-five of the Succession Duty Act, 1853 (which deals with premiums for the renewal of a lease or the grant of a reversionary lease) ;

(e)any other event which, under the provisions of the relevant will or disposition or the rules governing the distribution of the intestate's estate, affects the right to the legacy or succession or to the enjoyment thereof or which changes the nature of the property comprised therein or any part of that property.

(4)Subject to the next following subsection, the further duty charged by virtue of this section shall, where the duty under the existing law was before the said sixteenth day of April paid on the capital value of property given for successive interests to persons all chargeable with the same rate of duty, be accounted for, paid and borne by the same persons and in the same manner as if the provisions applicable in cases where all persons having successive interests are chargeable with the same rate of duty were the same as those applicable where they are chargeable with different rates of duty.

(5)Where an interest in expectancy in any property has before the said sixteenth day of April been bona fide sold or mortgaged for full consideration in money or money's worth, then no other duty on that property shall be payable by the purchaser or mortgagee when the interest falls into possession than would have been payable if this Part of this Act had not been passed, and in the case of a mortgage any higher duty payable by the mortgagor shall rank as a charge subject to the mortgage.

(6)For the purposes of this section, the expression " legacy " includes residue and share of residue and the expression " the existing law " means the law apart from this section, and—

(a)references to a legacy or succession being subject to duty shall be taken as referring to its being or having at any time been charged or chargeable therewith ; and

(b)a succession shall be deemed to arise on the happening of the death by reason of which the successor, or any person in his right or on his behalf, becomes entitled in possession to the succession or to the receipt of the income or profits thereof.

50Limits of value.

(1)In the case of a person dying on or after the sixteenth day of April, nineteen hundred and forty-seven, the following enactments, namely—

(a)subsection (3) of section sixteen of the [57 & 58 Vict. c. 30.] Finance Act, 1894 (which provides for treating as an estate by itself for the purposes of estate duty, and for exempting from legacy and succession duty, any estate not exceeding one thousand pounds exclusive of property settled otherwise than by the will of the deceased) ; and

(b)subsection (2) of section thirteen of the [4 & 5 Geo. 5. c. 10.] Finance Act, 1914 (which makes consequential provision for reducing the legacy or succession duty payable when the margin above the limit of value under the said section sixteen is small) ;

shall have effect with the words " two thousand pounds " instead of the words " one thousand pounds ", and accordingly the said section thirteen shall have effect also with the words " estate duty is payable on the death of the deceased " instead of the words substituted therefor by the Tenth Schedule to the Finance Act, 1946.

(2)In respect of a legacy or succession which would apart from this provision be chargeable with the further duty under this Act, no legacy or succession duty shall be charged—

(a)if the amount or value of the legacy or succession together with any other legacies or successions derived by the same person from the testator, intestate or predecessor or passing to that person on the same death as the first mentioned legacy or succession does not exceed one hundred pounds ; or

(b)if the person taking the legacy or succession (whatever his age) is a child of the testator, intestate or predecessor and, had he been under the age of twenty-one years, the legacy or succession would have been exempt from duty under proviso (c) to subsection (2) of section fifty-eight of the [10 Edw. 7. & 1 Geo. 5. c. 8.] Finance (1909-10) Act, 1910, (which exempts legacies and successions of widows and infant children with a limit of value of two thousand pounds).

(3)Where, by virtue of any of the provisos to subsection (2) of the said section fifty-eight or by virtue of the last foregoing subsection, any legacy or succession charged with the further duty under this Act would have been exempt from duty if the limit of value for the exemption had not been exceeded, the amount of legacy and succession duty on the legacy or succession and any other such legacies and successions which would have been exempt with it shall not be greater than the amount by which the limit of value is exceeded.

(4)The exemption of property from legacy duty by virtue of this section shall not affect any exemption from succession duty which would have applied had the legacy duty been chargeable.

(5)For the purposes of this section the expression " legacy " includes residue and share of residue and in subsections (2) and (3) thereof—

(a)any reference to a legacy or succession passing to any person shall include a legacy or succession passing in his right or on his behalf to some other person ; and

(b)any reference to a legacy or succession chargeable or charged with the further duty under this Act shall include a legacy or succession which would be so if it had not been given or created for public or charitable purposes.

51Relief from estate duty on bearer securities compulsorily registered.

Where, in consequence of the restrictions imposed by the Defence (Finance) Regulations, 1939, or the [10 & 11 Geo. 6. c. 14.] Exchange Control Act, 1947, on the issue of coupons representing dividends or interest, bearer securities situate outside the United Kingdom have been or are converted into or exchanged for registered securities situate in Great Britain, then for the purposes of any claim for estate duty in respect of the passing of the registered securities on a death occurring after the thirty-first day of March, nineteen hundred and forty-seven, they shall be treated as situate outside Great Britain :

Provided that this section shall apply only if, between the conversion or exchange and the death (or, in a case where the securities pass by reason of a gift inter vivos or of the disposition or determination of an interest limited to cease on the death, between the conversion or exchange and the gift, disposition or determination), the securities neither have been disposed of nor have passed on the death of a person competent to dispose thereof.