Major Hicks Beach
I beg to move, in page 20, line 24, to leave out from "others" to the end of line 27 and to insert:each of such persons shall for all purposes of the estate duty chargeable on his death be deemed to have died immediately before the other persons so dying".The Amendment is not in any way intended to be critical of the object of the Clause, of which I think the whole Committee thoroughly approves. As we are all aware, the Clause seeks to overcome a grossly unfair, though perfectly proper, decision of the Courts in re Beare, where double duty was levied when a husband and wife were killed in a road accident. Great credit is due to my hon. Friend the Member for Brighton, Pavilion (Mr. Teeling), who raised this matter by means of a Private Member's Bill and, with all respect to the Government Front Bench, made a great contribution in forcing the Government to take active steps to overcome a difficulty 1249 which probably had been known for many years.
This is a purely drafting Amendment which seeks to suggest to the Government that it would be very much better to draw a clause to deal with the problem by adopting the wording of Section 46 (3) of the Administration of Estates Act, 1925, as amended by Section 1 of the Intestates Estates Act, 1952—a later wording than that of Section 184 of the Law of Property Act, 1925. Consideration should be given to drafting the Clause in such a way as to make certain that it does what the whole Committee wants it to do.
§ The Financial Secretary to the Treasury (Mr. J. E. S. Simon)
I should like to endorse what was said by my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach) in paying tribute to my hon. Friend the Member for Brighton, Pavilion (Mr. Teeling) for producing the reform of the law which this Clause embodies. If I cannot accept the Amendment, it is not because of any difference of view between my hon. and gallant Friend and myself as to what we desire to achieve. We are at one there. The difference lies in the fact that I do not think that the Amendment does what my hon. and gallant Friend wishes to do, whereas I think that the Clause does.
The Clause is designed to deal with cases where people die together in a common disaster and the legal fiction deems the younger to have survived the older. The Committee will be aware of one case in particular, where a husband and wife died together in a common disaster, with the result that Estate Duty became payable first on the husband's death and secondly on the wife's death because of the legal fiction that she survived him—to the detriment of four young children.
It was quite clear that when the matter was debated on my hon. Friend's Bill the feeling of the House was that that was a position which ought to be rectified. The natural way in which to do so would be to refer to the devolution of property; but the Amendment does not do so, and that, I submit, is its first fault. Secondly, it poses two mutually inconsistent suppositions about the order of the two deaths and that, on the face of it, produces a curious result.
1250 My hon. Friend has written into the Clause that if A and B die in circumstances which render it uncertain as to who survived the other, then, for the purposes of Estate Duty, A has been presumed to have died before B and B has been presumed to have died before A. It would be extremely odd to write that into an Act of Parliament; but let me give an actual example of the results of my hon. Friend's intention.
We shall be discussing later a Clause which seeks to amend Section 40 of the Finance Act, 1930, relating to sales of works of art and their exemption from death duty in certain circumstances. Under that provision, duty is payable on the proceeds of sale in respect of the last death; the death of the person to whom the object had passed. Under the terms of my hon. Friend's Amendment, each estate could claim that it was exempt because the other would be deemed to have survived it and this reveals what is, on the face of it, a curious formula to write into an Act of Parliament.
What the Clause does is to say that, there being a legal fiction governing the devolution of property which results in the double charge for duty, and the Chancellor having decided that the double charge should not be imposed, Estate Duty should be charged as if neither estate has any property derived from the other. Estate Duty is a mutation duty chargeable on property which passes on the death of one person to another person. If we ensure, in the words of the Clause, that the… estate duty in respect of each death shall be ascertained as if they had died at the same instant and all relevant property had devolved accordinglyit is clear that there is no possibility of the property passing from one estate to another, and what we all desire will have been achieved.
§ Amendment negatived.
§ Clause ordered to stand part of the Bill.1251
§ The Temporary Chairman
The hon. Member stood up after I had put the Question. The Committee has decided.