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Death Duties

Volume 436: debated on Tuesday 15 April 1947

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I turn to Death Duties. Last year I made some changes in the Estate Duty which brings in more than 90 per cent. of the total Death Duty revenue. By raising the exemption limit from £10o to £2,000 I exempted last year three quarters of the estates annually liable, and by regrading the duty on the other quarter I brought in £22 million more revenue in a full year. I have already referred to the adjustment of the Probate Fees to be made this year. To follow up this lightening of the burden on small estates, I now propose to make an excursion, with the same ideas in mind as I had last year, among what I may call the minor Death Duties. I propose to increase the rate of the Legacy and Succession Duties, while increasing the exemptions and reliefs for small inheritances. The Legacy and Succession Duties, fall, not, as the Estate Duty does on the total property passing at death, but on the portions of such property inherited by particular persons or by charities. To use legal jargon, for which I apologise, personalty pays Legacy Duty, realty pays Succession Duty, and both duties are based on consanguinity, which means the relationship of the deceased person to the beneficiary. The rate of duty now is one per cent. for widows and children; five per cent. for brothers, sisters, nephews and nieces; and 10 per cent. in other cases.

I propose to double all those rates, making them two, 10 and 20 per cent. respectively, but, at the same time, to give the following reliefs. Now when the total estate is less than £1,000, no Legacy or Succession Duty is charged on its distribution. I propose to raise this figure to 2,000, the same figure as the new exemption limit for Estate Duty which I introduced last year. At present, in the second place, if the total estate is less than £15,000 no Legacy or Succession Duty is payable on bequests to widows and children. That will remain unchanged. Thirdly, at present, no Legacy or Succession Duty is payable on bequests or benefits of less than £2,000 to a widow, £2,000 to an infant child, or £1,000 to a child of full age. I propose to retain these reliefs but, in the case of a child of full age, to raise the limit from £1,000 to £2,000. Fourthly, I intend to provide that benefits of no more than £100, no matter to whom accruing by inheritance, shall be exempt. Finally, I propose no increase in the rate on charitable bequests; this will remain at 10 per cent. I propose that these changes shall apply to deaths occurring after today. I estimate the increased yield at £9,000,000 in a full year. The yield this year will be very small, since these duties are normally collected a year or more after the date of death.