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Clause 29—(Extension Of Exemption For Small Gifts Inter Vivos)

Volume 466: debated on Monday 27 June 1949

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I beg to move, in page 21, line 9, to leave out from "amount," to the end of the Clause, and to add:

"if the following condition is satisfied, namely, that bona fide possession of enjoyment of the property so taken was assumed by the donee immediately upon the gift and thenceforth retained to the entire exclusion of the deceased or of any benefit to him by contract or otherwise.
(2) Where in the case of any donee such gifts do not exceed in the aggregate five hundred pounds in value or in amount and bona fide possession or enjoyment of some but not all of the property so taken was assumed by the donee immediately upon the gift and thenceforth retained to the entire exclusion of the deceased or of any benefit to him by contract or otherwise, the foregoing subsection shall apply to the gift or gifts of which such possession or enjoyment was so taken or assumed and retained but not to the other or others."
Here I gather the Government are extending the exemption of small inter vivos gifts from £100 to £500. My Amendment seeks to make clear what I do not think is clear from the Clause, that if such a gift is out of settled or unsettled property it will equally get the benefit of this concession.

The answer is that in making this change my right hon. and learned Friend has in mind small gifts up to the sum of £500 and to include interests in settled property would, in his view, be going beyond the scope of what he has in mind. There is really no ground for exempting gifts which form the subject of formal settlements. If the right hon. Gentleman is thinking of settlements that form part of a marriage settlement, they are dealt with already, and do not come into this.

I wish the right hon. Gentleman to make this clear. Suppose a man or a woman is tenant for life of a marriage settlement and wishes to release the sum of £200 in favour of a daughter. Would the release of that £200 get the benefit of this exemption or not?

It gets exemption under another Finance Act altogether. Where a marriage settlement takes place, it is assumed, and properly so, that the gift, if a gift of this kind passes, is made in consideration of the marriage. Therefore, it does not come into this Clause at all. It is dealt with under another Finance Act and would be exempted.

I do not think the right hon. Gentleman is quite right. The question of consideration of marriage does not affect this matter. I am discussing a position where a man or woman is tenant for life of a settlement and that man or woman wishes to hand over to his child, or any other person who happens to be within the terms of the settlement, a sum of £200. It would be perfectly reasonable and should think in accordance with the wishes of this Committee, that such a release should be treated in exactly the same way as if the same person had been able to hand over £200 to the same individual out of his private estate. I cannot believe the Committee would wish the matter to be left in its present position, but if that is the case, I would press this Amendment. If, however, the right hon. Gentleman will assure me that he will look into the matter before the Report stage I shall be glad to ask leave to withdraw.

All I can say is that gifts made in consideration of marriage are already covered under a previous enactment. If the type of gift envisaged by the right hon. Gentleman is not of that kind all I can say is, it is not exempted and it is not the intention of my right hon. Friend to exempt it.

Division No. 179.]


[7.15 p.m.

Acland, Sir RichardBalfour, A.Blyton, W. R.
Adams, Richard (Balham)Barstow, P. G.Bottomley, A. G.
Albu, A. H.Barton, C.Bowden, Fig.-Offr. H. W.
Allen, A. C. (Bosworth)Battley, J. R.Braddock, Mrs. E. M. (L'pl, Exch'ge)
Alpass, J. H.Bechervaise, A. E.Braddock, T. (Mitcham)
Anderson, A. (Motherwell)Benson, G.Brook, D. (Halifax)
Attewell, H. C.Berry, H.Brooks, T. J. (Rothwell)
Austin, H. LewisBeswick, F.Broughton, Dr. A. D. D.
Awbery, S. S.Bevan, Rt. Hon. A. (Ebbw Vale)Brown, T. J. (Ince)
Ayles, W. H.Binns, J.Burden, T. W.
Ayrton Gould, Mrs. B.Blackburn, A. R.Burke, W. A.
Baird, J.Blenkinsop, A.Butter, H. W. (Hackney, S.)

satisfactory. I can quite see that it is in the interests of the Government, in the discharge of their responsibility, to put a monetary limit upon the extent of the gifts to which this exemption applies. But I cannot see, and no attempt has been made to explain, why we should draw a distinction between the same sum of money which a man hands to a child out of his free capital or out of settled capital. I cannot see why the sum should not come out of settled capital as out of free capital, and no attempt has been made to explain why it is that a gift made out of free capital is perfectly harmless and can draw exemption, while a gift made out of settled capital is in some way so obnoxious that it is not entitled to exemption. Unless we can be given some clear explanation, I shall ask my hon. Friends to press for a Division.

I think I can give an explanation. A man can give a gift out of free capital to a naughty lady but he can only give settled capital in all probability, to relatives. This is just another instance of the Government's attack on the family. Where money is settled on the family and is family money, the right hon. and learned Gentleman puts a special burden on it. This is rather a cute little way of once again attacking the family in this Bill. I think that is the natural explanation, short of the Government having an answer. We know the Government are going out of their way, even in these small things, to attack the family rather than the individual who may make a gift to some friend outside the family. It is a shocking position, but those of us who know the Government expect them to do these things.

Question put, "That the words proposed to be left out, stand part of the Clause."

The Committee divided: Ayes, 250; Noes, 102.

Carmichael, JamesHughes, H. D. (W'lverh'pton, W.)Ranger, J.
Castle, Mrs. B. A.Hutchinson, H. L. (Rusholme)Reid, T. (Swindon)
Chamberlain, R. A.Irvine, A. J. (Liverpool)Rhodes, H.
Champion, A. J.Irving, W. J. (Tottenham, N.)Roberts, Goronwy (Caernarvonshire)
Chater, D.Jay, D. P. T.Robertson, J. J. (Berwick)
Chetwynd, G. R.Jeger, G. (Winchester)Robinson, Kenneth (St. Pancras, N.)
Cluse, W. S.Jeger, Dr. S. W. (St. Pancras, S. E.)Rogers, G. H. R.
Collick, P.Jones, D. T. (Hartlepool)Ross, William (Kilmarnock)
Collindridge, F.Jones, Elwyn (Plaistow)Royle, C.
Collins, V. J.Jones, J. H. (Bolton)Scott-Elliot, W.
Colman, Miss G. M.Jones, P. Asterley (Hitchin)Sharp, Granville
Corbet, Mrs. F. K. (Camb'well, N. W.)Keenan, W.Shurmer, P.
Corlett, Dr. J.King, E. M.Silverman, J. (Erdington)
Cove, W. G.Kinghorn, Sqn.-Ldr. E.Silverman, S. S. (Nelson)
Cripps, Rt. Hon. Sir S.Kinley, J.Simmons, C. J.
Daggar, G.Kirby, B. V.Skinnard, F. W.
Daines, P.Lee, F. (Hulme)Smith, C. (Colchester)
Dalton, Rt. Hon. H.Leonard, W.Smith, S. H. (Hull, S. W.)
Davies, Edward (Burslem)Leslie, J. R.Snow, J. W.
Davies, Haydn (St. Pancras, S. W.)Levy, B. W.Sorensen, R. W.
Davies, R. J. (Westhoughton)Lewis, J. (Bolton)Soskice, Rt. Hon. Sir Frank
Deer, G.Lindgren, G. S.Sparks, J. A.
Delargy, H. J.Lipton, Lt.-Col M.Stewart, Michael (Fulham, E.)
Diamond, J.Logan, D. G.Stokes, R. R.
Dobbie, W.Longden, F.Stross, Dr. B.
Dodds, N. N.Lyne, A. W.Stubbs, A. E.
Donovan, T.McAdam, W.Summerskill, Rt. Hon. Edith
Driberg, T. E. N.McAllister, G.Sylvester, G. O.
Dugdale, J. (W. Bromwich)McEntee, V. La T.Symonds, A. L.
Dye, S.McGhee, H. G.Taylor, R. J. (Morpeth)
Ede, Rt. Hon. J. C.Mack, J. D.Taylor, Dr. S. (Barnet)
Edelman, M.McKay, J. (Wallsend)Thomas, D. E. (Aberdare)
Edwards, W. J. (Whitechapel)Mackay, R. W. G. (Hull, N. W.)Thomas, George (Cardiff)
Evans, John (Ogmore)McLeavy, F.Thomas, I. O. (Wrekin)
Evans, S. N. (Wednesbury)MacPherson, Malcolm (Stirling)Thorneycroft, Harry (Clayton)
Ewart, R.Mainwaring, W. H.Titterington, M. F.
Fairhurst, F.Mallalieu, J. P. W. (Huddersfield)Tolley, L.
Farthing, W. J.Mann, Mrs. J.Tomlinson, Rt. Hon. G.
Field, Capt. W. J.Mayhew, C. P.Turner-Samuels, M.
Follick, M.Mellish, R. J.Viant, S. P.
Foot, M. M.Middleton, Mrs. L.Wadsworth, G.
Forman, J. C.Mikardo, IanWalker, G. H.
Fraser, T. (Hamilton)Millington, Wing-Comdr. E. R.Wallace, G. D. (Chislehurst)
George, Lady M. Lloyd (Anglesey)Mitchison, G. R.Watkins, T. E.
Gibbins, J.Monslow, W.Weitzman, D.
Gibson, C. W.Moody, A. S.Wells, P. L. (Faversham)
Gilzean, A.Morris, Lt.-Col. H. (Sheffield, C.)Wells, W. T. (Walsall)
Glanville, J. E. (Consott)Morris, P. (Swansea, W.)West, D. G.
Gooch, E. G.Mort, D. L.Wheatley, Rt. Hon. John (Edin'gh, E.)
Goodrich, H. E.Moyle, A.White, H. (Derbyshire N. E.)
Grenfell, D. R.Murray, J. D.Whiteley, Rt. Hon. W.
Grey, C. F.Nally, W.Wilkes, L.
Grierson, E.Naylor, T. E.Wilkins, W. A.
Griffiths, D. (Rother Valley)Neal, H. (Claycross)Willey, F. T. (Sunderland)
Griffiths, Rt. Hon. J. (Llanelly)Nichol, Mrs. M. E. (Bradford, N.)Willey, O. G. (Cleveland)
Griffiths, W. D. (Moss Side)Oldfield, W. H.Williams, D. J. (Neath)
Gunter, R. J.Oliver, G. H.Williams, J. L. (Kelvingrove)
Guy, W. H.Orbach, M.Williams, Ronald (Wigan)
Hall, Rt. Hon. GlenvilPaling, Will T. (Dewsbury)Williams, Rt. Hon. T. (Don Valley)
Hamilton, Lieut.-Col. R.Palmer, A. M. F.Williams, W. T. (Hammersmith, S.)
Hardy, E. A.Pargiter, G. A.Williams, W. R. (Heston)
Hastings, Dr. Somerville.Parker, J.Willis, E.
Haworth, J.Paton, Mrs. F. (Rushcliffe)Wills, Mrs. E. A.
Henderson, Rt. Hn. A. (Kingswinford)Paton, J. (Norwich)Wilmot, Rt. Hon. J.
Herbison, Miss M.Pearson, A.Woodburn, Rt. Hon. A.
Hobson, C. R.Peart, T. F.Wyatt, W.
Holman, P.Poole, Cecil (Lichfield)Yates, V. F.
Holmes, H. E. (Hemsworth)Popplewell, E.Young, Sir R. (Newton)
Horabin, T. L.Porter, E. (Warrington)
Houghton, A. L. N. D. (Sowerby)Porter, G. (Leeds)TELLERS FOR THE AYES:
Hoy, J.Proctor, W. T.Mr. Joseph Henderson and
Hudson, J. H. (Ealing, W.)Pursey, Comdr. H.Mr. Hannan.
Hughes, Hector (Aberdeen N.)Randall, H. E.


Agnew, Cmdr. P. G.Braithwaite, Lt.-Comdr. J. G.Crockshank, Capt. Rt. Hon. H. F. C.
Assheton, Rt. Hon. R.Bromley-Davenport, Lt-Col. W.Crosthwaite-Eyre, Col. O. E.
Astor, Hon. M.Brown, W. J. (Rugby)Cuthbert, W. N.
Baldwin, A. E.Buchan-Hepburn, P. G. T.Darling, Sir W. Y.
Beamish, Maj. T. V. H.Butcher, H. W.Digby, Simon Wingfield
Birch, NigelChallen, C.Drayson, G. B.
Boles, Lt.-Col. D. C. (Wells)Clarke, Col. R. S.Drewe, C.
Boothby, R.Clifton-Brown, Lt.-Col. G.Dugdale, Maj. Sir T. (Richmond)
Bower, N.Conant, Maj. R. J. E.Duthie, W. S.

Eccles, D. M.Lambert, Hon. G.Robinson, Roland (Blackpool, S.)
Erroll, F. J.Lancaster, Col. C. G.Ropner, Col. L.
Fletcher, W. (Bury)Legge-Bourke, Maj. E. A. H.Ross, Sir R. D. (Londonderry)
Foster, J. G. (Northwich)Lindsay, M. (Solihull)Sanderson, Sir F.
Fraser, H. C. P. (Stone)Lloyd, Selwyn (Wirral)Savory, Prof. D. L.
Fraser, Sir I. (Lonsdale)Lucas, Major Sir J.Spearman, A. C. M.
Fyfe, Rt. Hon. Sir D. P. M.MacAndrew, Col. Sir C.Stanley, Rt. Hon. O.
Galbraith, Cmdr. T. D. (Polick)McFarlane, C. S.Strauss, Henry (English Universities)
Gammans, L. D.Maclay, Hon. J. S.Sutcliffe, H.
Grimston, R. V.Maclean, F. H. R. (Lancaster)Taylor, C. S. (Eastbourne)
Hannon, Sir P. (Moseley)MacLeod, J.Taylor, Vice-Adm. E. A. (P'dd't'n, S.)
Harden, J. R. E.Maitland, Comdr. J. W.Thomas, Ivor (Keighley)
Harris, F. W. (Croydon, N.)Mellor, Sir J.Touche, G. C.
Harvey, Air-Comdre, A. V.Moore, Lt.-Col. Sir T.Turton, R. H.
Headlam, Lieut.-Col. Rt. Hon. Sir. C.Morrison, Rt. Hon. W. S. (Cirencester)Wakefield, Sir W. W.
Hinchingbrooke, ViscountMott-Radclyffe, C. E.Watt, Sir G. S. Harvie
Hogg, Hon. Q.Neven-Spence, Sir B.Webbe, Sir H. (Abbey)
Hollis, M. C.Noble, Comdr. A. H. P.White, J. B. (Canterbury)
Hope, Lord J.Nulling, AnthonyWilliams, C. (Torquay)
Howard, Hon. A.Odey, G. W.Williams, Gerald (Tonbridge)
Hurd, A.Peake, Rt. Hon. O.Winterton, Rt. Hon. Earl
Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)Peto, Brig. C. H. M.York, C.
Hutchison, Col. J. R. (Glasgow, C.)Pickthorn, K.Young, Sir A. S. L. (Partick)
Jeffreys, General Sir G.Rayner, Brig. R.
Keeling, E. H.Reed, Sir S. (Aylesbury)TELLERS FOR THE NOES:
Kendall, W. D.Roberts, H. (Handsworth)Brigadier Mackeson and
Colonel Wheatley.

Clause ordered to stand part of the Bill.