As amended ( in the Standing Committee), considered.
New Clause—(Accumulations Of Income)
(1) The following provisions of this section shall have effect in substitution for the provisions of the Accumulations Act, 1800, and that Act is hereby repealed.
(2) No person may by any will, settlement or other dispositions dispose of any property in such manner that the income thereof shall be wholly or partially accumulated for any longer period than one of the following, that is to say—
(3) In every case where any accumulation is directed otherwise than as aforesaid, the direction shall, save as hereinafter provided, be void, and the income directed to be accumulated shall, so long as the same is directed to be accumulated contrary to this section, go to and be received by the person or persons who would have been entitled thereto if such accumulation had not been directed.
(4) For avoidance of doubt it is hereby declared that, in the case of a settlement or other disposition inter vivos, a direction to accumulate income during a period specified in paragraph ( d) of subsection (2) of this section shall not be void, nor shall the accumulation of the income be contrary to this section, solely by reason of the fact that the period begins during the life of the grantor and ends after his death.
(5) The restrictions imposed by this section apply to wills, settlements and other dispositions made on or after the twenty-eighth day of July, eighteen hundred, but, in the case of wills, only where the testator was living and of testamentary capacity after the end of one year from that date.
(6) In this section "minority" in relation to any person means the period beginning with the birth of the person and ending with his attainment of the age of twenty-one years, and "grantor" includes settlor and, in relation to a will, the testator.—[ The Lord Advocate.]
Brought up, and read the First time.
10.57 p.m.
I beg to move, That the Clause be read a Second time.
The Clause gives effect to an undertaking which I gave slightly halfheartedly in the Committee stage. It is tied up with a later Amendment to delete Clause 5. During the Committee stage the then hon. and learned Member for Paisley, Mr. D. Johnston, suggested that the provisions of the Accumulations Act, 1800, should be re-written in the Bill and not merely referred to. That was done in England about 35 years ago. On consideration, I felt that it would be easier for those who have to use this Bill when it becomes an Act that we should write out in modern language what the Accumulations Act, 1800, says and put in in Subsection (4) what really is a simpler and clearer statement than what we have in Clause 5 at present. I shall not now deal with Subsection (4) because we dealt with the substance of it in Committee.I am very grateful to the Lord Advocate for bringing forward the new Clause.
I think that I should correct his memory. He said that in Committee the Amendment was moved by Mr. Douglas Johnston, as he then was, the Member of Parliament for Paisley. His memory is at fault. I had the honour of moving it because by that time Mr. Johnston had become Lord Johnston and was a judge of the Court of Session.The hon. Gentleman is quite right.
Mr. Johnston, as he then was, raised the matter in the debate in relation to the principle of the Bill. I hope that I made clear during the Committee stage that the long Amendment which I moved was not the child of my poor little brain but the child of the brain of the then hon. Member for Paisley which I had merely adopted when its parent was disabled from continuing in membership of this House.
The effect of the Clause, as I understand it, is to incorporate in the Bill the words that were used in the English Act of 1925 and so enable us to get rid once and for all in Scotland of the Accumulations Act, 1800, which was repealed for England some 36 years ago and which can now be repealed for Scotland by making this Amendment. It will thus be certain that persons in Scotland who become liable for Estate Duty are in an equally favourable position as people similarly placed in England, so that Scottish people might get the same benefits from tax avoidance as English people. 11.0 p.m. The net effect of the new Clause will be to reduce the amount of money collected by the Chancellor of the Exchequer in Estate Duty and, goodness knows, if we carry this process much further we shall have abolished Estate Duty altogether.Question put and agreed to.
Clause read a Second time and added to the Bill.
Clause 1—(Jurisdiction Of Court In Relation To Variation Of Trust Purposes)
I beg to move, in page 2, line 4, at end insert:
(2) For the purposes of the foregoing subsection a person who is over the age of pupillarity but has not attained the age of twenty-one years (whether acting with the concurrence of a curator, administrator-at-law or other guardian or not) shall lie deemed to be incapable of assenting; but before approving an arrangement under that subsection on behalf of any such person the court shall take such account as it thinks appropriate of his attitude to the arrangement.
I think it would be for the convenience of the House to discuss, with this Amendment, the following Amendment in the name of the Lord Advocate.
I think it would be convenient to discuss the following three Amendments together, Mr. Deputy-Speaker.
The point raised in this Amendment is a new one, which I have discussed with a number of members of the legal profession since the Bill went through Committee. It arises from the fact that in Scotland persons under the age of 21 go through two stages; they start in pupillarity—a girl to the age of 12 and a boy to 14—and from then they are in minority until the age of 21. A minor in Scotland has fairly wide powers. It depends, to some extent, on whether or not he has a curator. He can enter into contracts, for example, but for four years after reaching the age of 21 he can reduce the contract on the ground that he has suffered some sort of prejudice—what is called lesion—but I think that "prejudice" is the lay phrase that hon. Members will understand. In the Bill as it stands a court would not be able to give consent to a claim on behalf of a minor, although it could on behalf of a pupil. Because of a minor's right during the four years after reaching the age of 21 to annul a contract, no trustee is going, in practice, to accept a minor's signature on the dotted line. Accordingly, I felt it right —and this is a matter which the Law Reform Committee did not consider, and I have discussed it with one or two of that Committee's members and other bodies and I think that we are all agreed that if this is going to work the court must have power to give consent on behalf of a minor as well as a pupil—that before approving the arrangement a court shall take such account as it thinks appropriate of the minor's attitude. If the minor were a girl aged 20, and married, and if she objected to the arrangement, there is little doubt that a court would reject it on her behalf as well. This is a necessary provision in order to make this workable.The Lord Advocate seems to have made out a case for the Amendment. My only difficulty is that, so far as I can see, a pupil and a minor are not specifically referred to in the foregoing subsection, so that the first Amendment states:
That seems to be perfectly reasonable, but the point of all this, apparently, is to bring out the differentiation between a pupil and a minor and to provide appropriate protection for a curator or guardian. But the only reference to age in the foregoing subsection is a reference to non-age."(2) For the purpose of the foregoing subsection a person who is over the age of pupillitary but has not attained the age of twenty-one years (whether acing with the concurrence of a curator, administrator-at-law or other guardian or not) shall be deemed to be incapable of assenting; but before approving an arrangement under that subsection on behalf of any such person the court shall take such account as it thinks appropriate of his attitude to the arrangement."
Unborn?
"Non-age" does not mean unborn. I understand that nonage is under 21. I should have thought that the need for subsection (2) would not have arisen inasmuch as the whole of the foregoing subsection deals with the person of non-age. However, I am in a little difficulty about it. I appreciate that I may not have listened sufficiently keenly to the learned Lord Advocate. He seemed to be making a case for the Amendment, but I think what he said gave the impression that the foregoing subsection dealt with pupils and minors whereas it does not deal with pupils and minors at all.
The hon. Gentleman is quite right. Non-age includes both minors and pupils. But in lines 9 and 10 we refer to
A pupil is by reason of his age incapable of assenting, but normally a minor, although he is under 21, is not incapable of assenting merely because of his age. I hope I have made this rather complicated matter clear. That is why we refer back. In fact, under the Bill as it stands, a minor would not come under Clause 1 (1, a) except in very special circumstances."… any of the beneficiaries who by reason of non-age or other incapacity is incapable of assenting …"
Amendment agreed to.
Further Amendments made: In page 2, line 4, at end insert:
(3) Where the court has approved an arrangement on behalf of any person under subsection (1) of this section, or that subsection as extended by the last foregoing subsection, the arrangement shall not be reducible by that person on grounds of minority and lesion.
In line 5, leave out "the foregoing subsection" and insert:
"subsection (1) of this section."
In line 25, leave out "the foregoing subsection" and insert:
"subsection (1) of this section or that subsection as extended by subsection (2) of this section."—[The Lord Advocate.]
I beg to move, in page 2, to leave out line 36.
This and the next Amendment in Clause 2, page 3, go with the Amendment in Clause 6, page 4, line 1.
These Amendments are drafted to comply with an undertaking which I gave in Committee to the hon. Members for Hamilton (Mr. T. Fraser) and for Edinburgh, East (Mr. Willis) when I withdrew a rather ham-handed Amendment which I had on the Order Paper. I said that I would think again, and this is the result which I think makes the position rather better than it was.
May I say how obliged I am to the Lord Advocate for putting these Amendments on the Order Paper. We had an animated discussion in Standing Committee on the question of construing this Measure with the Act of 1921. I know that my hon. Friend the Member for Edinburgh, East (Mr. Willis) joins with me in thanking the Lord Advocate.
Amendment agreed to.
Clause 2—(Validity Of Certain Transactions By Trustees)
Amendment made: In page 3, leave out line 11.—[ The Lord Advocate.]
Clause 4—(Power Of Trustees To Acquire Interests In Residential Accommodation For Use Of Beneficiaries)
I beg to move, in page 3, line 25, to leave out from "required" to the end of line 28 and to insert:
This Amendment has been suggested by various members of the legal profession in Scotland who will have to work the Measure. Their objection to the words as they stand was that they thought they were ambiguous. I do not go the whole way with them. I think the words are quite clear. However, they said it would be of much greater use to trustees and beneficiaries if the power given were slightly widened. As the Bill stands, they can only use this power of providing accommodation if a testator has, in fact, left the use of the house to a particular beneficiary. This gives them a wider power inasmuch as, even if it is not specifically mentioned, they can provide accommodation, let us say, for the widow, a sister, a niece who might have been helping the testator, and so on. It extends the power, although the overriding factor is still there, that it must not be contrary to the general purposes of the trust."to enable the trustees to provide a suitable residence for occupation by any of the beneficiaries".
Amendment agreed to.
Further Amendment made: In page 3, line 29, leave out Clause 5.—[ The Lord Advocate.]
Clause 6—(Interpretation)
Amendment made: In page 4, line 1, leave out subsection (1) and insert:
(1) In this Act, unless the context otherwise requires.—
"The Act of 1921" means the Trusts (Scotland) Act, 1921;
"the court" means the Court of Session; and
"trust" and "trustee" have the same meanings respectively as in the Act of 1921. —[The Lord Advocate.]
11.11 p.m.
I beg to move, That the Bill be now read the Third time.
At this stage, hon. Members will not wish me to go through this rather technical legal Bill. I am grateful to hon. Members for the co-operation which I had in Committee and here. I believe that it will be a Bill of great help to trustees in Scotland, and I commend it to the House.Question put and agreed to.
Bill accordingly read the Third time and passed.
Credit-Sale Agreements (Scotland) Bill
Not amended ( in the Standing Committee), considered; read the Third time and passed.
Scottish Grand Committee
Ordered,
That for the remainder of the present Session Standing Order No. 61 (Special procedure for Scottish Estimates) shall have effect as if the word "four" were substituted for the word "six" in line 11 and Standing Order No. 61A (Matters relating exclusively to Scotland) shall have effect as if the word "four" were substituted for the word "two" in line 15.—[Sir H. Harrison.]
Public Health Money
Resolution reported,
That, for the purposes of any Act of the present Session to amend the law relating to building byelaws and trade effluents and to make such amendments in the law relating to public health and the functions of local authorities as are commonly made in local Acts, it is expedient to authorise—A. The payment out of moneys provided by Parliament of: (1) any expenses incurred by any Minister under the said Act; (2) any increase attributable to the said Act in the sums so payable under any other Act. B. The payment into the Exchequer of any sums received by any Minister by virtue of the said Act.
Resolution agreed to.