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The Pamphlet Collection of Sir Robert Stout: Volume 56

The Death Duties. — Leaflet No. XXXVIII

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The Death Duties.

Leaflet No. XXXVIII.

Cobden Club Motto

The "Death Duties" are the probate, account, legacy, and succession duties.

The first two apply only to personal estate, such as goods, money, and leasehold property. Legacy duty applies mainly to personal estate, but it is also chargeable on money arising from the sale of real estate, and on legacies payable out of: real estate. Succession duty applies mainly to real estate, or what is called realty, i.e., houses (including leaseholds) and lands. Leaseholds, being personal estate, were always liable to legacy duty until in 1853 they were thrown into the Succession Duty Act, and made liable to succession duty, still remaining charged with probate duty as well.

Probate duty is paid upon the net amount off personalty left. Legacy and succession duty upon the separate amounts inherited.

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The amount of probate duty depends upon the value of the personalty left by the deceased. If this does not exceed £500, it is charged at the rate of 2 per cent.; if over £500, and not above £1,000, 2½ per cent.; if over £1,000, 3 per cent. No probate duty at all is charged upon realty.

The rate of legacy and succession duty is fixed by the degree of the blood relationship of the legatee or successor to the dead man. Thus:—
Legacy to husband or wife, or to any of the Royal Family Free.
To a child or descendant of a child of the deceased, or father or mother, or any lineal ancestor of deceased (see note below) 1 per cent.
To brother or sister, or any descendant 3 per cent.
To uncle or aunt 5 per cent.
To great uncle or aunt 6 per cent.
To any other relation, or to any person not a blood relation to deceased 10 per cent.

[The legacy duty, at the rate of 1 per cent., is not payable where probate duty has been paid, excepting in some cases, such as foreign property.]

So if a man leave his wife.£50,000 in personalty (that being his whole estate), she has to pay.£1,500 probate duty; if it is left in houses or land (realty) she would pay nothing.

But so far only a small portion of the tenderness exhibited towards realty, compared with the treatment given to personally, is shown. Probate and legacy duties are charged upon the full value. But in the case of succession duty, the annual income from the houses or lands is treated as an annuity to that amount, and the tax is page 3 calculated upon the value of an annuity to that amount t for the number of years the owner may be supposed to live. Now rich people are generally long livers, and the 2 average rate of the succession duty—the sole duty on i real estate—is 2 per cent. only.

Again, the successor to personalty must pay the full 1 duty at once, but the landowner is allowed four and a half f years in which to pay his reduced duty by eight half-yearly instalments.

Legacy and Succession Duty, calculated as for a son. Interest on Inheritance calculated at 3½ per cent. Age of Inheritor. 21 40 60 75 21 40 60 75 21 40 60 75 Value of Inheritance. £5,000 £100,000 £1,000,000 Landowner's Son. (Realty-Houses and Land.) Duty Paid. £ 30 26 17 9 602 521 340 189 6,020 5,206 3,402 1,893 Business Man's Son n (Personalty-Money, Goods, &c.) Duty Paid. £ 150 150 150 150 3,000 3,000 3,000 3,000 HI 30,000 30,000 30,000 30,000

Illustration of Death Duties.

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Business Man has to pay at once the whole amount.

Landowner is allowed four and a half years in which to pay by eight half-yearly instalments.

From 1797 to 1884 Personalty paid £217,000,000
Succession Duty (Realty) (1853 to 1884) 22,000,000
Difference—Loss to the country and gain to the owners of "real" Property £195,000,000

Credit ought to be given for the sacrifice which Liberal statesmen make in the great cause of Liberal progress. To the estates of several members of Mr. Gladstone's late Cabinet the increase in the death duties, proposed by Mr. Childers and rejected by the combined forces of the Opposition, would have involved enormous cost. As an illustration it may be mentioned that the Marquis of Hartington, who is heir-apparent to the Duke of Devonshire, estimated that the death duties of the Budget, of which he was a supporter, would have cost his family £160,000 every time that the estates of the Duke of Devonshire passed from father to son.

Messrs. Cassell & Company, Limited, La Belle Sauvage Yard, London, E.C., supply this Leaflet in packets of 100, price 2s.