the value of the succession is taken to be the principal value of the property after deducting estate duty (s).

Succession duty is paid by eight equal half-yearly instalments, or in the case of successions after July 1st, 1888, in two equal moieties (t). The first of the instalments must be paid at the expiration of twelve months next after the successor shall have become entitled to the beneficial enjoyment of the property. If the successor die before the instalments have become due, the instalments not due at his decease will cease to be payable, except in the case of a successor who may have been competent to dispose by will (u) of a continuing interest in such property, in which case the instalments unpaid at his death. will be a continuing charge on such interest in exoneration of his other property, and will be payable by the owner for the time being of such interest (r); and it has been held that the circumstance that a person becoming entitled and dying before all the instalments of duty are payable is insane or a feme covert, does not exempt the estate of such person from the unpaid instalments (u), and the case of a tenant in tail who disentails and acquires the fee, and dies before all the instalments have become payable, is not within the exemption (~).

In estimating the annual value of lands used for agricultural purposes, houses, buildings, tithes, teinds, rent-charges, and other property yielding or capable

(s) 57 & 58 Vict. c. 30, s. 18.

(t) 51 Vict. c. 8, s. 22.

(u) Att.-Gen. v. Hallett (1857), 2 H. & N. 368.

(x) 16 & 17 Vict. c. 51, s. 21.

(2) Lilford v. Att.-Gen. (1867), L. R. 2 H. L. 63.

of yielding income not of a fluctuating character, an allowance is to be made of all necessary outgoings (a); but where the legal estate is vested in trustees, the parties beneficially interested will not be entitled to deduct as necessary outgoing expenses of management incurred by such trustees (b).

By s. 38 of the Succession Duty Act, which has received a very liberal construction (c), where any successor upon taking a succession shall be bound to relinquish or be deprived of any other property, he is entitled to an allowance in respect of such property in computing the assessable value of his succession.

Duty a First Charge. The duty imposed is a first charge on the interest of the successor, and of all persons claiming in his right, on all the real and personal property in respect whereof the same is assessed, and the duty will be a debt due to the Crown from the successor, having, in the case of real property, priority over all charges and interests created by him, but such duty does not charge or affect any real property of the successor other than the property comprised in the succession.

Exemptions from Duty.-No succession duty is payable in the following cases:

(1) When the successor is the husband or wife of the predecessor (d).

(a) 16 & 17 Vict. c. 51, s. 22.

(b) In re Elres (1858), 3 H. & N. 719; In the Matter of Earl Cowley's Succession (1866), L. R. 1 Ex. 288.

(c) Commissioners of Inland Revenue v. Harrison (1874), L. R. 7 H. L. 1.

(d) 16 & 17 Vict. c. 51, s. 18.

(2) When the principal value of the whole property is under £100.

(3) Where the succession takes place on the death of some person after August 1st, 1894, the net value of whose property does not exceed £1,000 and estate duty has been paid on such property (e).

(4) If the successor is a lineal descendent or ancestor of the predecessor and estate

duty (f) or probate duty (g) has already been paid in respect of the property.

In addition to these cases in which no duty is payable, a purchaser is not concerned with the question whether Succession Duty has been paid in any of the following cases:

(1) When land is sold under an overriding power of sale, whether such power is express or implied (h).

(2) When land is sold in pursuance of a trust for sale (i).

(3) When the sale is made under the Settled Estates Act (k) or the Settled Land Acts (l). (4) If the sucession took place more than twelve years before the sale (m).

(e) 57 & 58 Vict. c. 30. s. 16.

(f) lbid., s. 1.

(g) 44 Vict. c. 12, s. 41. Probate Duty (abolished in 1894) did not affect real estate unless it was converted in equity at the time of the death, e.g., partnership property or land contracted to be sold.

(h) 16 & 17 Vict. c. 51, s. 42; Dugdale v. Meadows (1870), L. R. 6 Ch. 501.

(i) Ibid., s. 29.

(k) In re Warner's Settled Estates (1881), 17 Ch. D. 711.

(1) Dart's Vendors and Purchasers, p. 669.

(m) 52 Vict. c. 7, s. 12.

Receipt. Every receipt and certificate purporting to be in discharge of the whole duty payable for the time being in respect of any succession, or any part thereof will exonerate a bonâ fide purchaser for valuable consideration and without notice from such duty, notwithstanding any suppression or misstatement in the account, upon the footing whereof the same may have been assessed, or any insufficiency of such assessment: and no bonâ fide purchaser of property for valuable consideration, under a title not appearing to confer a succession, shall be subject to any duty with which such property may be chargeable under the provisions of this Act, by reason of any extrinsic circumstances of which he may not have had notice at the time of such purchase (n).

Additional Duties.-By the Customs and Inland Revenue Act, 1888 (o), an additional succession duty was made payable in respect of successions upon deaths on or after July 1st, 1888. This duty was at the rate of 10s. per cent. when the successor was the lineal issue or ancestor of the predecessor, and in all other cases £1 10s. per cent. (p).

By the Customs and Inland Revenue Act, 1889 (q), a TEMPORARY ESTATE DUTY of 1 per cent. was imposed upon successions on the death of any person after June 1st, 1889, either where the value of such succession exceeded £10,000, or where the value of the succession, together with the value of any other benefit to the successor under the same

(n) 16 & 17 Vict. c. 51, s. 52. 51 & 52 Vict. c. 8, s. 21.

(2)

(p) Ibid., s. 21 (2).

(a) 52 Vict. c. 7, s. 6.

will or intestacy, exceeded £10,000. Temporary estate duty, like succession duty, is a first charge on the property (r). Leaseholds are charged with succession duty (s), but neither additional succession duty nor temporary estate duty was payable on a succession to leasehold property (t).

SECTION 13.

ESTATE DUTY.

Principle of the Finance Act.-The Finance Act, 1894 (u), imposed a new duty, called Estate Duty, upon all estates exceeding £100 of persons dying after August 1st, 1894. The principle on which this Act was founded is, that whenever property changes hand on death, the State is entitled to step in and take toll of the property as it passes without regard to its destination or to the degree of relationship, if any, that may have subsisted between the deceased and the person or persons succeeding (x).

What the Act has in view for the purposes of taxation is property passing on death, not, as in the case of Succession Duty, the interest of the successor, and not the interest of the deceased, which, if it be a limited interest, can never pass (y).

(r) 52 Vict. c. 7, s. 6 (6).

(s) 16 & 17 Vict. c. 51, s. 19.

(t) 51 & 52 Vict. c. 8, s. 21 (1); 52 Vict. c. 7, s. 6 (1).

(u) 57 & 58 Vict. c. 30.

(x) See Earl Cowley v. Inland Revenue Commissioners, [1899] A. C., at p. 211. Section 14 of the Finance Act, 1900, is an exception to this general proposition.

(y) Earl Cowley v. Inland Revenue Commissioners, supra, at p. 212; but cf. s. 2(1)(b)(d).