The Gazette 1958-61

that a legacy fails if the legatee predeceases the testator. An exception is made in the case of a legacy to a child of the testator who predeceases the testator but who leaves issue living at the testator's death. It has been held that such a legacy is, to take the simplest example, liable to estate duty as part of the estate of the testator and also as part of the estate of the child who predeceased him. The law is being changed to provide that duty will be levied only on the testator's death as if the property were given directly to the living beneficiary. Aggregation Provisions Because of the increase in the exemption limit for estate duty from £2,000 to £5,000 under the Finance Act, 1960, exemption may apply in certain cases to property totalling as much as £15,000 in value. This situation arises because certain sub divisions of property, based on the distinction between settled and unsettled property, may under existing law constitute separate estates, each of which would be entitled to exemption if it did not exceed £5,000 in value. The law is being changed to provide that the deceased's unsettled property whatever its value will be aggregated with any property settled by him. Stamp Duty on Purchases of Land The Government have decided to include pro visions in the Finance Bill to" strengthen the existing 25% stamp duty legislation so as to bring within its scope certain procedures which at present enable or may enable non-nationals to acquire land without incurring liability to the duty. The Minister has in mind particularly purchases of land by pre-1947 companies with non-national shareholders. It is proposed that the higher rate of duty will not apply henceforward except where it is necessary for social purposes and it will not apply at all in urban areas or to land which is to be used for industrial purposes, and, where it does apply, the Minister for Lands will have power in suitable cases to authorise the granting of exemption. The amendment of the law which will be incorporated in the Finance Bill in respect of pre-i94y companies will apply retro actively from the date of the Budget Statement, April 19th. Provision will be made for the furnishing of declarations or statements to the Revenue Commissioners and there will be stringent penalties for failure to disclose information. THE REGISTRY Register A. SOLICITOR with large practice in southern town owing to ^ advancing years would like to communicate in confidence with a Solicitor interested in a purchase. He should have a sound •;. 1-03

Death Duties on Large Estates The present rates of estate duty applicable to estates exceeding £ioo,oooinvalueranging from 41 % to 53% will be lowered to 40% which will hence forward be the maximum rate of duty. Gifts to the State A section will be included in the Finance Bill exempting such gifts from estate duty. Gifts with Reservation Where the donor retains an interest in the property the entire property becomes liable to estate duty even although the donor's death takes place many years after the transfer. The Minister will introduce a provision under which if the donor dies more than three years after making the gift the charge to duty will be confined to the value of the benefit accruing to the recipient on the donor's death, e.g., allowance will be made for the reduction in the benefit due to a right of residence or maintenance. This principle will also be applied in relation to trusts ended more than three years before the life tenant's death where some benefit was reserved to the life tenant. Tax Avoidance—Gifts The Finance Bill will make provision to prevent tax avoidance by means of what is known as the "disappearing trick", e.g., where short dated securities such as Exchequer Bills are given as a gift and redeemed before the death of the donor which occurs within three years from the date of the gift. Under the law existing down to the date of the budget resolution such gifts were exempt from duty as the property on which estate duty would otherwise be charged ceased to exist before date of death. Payment by Trustees Section 30 of the Finance Act, 1941, was enacted to prevent tax avoidance by the termination of trusts prior to the death on which they would normally have ceased. The section provides that, where the life tenant of settled property disposes of his interest three years or less before his death, the property remains liable to estate duty. The trustees of settled property are responsible for the payment of estate duty but in the case of settlements termin ated in circumstances giving rise to a claim under section 30 of the Finance Act, 1941, some doubt exists as to whether the last trustees are responsible for payment of duty on foot of such a claim. The law is being changed to remove this doubt.

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Wilts sict, 1037— K.eliej

The general rule under the Wills Act, 1837, is