This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
Duty payable on the succession on death of joint tenant.
As to trust estates vested in trustees apparently as absolute owners.
(m) See Customs and Inl. Eev. Act, 1889, s. 12 (2). (n) S.-s. 3. (o) S. 52.
( p) Earl Howe v. Earl of Lichfield, (1867) 2 Ch. 155; 36 L. J. Ch. 313.
(q) S. 3.
The donee of a general power of appointment under a disposition taking effect upon the death of any person dying after the commencement of the Act is to be deemed entitled, at the time of his exercising such power, to the property or interest thereby appointed as a succession derived from the donor of the power; and the appointee under a limited power of appointment under such a disposition, who takes any property by the exercise of such a power, is to be deemed to take the same as a succession from the person creating the power as predecessor (r). The Act does not expressly provide how the succession of an appointee, under a general power of appointment, which has taken effect on a death happening after the commencement of the Act, is to be treated as derived ; but the Court of Exchequer has held, that in such a case the interest of the appointee is to be taken as derived from the donee of the power (s); and the correct view seems to be that the power takes effect within the meaning of the section from the date of the appointment under the power, and not from the date when the appointee under the power takes an estate in possession (t). The appointee under a general power of appointment contained in a British settlement, which is exercised by will, is liable to the duty notwithstanding the foreign domicile of the donee of the power (u) ; but succession duty is not in the first instance payable in respect of legacies given by the will of a person domiciled abroad (x) ; the distinction being, that in the former case the appointee takes by virtue of a settlement which must be governed by English law, while in the latter case the legatees derive their title solely under the foreign will (y).Where a foreigner domiciled abroad gave securities to trustees under trusts whereby he reserved only a life interest to himself, the intention being clear that the property was to be governed by English law, succession duty was held on his death to be payable thereon, though the securities themselves were for the most part foreign securities (z). Succession duty is payable on real estate in England devised by a testator having a foreign domicile (a).
On appointment under a general power.
(r) S. 4; see Re Lovelace, (1859) 4 D. & J. 340 ; 28 L. J. Ch. 489 ; He Wallop's Trust, (1864) 1 D. J. & S. 656; 33 L. J. Ch. 351 ; Charlton v. A.-G., (1879) 4 Ap. Ca. 427 ; 49 L. J. Ex. 86 ; A.-G. v. Mitchell, (1881) 6 Q. B. D. 548; 50 L. J. Q. B. 406.
(s) A.-G. v. Upton, (1866) L. E. 1 Ex. 224 ; 35 L. J. Ex. 138, and cases there cited ; cf. He Barker,
(1861) 7H.&N. 109 ; 30 L. J. Ex. 404 ; A.-G. v. Floyer, (1862) 9 H. L. C. 477; 31 L. J. Ex. 404.
(t) See notes to the s. in Hanson, 4th ed.
(u) Be Lovelace, sup. ; Re Wallop's Trust, sup.; Re Capdevtelle, (1864) 2 H. & C. 985 ; 33 L. J. Ex. 306 ; Re Badart's Trust, (1870) 10 Eq. 288; 39 L. . Ch. 645.
The interest of any successor in money to arise from the sale of real property (which includes leaseholds) (b), under any trust for the sale thereof, so far as the same is not chargeable under the Legacy Duty Acts (c), is to be deemed personal property chargeable with duty under the Act; but, if subject to any trust for the re-investment thereof in land, such money is to be deemed real property, and chargeable with duty as such (d).
In the case of settled property, the successor is not disqualified, by reason of the charge of duty on his succession, from exercising with the proper consent, or authorising by his consent, the exercise of any powers of sale, exchange, and partition, to which the property comprised in the succession is subject; but the successor's interest in the sale moneys or properties received in substitution or severalty becomes liable to the duty (o) ; and it has even been held that when an estate was settled subject to a jointure (the cessor of which would involve the payment of duty), and with the concurrence of the jointress was sold by the trustees of the settlement in exercise of a power of sale therein contained, the liability to succession duty was shifted from the land to the money; though the power of sale did not override, but was overridden by, the jointure (f) ; this decision, however, seems clearly incorrect (g).
Powers over settled estates not affected.
(x) Wallace v. A.-G., (1865) 1 Ch. 1; 35 L. J. Ch. 124 ; A.-G. v. Jewish Colonization Ass., 1901, 1KB. 123 ; 72 L. J. K. B. 101; see also A.-G. v. Campbell, (1872) L. R. 5 H. L. 524; 41 L. J. Ch. 611 ; see also A.-G. v. Littlcdale, ib. 290.
(y) See Hanson, 4th ed. 526 et seq.
(z) A.-G. v. Jewish Colonization Ass., 1901, 1 K. B. 123; 72 L. J. K. B. 101.
(a) Atkinson v. Anderson, (1882) 21 Ch. D. 100; 51 L. J. Ch. 452.
(b) See s. 1.
(c) In the case of persons dying on or after the 1st July, 1888, legacy duty-is not chargeable on legacies taking effect out of real estate or money to arise from the disposition thereof, but duty is chargeable as in respect of a succession to personalty; see Inland Rev. Act, 1888, s. 21 (2).
(d) Ss. 29, 30.
Duty is payable in respect of the increase of benefit arising from the determination or extinction of any charge, estate, or interest on or in land, which is determinable by the death of the chargee, or at any period ascertainable only by reference to that event (h).
On extinction of charges.
On a sale under the S. E. Act, 1877, the land becomes freed from succession duty, since the sale operates to revoke the uses of the settlement (i), and the duty is therefore shifted from the land to the purchase-money, or the investments representing it (k). And the principle seems to apply equally to a sale under the S. L. Acts (/); hence, a purchaser under these Acts takes the land free from all liability to succession duty.