WHERE DYING IS DEAR.

Auckland Star, Volume LXIII, Issue 123, 26 May 1932, Page 9

WHERE DYING IS DEAR.

BRITAIN'S HARSH IMPOSTS. RUINOUS TO BIG FORTUNES. LITTLE HOPE FOR SURVIVORS. (By a Special Correspondent) LONDON, April 20. A bitter humorist has said that the principal reason for the greater longevity of Englishmen of the present generation is the increased cost of dying in England. The English State levies annually some £80,000,000, or about, one-tenth its total revenue, on property changing hands in consequence of death. In case of great fortunes it takes well over half, and no one possessing more than £100 can die without paying something for the privilege. The inheritance taxes, or death duties, aro three. First in importance is the estate duty, levied upon all forms of property on the death of its owner. Last year this duty brought in £74,000,000. The estate duty was established in 1594 by the Chancellor of the Exchequer, Sir William Harcourt, who was charged by his opponents with having added another sting to death. He conceived the duty on a relatively modest scale. i Very small estates paid one per cent.' Modest fortunes up to £10,000 paid 3 per cent. Even the greatest fortunes were taxed only to the extent of S per cent. Now 1 per cent is charged on estates over £100, and the rates rise steeply to 50 per cent on a fortune of £2.000,000. On £20,000, 8 per cent is paid, on £100,000 20 per cent, on f 200,000 24 per cent. Estates of £300,000 pay 30 per cent. With £1,000,000 40 per cent is reached. The maximum, 50 per cent, is charged on estates of £2,000,000 and upward. Additional to estate duty are succession and legacy duties. These are inheritance taxes in the purest sense, as the heir pays them for the privilege of inheriting. They vary from 1 to 10 per cent of the estate, the lowest rate being paid by wives or husbands, children or

grandchildren, or parents of the person dying. Brothers and sisters pay 5 per cent on their inheritance and the maximum, 10 per cent, is levied on more distant relatives and strangers in blood. It will be seen that on a fortune of £2,000,000" or more, • the Government takes in estate, legacy and succession duties over 50 per cent. Legacy and succession duties bring in annually about £9,000,000. The amount collected in 1931 was £9,400,000. Revenues From Death. The revenue from the combined inheritance taxes for 1930-31 £83,100,000. The revenue for the present year from these taxes will probably show a decrease, owing to the fall in value of land, houses and other kinds of property. In the past ten years the amount collected has increased year by year in consequence of frequent sealing up of the rates of estate duty by successive Chancellors of the Exchequer. The machinery of collection works smoothly, and the Inland Revenue Department officials are satisfied that evasion rarely, if ever, occurs. This, as they explain, is partly because the Englishman is by nature a tax paying animal. He grumbles, but he pays. Another factor which makes for full payment, and indeed makes evasion almost impossible, is the exact knowledge the income tax authorities possess of all salaries and incomes over £140 a year, and of the property, businesses, investments and other sources from which incomes are drawn. All wills must be passed for probate by the Probate Court and registered. Before this can be done the death duties must be settled, and no legacy can be paid without agreement of the revenue authorities. In eases where, as happens generally in succession to large landed estates, it is necessary to sell part of the property to pay the taxes, time is allowed to enable the executors to carry out necessary transactions. The incidence of these taxes, as both taxed and tax collectors agree, is harsh and unfair. Here is an example. For income tax assessment, the incomes of husband and wife living together in England are deemed one income. That may sound romantic, but the authorities have their eye on the higher scale on which large incomes pay tax. An income of two thousand pounds pays more taXj than two separate incomes of one thou-j sand pounds each. '

Bearing in mind that the incomes of husband and wife are one, it might I>e reasonable to think that no death duties were payable by the survivor on estate left by a husband or wife. That is not so. A wife inheriting her husband's estate, on which single income tax has hitherto been paid, has to pay death duties and either succession or legacy duties, as the case may be. The Inland Revenue Department cheerfully agrees that the situation is illogical, but, it says, money must be raised. It is generally recognised that no fortune can survive three payments of death duties unless it is renewed by fresh wealth. This is particularly true of landed estates. Where land is the main source of income, death duties spell ruin. They account for the frequent sales of pictures, libraries and jewels from the great country houses. The sale in New York of the Marquis of Lothian's precious early English, manuscripts is a case in point. Another sign of the times 5s the fact that in several cases the heirs to famous titles and magnificent mansions are building themselves "cottages," email houses on their estates in which they mean to live permanently, because they know that when they inherit and have paid the death duties they will not be able to live in the ancestral hall. Among these is the Marquis of Titehfield, heir to the Duke of Portland. During the war, when death reaped a terrible harvest among the younger men of the propertied classes, a special Act was passed remitting, for the duration of the war, the harsh provisions of the inheritance taxes as applied to men dying on active service. Estates of £5000 were left untaxed, and in larp fortunes the amounts payable were dis counted according to the Government's tables of mortality for life annuitant*. for the period the man might have expected to live under ordinary conditions This amounted to a very sensible decrease. It is curious that there is ] ' lttl ! ference of opinion in most cases '"J;"*;,,, tho inland revenue officials and {overt? heritors regarding the ™lue <>£ £ ' rh " to be taxed for death «« tima ,to official Valuation ]iif!bo , is.on an average about .>P , loy ed by than that of the v«Hie «. The htgher the executors of o{ ct >ursc the valuation *■• ft ami nn. only remedy being tiie m tI)Q