GIFT DUTY CLAIM

Auckland Star, Volume LXXIII, Issue 66, 19 March 1942, Page 8

GIFT DUTY CLAIM

PENALTY DISALLOWED

WIFE'S PROMISSORY NOTES

Judgment in the action by the | Commissioner of Stamp Duties to I recover from, the estate of the late I Frederick Seymour Potter the sum [of £1612 as gift du'.y and of £.806 as penal gift duty has been delivered by Mr. Justice Callan. His Honor gave judgment for ordinarv gift duty of the amount claimed, but not for the penal gift duty claimed. The claims were made in respect to sums amounting to £17,250 paid by Mr. Potter to his wife in the vears 1928, 1925) and 1930, for which he accepted from her promissorv notes for payment on demand. Out of these moneys investments were made in the name of the wife. The commissioner held that the moneys were gifts and not loans and that the promissory notes were used to evade payment of gift duty at the time. His Honor held' that, the monev paid was subject to gift dutv. hut he thought it. was not established that the promissory notes were mere cloaks for the evasion of gift' dutv. Mr. Potter may have felt, said his Honor, that if he put the capital completely and finallv in his wife's control he might make her inconveniently independent of him. It might well be that the promissory notes were intended to serve as a real protection of the husband against the wife. But. as the promissory notes became statutebarred at the. end of six vears, it followed, whether Mr. Potter knew it or not. that six years after the date of each promissorv note a gift came into existence. His Honor was not satisfied that Mr. Potter suspected this or had intent, to evade payment of gift duty. The claim for' penal gift dutv was therefore rejected. Mr. V. R. Meredith argued the case for the Crown and Mr. W. S Spence for defendants.