ART GALLERY AND MUSEUM

Dominion, Volume 21, Issue 194, 18 May 1928, Page 10

ART GALLERY AND MUSEUM

ARE GIFTS LIABLE TO DUTY? CITY SOLICITOR SAYS “NO” The question has been raised as to whether any of the large donations that are now being made to the Dominion Museum National Art. Gallery Fund are likely to be charged with gift duty within a given, period of the date of the gift. The matter was referred by the .Mayor (Mr. G. A. Troup) to the city solicitor (Mr. J. O’Shea), who has given a very interesting.opinion on the point raised, the effect of which is that such gifts will not be liable to duty.

The opinion of (he city solicitor reads as follows: —

“1. This matter is governed by the provisions of paragraph (b), subsection (1), of Section of the Death Duties Act, 1921, and of section 11 of the Finance. Act, 1923. These sections read as follow: —

"1921 5 (1) In computing for the purposes of this Act the final balance of the estate of a deceased person his estate shall be deemed to include and consist of the following classes of property “(b) Any property comprised in any gift within the meaning of part IV of this Act made by the deceased within three years before his death and whether.before or after the commencement, of this Act, if the property was situated in New Zealand at the time of the gift” Section 11 of the Finance Act, 1923, reads as follows: —

“11 (1) Notwithstanding anything to the contrary in paragraph (b) of subsection one of section five of the Death Duties Act, 1921, the property comprised in any gift which is exempt from gift duty on, the ground that it creates or is in aid of a charitable trust shall not be included in the final balance of the estate of the donor notwithstanding that he may die within three years after having made the gift. “(2) This section shall apply with respect to gifts made before or after the passing of this Act by any person who shall die after the passing of. this Act.”

“2, It is necessary to refer also to section 2, subsection (1), paragraph (fi) of the Death Duties Amendment Act, 1923, which reads as follows:— “Notwithstanding anything to the contrary in the principal Act, no gift duty shall be payable in respect of any of the following matters, namely: (a) The creation of any charitable trust in New Zealand or the gift of any property in aid of any such charitable trust.”,’

“3. In my opinion, gifts to the Museum and Art Gallery fund are gifts in aid of a. charitable trust, and that the creation of a museum and art gallery is the creation of a charity, and that such an institution is a charitable trust.

“4. The definition of ‘charitable trust’ is the same in New Zealand as in England. This is clear from the decisions in (two cases quoted).

“5. This purpose comprises all the tests of 1 a charity. It is of a. public nature, and it is, in my opinion, for an educational purpose. The Museum and Art Gallery are instituted for the same purpose, the education and enlightenment of the public. It has been specially held that public libraries and museums are’charities.

“6. The original definition of ‘charity’ was ‘a gift to a general public use which extends to the poor as well as to the rich.’ Generally speaking, any purpose beneficial to the community is a charity. “It can, therefore, be stated, in m!y opinion, without any fear of contradiction, that (1) these gifts are not liable to death duty, and (2) that they do not form part of a deceased estate for the purpose of assessing death duties.”