VALUATION OF ESTATE

Dominion, Volume 31, Issue 283, 26 August 1938, Page 15

VALUATION OF ESTATE

Mortgage Adjusted After Death Of Testatrix ASSESSMENT FOR DUTIES By Telegraph —Press Association. Christchurch, August 25. The valuation of part of an estate for purposes of taxation for death duties in accordance with a mortgage reduction made by the Mortgage Adjustment Commission after the death of the testatrix, was allowed by Mr. Justice Nortlrcroft in the Supreme Court in a decision on a ease heard on Wednesday; Appellants in the case were Richard Bolnin Cotton aud Rita Viola Leslie, administrators of the estate of Elizabeth Richards, who died on November 6, 1936, and respondent was the Commissioner of Stamp duties. The judgment stated that among the assets of the estate was a second mortgage owing to the testatrix to secure £17,840 on which interest had accrued amounting to £3096/7/4. Respondent In assessing for death: duties had valued the mortgage and interest at £20,019/2/5, the amount which he expected would be fixed by the Adjustment Commission. At a later date respondent offered as a compromise to accept the valuation at the principal sum of £17,840 and to eliminate the amount of accrued interest. Neither of these valuations was acceptable to appellants, who claimed that the asset could not be of greater value than the sum at which: it should be adjusted. “In the meantime and before the stamp accounts were filed,states the judgment, “the mortgagor had made application under the Mortgagor and Lessees’ Rehabilitation Act, and as a result the Adjustment Commission eventually adjusted the indebtedness of the mortgagor to appellants as at the date of death at £14,649/17/1. Appellants claim, therefore, that this figure represents the actual value of the mortgage at the date of death. “Respondent resists this view on the ground that by section 71 of the Deatli Duties Act, 1921, the value of the mortgage is to be ascertained by him in such manner as he thinks fit. He claims that, in valuing the mortgage as at date of death, he was not required to do more than to take into account and consider the possible effect- upon the value of the mortgage of the future report of the Adjustment Commission.”

After referring to legal precedents quoted by counsel, the judgment concludes: “The question for determination is as to whether the mortgage debt was properly valued by respondent at £20,019/2/5 or at £17,840, and if not, what was the correct valuation. I am of opinion that neither of these figures was the correct valuation of the mortgage, but that its true value was the sum fixed by the Adjustment Commission, namely, £14,649/17/1.