Evening Post. THURSDAY, APRIL 7, 1910.

Evening Post, Volume LXXIX, Issue 81, 7 April 1910, Page 6

Evening Post. THURSDAY, APRIL 7, 1910.

"A GOVERNMENT SCANDAL"? » The belief that the Death Dutie? Act of last session has relieved mall estates at the expense of Ihe large ones should bo effectually shattered by the letter which Mr. A. N. Barclay, ex-M.P., has contributed to the Otago Daily Times lundcr tho somewhat extravagant title of "A Government Scandal." An old man recently died in Roetyn, leaving property I of tho gross value of £92, which, after ihe payment ot medical and funeral ' expense* and other debt*, was reduced j to £78 14s 6d. Being under the value |of £500, the estate was exempt from estate duty;* but as nil the property went to strangers, succession duty wan payable at tho maximum rate of 10 per cent. Tho sum ot £7 17» 5d was accordingly levied, by Uie department, tagainit which Mr. Barclay appear* to suggest a grievance, though it really had Tio option in the- matter. As the costs *nd expenses of administration amounted to £11, and the enclosure of the grave «nd the erection of a stone, for which the testator na<L given express directions in his will, came to another £10, the <net balance of the estate available for distribution among the legatees was less | than £50, and therefore insufficient to satisfy the fora- small legacies, totalling £55, which Had boen bequeathed (o them. Mi. .Barclay dwell* upon the kindly services* to a. needy man for which ] Uiom btquasH weie intended as «om« •Bib ol rte«fm*iM«; but olmoialt- Ihft,

merits of these services, though calcuJated to stir the sentiment of a jury, cannot justly be invoked in disparagement of the la.w. If the recompensing of these kind friends had been treated ab the satisfaction of a debt, the legacies would not have been dutiable under the present Act any more than under the previous one. But being left on the footing of gifts, they had to pay duty in just the same way as any gift to (stronger* wthich was not technically charitable. The law makec no distinction between one class of strangers and another, and we do not see how it could. A* to the £10 which the testator directed to be spent on the adornment of his grave, the department bat simply continued the previous practice' of excluding such a payment from the computation of funeral expenses, and held it liable to duty as before. The only change in the basis of assessing the net value of the estate that we can discover is that no allowance appears to have been made in this case for the costs of proving the will, which were formerly treated as a debt of the deceased. The section of the new Act which treats "the reasonable expenses of the funeral" as a debt but excludes "tho expenses of the administration" — costs, by the way, not being expressly mentioned — would seem to iustify this change. If so, however, the Crown has certainly stolon a march upon the taxpayci, who was never warned of this enlargement of the taxable amount. The substantial hardship of the present case arises from the estate being of almost a minimum value and yet becoming liable for a maximum of succession duty. Yet even here- our sympathies may be entrapped by the fallacy of personifying the estate instead of considering the legatees. Up to £600 the estate as such is exempt from duty ; but the legatee pays on what he takes a duty which varies with his relationship to the deceased, and not with the value of the estate, and the principle seems to bo found and reasonable. Why should a legatee pay less upon a gift of £10 from a poor testator than upon a gift of tho same value from a rich one? It is tho recipient who pays tho tax, and his payment is properly apportioned to tho benefit which he receives. "A tax on windfalls," says Dr. Findlay, "is not usually resented ;" nor would there have been any resentment here but from the vague idea that the tax was being levied upon a destitute testator or his dependents and not upon strangers, for whose needs or merits it would be impossible for the law to make allowance by any sliding scale of duties. The critics of the Act should propound their amendments before attacking it further, and we believe that they will find more genuine hardship in the case of the dependents ot testators whose estates are just over the exemption line than in that of the stranger who has to pay a uniform ten per cent upon his windfall.