DEATH DUTIES

Evening Post, Volume CXII, Issue 3, 3 July 1926, Page 11

DEATH DUTIES

THEIR SCOPE AND SEVERITY

DISCUSSED IN PARLIAMENT,

The -. Death;. Duties Amendment Bill was read a second time in the House of Representatives last evening. Members took advantags of the opportunity of discussing various points in regard to death duties generally. The Minister of finance (the Hon. "YV. D. Stewart), in explaining the nature of.the Bill, said that it provided for the reduction o£ penalty in event of late payment of death duties, and for the extension of time within which a refund might be made of duty paid in excess. At. present the penalty stood at 10 per cent., but as a result of representations which had been made on account of certain cases of hardship, it had been agreed to reduce it to five per cent. Tho extension-of-time clause was inserted to comply with the principle acted upon at present. Sir John Luke (Wellington North) asked if provision could be made in the Bill whereby firms and persons affected by death duties could be allowed a "rest" period before they paid the duties, provided they paid the interest oh the amount. Sir Joseph Ward (Invercargill) suggested that the Minister might consider inserting a clause to enable beneficiaries in an estate to devote insurance money to.'the(payment of death duties, without adding the amount of tho insurance to the value of the estate. This, suggested Sir Joseph, would not result in any serious loss of revenue, an \ it would be a great relief to the beneficiaries, whom the Act should protect. Attention was called by Mr. W. S. Glenn . (Rangitikei) to the hardship which was likely to result when two beneficiaries of an estate died. Mr. P. leaser .(Wellington Central) expressed the view that the present Act made all the necessary provision for dealing with cases of .hardship. He also doubted whether it was right to throw the onus" of- making refunds of excess duty on the beneficiaries. A COMMISSION SUGGESTED. Mr. IV F. >Hockley (Rotorua) suggested that the .Government should appoint a Commission to inquire into certain cases of 'Hardship. Exemption of bequests for' public purposes from payment of death duties was urged ,by. Mr. G. W. Forbes (Hurunoi). He thought that the principle, ought.to-be inserted in the Bill.

The -Minister of . Justice (the Hon. F. J. Rolieston) said that the reduction of the penalty was decided upon to meet' the'case of' taxpayers who through inadvertence had not applied for an extension of time. It was not very often that there were overpayments of death duty. Referring to the exemption of insurance, tho Minister stated that at present exemptions were granted up' to £1000, and he was sure the Minister of Finance would take further exemptions into consideration. The question of exempting public bequests had been raised very often, and at tho present time there were certain exemptions.

Forbes: "Very small."

The Leader of the Opposition (Mr. H. B. Holland) suggested that the action of tho Government in collecting death duties really amounted to a tax on capital. lii other. words, it was confiscation, a .policy to.which tho Government was ,supposed to bo opposed. He said he was not arguing against that policy, but-was merely .pointing out tho falsity- .of the Government's position. Mr. suggested that the present death duties' on estates .'of over £10,000 were not sufficient. :

Mr. H. Atmoro (Nelson) made reference to the fact that of the amount of £240,000 left for the establishment of tho Oawthron Institute, the Government had taken £40,p00 for the purpose of death duties, despite the fact that that money had been given to tho Dominion as a whole.

• Replying to the discussion, the Minister said he shared Mr. Holland's contention, .that death duties, should be high, but the duties in New Zealand were already high. Indeed, as compared with England and other countries, they were very, very high. Tho Minister reminded the Leader of the Opposition that there was such a thing as a succession duty, which, in the case of remote relationship, went as high as twenty per cent. There was another side to the case which had been stated on behalf of public bequests, and the Minister expressed the view that it was only fair that public institutions should pay a certain amount to the State.

The Bill was read a second time.