HIGH DEATH DUTIES

Taranaki Daily News, 8 November 1932, Page 6

HIGH DEATH DUTIES

ESTATE AND SUCCESSION FACTORS OF RELATIONSHIP. SEVERAL SCALES PROVIDED. The substantial total of taxation of over £lOO,OOO that will go to the Government in the form of death duties on the £260,000 estate of the late Mr. George McCaul, is an example of the heavy impost that can be levied in some circumstances. After, an initial exemption of £lOOO of estate, two distinct duties are involved, estate duty and succession duty, certain exemptions being provided also from the latter tax. A further' duty also .is payable in the case of absentee beneficiaries.

The Death Duties Act, 1921, provides first of all for a sliding scale ot duties governed by the size of the estate. The schedule sets out that where the balance of the estate —that is, the value after all debts have been paid —exceeds £lOOO but not £2OOO, the estate duty shall be at the rate of .1 per cent, of that balance.

The scale rises progressively until, where the balance exceeds £90,000 but not £lOO,OOO, a duty of 19 per cent, shall be paid. It was further provided that where ‘the balance of the estate exceeded £lOO,OOO the duty should be at the rate of 20 per cent., but this last item was amended by the Finance Act, 1930. The position now is that in respect of a final balance of £lOO,OOO the duty shall be at the rate of 20 per cent, and in respect of the amount by which the balance exceeds £lOO,OOO at the rate of 30 per cent. A SLIDING SCALE.’ The foregoing relates only to the estate duty payable. In addition to this is imposed, with certain exemptions, a sliding scale of succession duties. These duties are governed by the relationship which the beneficiary bears to the deceased, and ■ the scale varies according, not to the size of the estate, but to the size of the interest which the beneficiary acquires. Where there is only one beneficiary 'the balance of the estate and the succession are, of course, the same, the difference occurring only when there are two or more beneficiaries.

If a wife, as is the common case, succeeds to her husband’s estate, she does not pay succession duty if the value of her succession is not greater than £lO,000. If her inheritance does exceed this amount but is not greater than £20,000, she pays, in addition to estate duty, a succession duty at the rate of 2 per eent. For sums over £20,000 the succession duty is at 4 per cent. A husband was succeeds to his wife’s estate is granted an exemption from succession duty only if his succession does not exceed £5OO. The scale of succission duty in his case rise from 1 per cent, on sums from £5OO to £l5OO to 3 per cent, on sums ‘in excess off £2500. Children, grandchilden and other lineal descendants are granted an exemption from this duty if they inherit a sum not greater than £lOOO, but the scale in their case provides up to a miximum of 4 per cent, where their interest exceeds £20,000. FURTHER SCALES PROVIDED. A relative of not more than fourth degree, which embraces nephews and uieces, does not pay succession tax if he inherits only £5OO, but for amounts above this figure the scale rises , until, where more than £lO,OOO is inherited, a succession duty of 10 per cent, is payable. In all other cases succession duty is payable on sums exceeding £5OO, the highest tax in this scale being one of 20 per cent, where the inheritance exceeds In addition to the rates of succession duty as set out, a succession duty of 10 per cent, is imposed on all money exceeding £lOOO payable to any person domiciled out of New Zealand who is not a wife, husband or relative of deceased within the third degree.