PENAL DUTY

Timaru Herald, Volume CLI, Issue 22215, 7 March 1942, Page 6

PENAL DUTY

Large Claim Against Estate GIFTS MADE TO WIFE <P.A.) AUCKLAND. March 5. A claim by the Commissioner of ?tamp °uties for £1612 gift duty, and £BO6 penal duty from the trustees and executors in the estate of the late Frederick S. Potter was heard before Mr Justice Callan in the Supreme Court to-day. Mr Meredith, tor the Crown, said the action had been brought because there were residuary beneficiaries, the Whangarei and Auckland Hospital Boards and it was felt that a settlement should be made subject to a decourt. He added that Mr Potter was a wealthy man who gave largely to charities. The claim was made in respect of five transactions alleged to be gifts to his w 4 e .- They were two lots of £5OOO paid to his wife in June. 1922 £lOO2 in February, Joogh £40 2? ln May- 1923. and £2250 in December, 1924. These sums were paid to his wife, and were secured at the time by promissory notes payable on demand. The promisory notes became statute-barred on the expiry of Mr Potter died in March. fche estate was then valued at £11.600. of which only £5OO was left the widow. . The Crown claimed that as £17,250 had been given to the widow previouslv. it was subject to gift duty, and that the promissory notes were a cloak for evading gift duty. Leonard G. Tuck, assistant commissioner of stamps, said that, allowin’? for payment of the amounts now claimed, the official balance of the estate was £9334. After witness had been crossexamined, Mr W. S. Spence, for the executors, said he could see no escape from payment of gift dutv. He felt that the money had been paid as a ' ift. /Ut a rl s ? that it had not been shown hat Potter knew he was under obligation to file a statement and pavment of gift duty. Conseauently he contested the claim for penal duty. Decision was reserved.