The Solicitors' Journal - March 21, 1896

The property consisted of money settled on trust to be laid out in the purchase of land, and was treated in the judgment as if it were land. The tenant for life died after the Act came into operation; but it was not his property, and his executors had not to pay duty upon it: see section 6, sub-section 2. By section 6, sub-section 4 of the Act, "estate duty, so far as not paid by the executor, shall be collected upon an account," deliverable by "the person accountable for the duty," and that person, as appears from section 8, sub-section 4, is first the beneficiary, secondly the trustee, and thirdly every alienee or derivative holder.

The enactments referred to belong to the group of sections headed "Collection and Recovery of Duty and Value of Property," and do not seem to be concerned with the question how the burden of the duty is to be borne as between beneficiaries. The only express provision on this subject is section 14, sub-section 1 of which is as follows: "In the case of property which does not pass to the executor as such, an amount equal to the proper rateable part of the estate duty" may be recovered by the person who has had to pay the duty "from the person entitled to any sum charged on such property."

This section "contemplates that in all cases coming within it, if the executor or person who has to pay the duty… has paid the duty before handing over a share or sum of money, then he may charge against the person to whom he is handing over the money, or recover from him, if necessary, the amount required for the duty" (per North, J., 1896, 1 Ch. D. 262), but the section, it seems, only applies to cases where the property does not pass to the executor as such, and the beneficiary has a charge on the property. Re Bourne (41 W. R. 70, 1893, 1 Ch. D. 186), where the contest was between specific and residuary legatees of a testator's own estate, as to the incidence of the probate and estate duties then payable, was pressed upon the court as shewing that the estate duty ought to be wholly borne by the residue of the appointed property on the analogy of probate duty, but North, J., thought otherwise.

"The present case," said his lordship, "is quite different… It is a case of property passing under limitations with which the person dying has nothing to do, except that his death sets the property free - which passes under those limitations to persons who take what is at the present time in equity landed estate; with respect to which there is no probate duty existing at all, and never was.

Now, that being so, I must look at the provisions of this Act itself, and say upon whom the estate duty payable in respect of real estate is to fall; and it seems to me that… it is intended it shall fall upon the beneficiary, and not upon anyone else; and on the beneficiary or beneficiaries, as the case may be, according to their respective interests" (1896; 1 Ch. 263).

This appears to be a clear expression of judicial opinion as to the ultimate liability of all real estate to bear a rateable part of the new estate duty without any right to relief at the expense of other property, though it may be said to be no more than a dictum as regards real estate devised by the person on whose death the property passes.

North, J., held that the sum specifically appointed was a "sum charged" on the property within the meaning of section 14 of the Act, but thought that, independently of that section, the beneficiary must bear the estate duty payable in respect of that sum.