DEATH DUTIES, 1894 115 



The annual proceeds of the new Death Duties were estimated 

 by the Chancellor of the Exchequer to be 13,050.000, being 

 an increase of 1,350,000 on realty and 2,090,000 on personalty. 

 This increases the payment of personalty by 24 per cent, and of 

 realty by 117 per cent. 



The effect of these increased duties will fall with especial 

 severity on agricultural land. The large proportion of the gross 

 rental amounting frequently to from 20 to 30 per cent. 

 which is required for outgoings necessary for the mere " up -keep " 

 of an estate, renders entirely impossible any equality in the 

 ability of owners of realty and personalty respectively to pay 

 an amount which may be arithmetically the same. 



As an illustration, the case may be taken of a settled agri- 

 cultural estate with a rent roll of 5000. There would be deducted 

 from this the allowances under the Succession Duty Act, 1853, 

 which are " all necessary outgoings," and a further amount 

 not exceeding 5 per cent, of the annual value (Sec. 7 of Finance 

 Act) for expenses of management. In the absence of any other 

 basis as to the allowance which will be made for " all necessary 

 outgoings," it may be assumed for purposes of calculation that 

 the deduction will be the very insufficient sum of one-eighth, 

 as provided (Sec. 35) for assessing the annual value under 

 Schedule A of the Income Tax. 



The annual value for the purpose of valuation for Death Duty 

 would therefore be under the Act 4125, and it is provided that 

 the principal value is not to exceed twenty -five times this amount 

 (Sec. 7). Assuming the principal value to be assessed on this 

 basis, it would amount to 103,125, exclusive of the furniture 

 or other personal property of the late owner. This would subject 

 the successor to the estate to a Death Duty at the rate of 7 per 

 cent. (6 per cent. Estate Duty and 1 per cent. Settlement Estate 

 Duty), or a sum of 7217, an amount which, with other necessary 

 expenses consequent on his succession to the property, would 

 swallow up more than the whole of two years' income. It is 

 true that payment may be spread over eight years, but as 3 per 

 cent, has to be paid on the amount left unpaid after the first 

 instalment, the total payment would be increased to nearly 

 8000, while more than 25 per cent, of the annual income of the 

 successor would for eight years be devoted to defraying the duty. 



It must be evident that so serious a drain on the income of 

 the successor to an estate must for a considerable period materially 

 affect his ability to carry out improvements for his tenants, to 

 employ labour, and to give financial support to deserving objects 

 in his locality. 



The real effect of the new Death Duties will not be to equalise 

 their incidence upon realty and personalty, the difference in the 

 nature of the two classes of property preventing a similar charge 

 from bearing equally upon each. But assuming that it was true 

 that realty and personalty will for the future bear an equal 

 proportion of Imperial taxation, the claim for a complete adjust- 



