(On Appeal from the Court of Appeal in England.)
Subject_Revenue — Estate Duty — Policy of Life Insurance — Interest Provided by Deceased — Finance Act 1894 (57 and 58 Vict. cap. 30), sec. 2 (1) ( d).
A father, equitable tenant for life of an estate, had raised sums amounting to £59,121 on the security of his life estate and of certain policies of insurance on his life. By agreement with his son, equitable tenant in tail in remainder, the estate was disentailed and £71,000 raised on mortgage of the fee, out of which the mortgages for £59,121 were paid off. Under the same agreement the policies, having been reassigned to the tenant for life, were assigned by him to his son, and the estate was re-settled upon trust, inter alia, out of the rents and profits to pay the interest on the mortgage debt of £71,000 and the premiums necessary for the policies, but in the event of any of the policies being surrendered by the son, then to pay the amount that would otherwise have been payable as a premium to the son, and to apply the residue of the rents and profits in paying to the son the sum of £1000 a-year, and, subject to the trusts already mentioned, in trust for the tenant for life with remainder on his death to his son in fee. Subsequently, in consideration of the sum of £4100, the tenant for life assigned his life estate to the son, subject, however, to the trust for keeping on foot the policies, and the amount of the price paid to the tenant for life was calculated on the footing that the life estate was subject to that trust. The policies were kept up under the before-mentioned trust, and on the death of the tenant for life the son received the sums due under the policies.
Held ( reversing the judgment of the Court of Appeal) that, as the son had given full value for the policies, they were not “provided” by the father within the meaning of section 2 (1) ( d) of the Finance Act 1894, and that consequently no estate duty was payable on the father's death in respect of the moneys received under them.
Appeal from a judgment of the Court of Appeal ( Collins, M.R., Mathew and Cozens-Hardy, L.JJ.), who had reversed a judgment of Phillimore, J., upon an information claiming estate duty under the Finance Act 1894, sections 1 and 2 (1) ( c) and 2 (1) ( d).
Phillimore, J., gave judgment for the defendant.
The facts of the case sufficiently appear from the rubric and the judgments of their Lordships.
The Finance Act 1894, section 2 (1) ( d), provides as follows:—“Property passing on the death of the deceased shall be deemed to include … ( d) any annuity or other interest purchased or provided by the deceased, either by himself alone or in concert or by arrangement with any other person, to the extent of the beneficial interest accruing or arising by survivorship or otherwise on the death of the deceased.”
Judgment appealed from reversed.
Counsel for the Appellant— Lush, K.C.— Terrell. Agents— Toulmin & Chitty, Solicitors.
Counsel for the Respondent—The Attorney-General (Sir J. Lawson Walton, K.C.)— Sir R. Finlay, K.C.— Vaughan Hawkins. Agent— Sir F. C. Gore, Solicitor of Inland Revenue.