LAW ON DEATH DUTIES NOW SETTLED

Chronicle (Levin), 16 December 1947, Page 5

LAW ON DEATH DUTIES NOW SETTLED

WELLINGTON, Dec. 15. The Court o±' _ Appeal in New Zealand consist of two divisions, eom})rising all the periuanent dudges of the Supreme Court, bul it is rare for botli divisions to sil togcther. The ease luis to be oue of major public importance before this will be done. For u 11 those who have made a will. or intend to make a will, the rccent deeision of the majority of botli divisions of the Court of Appeal as to th giving of directions relating to payment of death dutv contained in the will of the late WiHiam Evinson Bay ner, of ^Masterton, is oue of far-reach-ing importance. When a person dies the wliole of his estate beeoines liable to death duty, wliieh means botli estate and succession duty. For the purpose of assessment oi duty sueli estate may inelude inore tlian the property or other assets wliieh the deceased person owned or which, like life iiisurance policies, become payable at the tiine of his death. B'nder the Death Duties Act certain other property niay be included also, notwithstandiug that the deceased person did not own them at the time of his death. . This property is cominonly kmr.vn us notional estate to distinguish it from the aetual estate. The best known e.xanqde of this is gifts made Vvithin tluee years of the date qi;. death, but- there are many others. The legal position i» that unless a teslator direcis otherwise in his will, eaeh part of his estate beeomes liable for the estate duty assessable thereon and eaeh suecessor liable for the succession duty on his or her share. This state of alfairs is avoided as a norinal rule by a directiou in the will that the estate pay all the duty, leaving the net balanee available for distribu tion. The dilficulty that has arisen l'requently, however, in the case of those persons wkose estate, for the purposes of assessment of duty, includes a notional estate, is whether the^'direetion in tlie will indicates an inrention, on the part of the teslator that l'roni the estate which he owned at the time of the death should be paid all duty of every description, or only that duty which is assessable 011 the actual j estate. | Tlie deeision of the Court of Appeal ] has now deeided linally for New Zea ' land that unless a directiou in a will relating to paynient of duty clearly indicates any notional estate, theii the dutv which is pavable from the deceased person 's estate is limited to that assessed on the estate of wliieh lie actually died possessed, leaving it..faiy those who own the notional estate to pay, as they must", the duty assessed 011 that estate. This is sometliing wliieh tlie average nian may well overlook. In arriving at this deeision the two divisions luive overruled a deeision of oue division only on a somewhat similar case deeided in 11)45. They have at ouce settled the law in New Zealand and indieated how our Courts will always endeavour to eorreet any previous deeision wliieh is erroneous. At the hoariug of the Bayner ease the eombined Courts of Ap|ieal eom prised Mr. Jnstiee Blair, Mr. .Itistice Smith, Mr. .Tustice Kenuedy, Mr. Justice Fair, Alr Justiee Callan, Mr. Justiee Finlay, and Mr Justiee Cornisli. The appellant, Harold .Tohn Bayner, was represented by Mr. II. Ii. Biss, the trustees bv- Mr. J. ,L Garbett, the residuary benefieiaries by Mr. E. D. Blundell, the vvidow by TJr. W. G. Bmith, and the Galvation Army bv Mr. II. B. C. Wild. ' ' "