PUBLIC BEQUESTS.

Dominion, Volume 6, Issue 1556, 27 September 1912, Page 7

PUBLIC BEQUESTS.

o PROPOSED- REMISSION OF DUTYCAMPBELL AND MACARTHY ESTATES. DISCUSSION IN PARLIAMENT. In the llouso of Representatives yesterday afternoon Mr. 11. J. 11. Okey (chairman of (lie M lo '/, Volitions Committee) presented a. report on (lie petitions for remissions of death duly 011 tlio charity bequests of tlio Into Sir John Logan Campbell, of Auckland, and tlio lute Mr. T. G. Macarlhy, of "Wellington. The effect of tlio comniittce's recommendation was that as a question of public policy nas involved, the committee did not care to make a recommendation, but referred tlio matter lo the Government ( for careful consideration. Sir Joseph Ward (Awarua) said the time [ was on opportune one for tho Prime Minister to state tho Government's views > about- remissions of duty 011 bequests to charity or other public purposes. This might encourage wealthy peuplo to leave money to charity, and tho State would l thereby bo saved heavy expenditure. Mr. W. C. Buchanan (Wairarapa) . thought the Prime Minister should also take into consideration the remission Of gift duties nml not only death duties on ' properties given to charity. Mr. A. S. Malcolm (Clutha) said lie was [ opposed to the remission of duties of any , sort. These duties 011 charitable' bequests were properly receivable by the State, for huge fortunes were amassed because tho Stato threw over tho owners of them the protection of law and order. He did not believo that wealthy men needed encouragement to leave money to charity, and 110 good result would foilowl from the remission ot duties. His own 'belief was that tho wisest course a testator could follow was to leave his money to tho State, the best and most general dispenser of charity, instead ol 1 leaving it to a specified charity. Labour Support. Mr. .T. Payne (Grey Lynn) supported the remission of duties. Surely, ho said, a man leavings" loll1 ')' had a t ' C!ls t n right to say where that money should be used. Ho disapproved entirely of the proposal that money should bo left to Parliament "to play ducks and drakes with." A Noble Spirit. Mr. T. H. Dave.v (Christehurch East) said that as a member of the committee lie appreciated the.noble spirit which had actuated tho fminers of these (wo wills. Two finer wills had never been read. But he did not think that tho remission of duties w'Onld encourage bequests to ( charity. 11l tlio caso of Mr, Maearth.v's will, provision was made for the payment of duties out of .the estate, and tlio ell'ect of remitting the duties would bo to prosent a considerable sum of money to legatees who were strangers in blood to the testijtor. 11l view of this fact, that tho testator had contemplated and arranged for tho payment of death duties, lie did not think it would bo wise to remit the j duties. Objection to Sentiment. . Mr. L. M. Isitt (Christcliufch North) said the principle lying at tho root of death duties would be endangered by allowing sentimental reasons to interfere in individual eases. It was tlio absolute right of tho State to levy and collect death duties. Mr. G. Laurenson (Lyttelton) thought that rich men who had shown such a fine public spirit as had theso two men, set such n fine example lo the rest of the community that he thought it'was a fair proposition that tho State should forego tho taxes, ' The Hop. D. Buddo (Kaiapoi) advised that, if the Government considered tho ndvisabilty of remitting taxation 011 bequests or gifts to philanthropic objects. ' tho remission should be made general, and 1 that ii should not be made to np'dv only ; to the two cases under review. Mr. G. "U". Itussell (Avon) sympathised ■ entirely with the proposal that exemption ' from taxation should bo granted to gifts 1 lo charity, but he thought the oxoinptbn I should be made general, and should be , made by legislation. Mr. A. 31. Myers (Auckland East) urged ' tho I'l'imc Minister to make his decision, whatever it might be, general ih application. Bertiissioii of duty 011 the betiuesls ■ tinder review would benefit Auckland mid Wellington, but at any time Christchurch or Dunedin might similarly benefit. Mr'. H. Atmore (Nelson) said that the ■ death duties belonged to the people as ft whole and it wag parochial to suggest that thesd minis should bo remitted Statement by the Prime Minister, 'l'ho Hon. W. F. Mftssey said that the Government had not up to tho present had an opportunity of considering the proposals reviewed by tho committee. He ' found himself in a somewhat peculiar \ position. Ho Was a trustee in tho estate ' of tho late Mr. Mftcarthy,' and as a triis--1 toe 110 was in favour of remitting the duty. But as a Minister of the Crown 1 and a member of Parliament it was his i duty to protect the revenue of the State. Mr. Uusselli You had bettor resign your ' position as a Minister. Mr. Mnssey: "The wish, 011 tho part of ; tho lion, gentleman, is father to tlio thought, but tho wish will not be gratified just yet." He thought it a pity that the committee had not made sonic, recommendation one way or the oih»r. Ho did liot want to take refuge behind a committee, but such a body was in a position to call evidence with a view to arriving at a satisfactory, solution of problems submitted to it. Tho Government, in arriving at a decision, had io rely 011 their own judgment. Higlit up to Iho passing of tlio Death and Gift Duties Act, 1900, charitable gifts and bequests wore exempt from. duly. The lain Sir .Tolu; Logan Campbell and Iho late Mr. MaCarlhy had known the oxistilig law_ perfectly well and were content that, their estates should pay estalo duty. Their wills were made prior to tho pass, iiig of the Act; of 1!)09 and although they had had an opportunity of nlteriiig I heir wills lo meet tho alteration in the law. they had no): done so. The wills Were made before 1000, when such bequests wero free from duty. The estates were exempt from succession duly, but would linblp in Ihe aggregate to payment of estalo duty amounting (0 approximately ,tt)(l,OUO. Reports by the Commissioner. Mr. Massey read memoranda from (behead of the Stamp Department regarding these two bequests. lii regard lo l!io estate of Sir John Logan Campbell, he stated that lis the accounts had ;ial yet been filed lie was unable (<> say wliot duly was rayable. The specific 'charitable ' gifts made by deceased were in this case free of duty, which had to be paid out of.the residuary estate. Tho rcsiduah- estate would in all "probability fall lo the Cornwall I'ark Trustees, and if so they were directed lo employ Ihe residuary moneys in aid of such t'liaritics as Ihey might deem worthy of assistance. If li'ie figures given ill the petition could he accepted, Iho value of (he residuary estate Would be •I'M,OOO. This was to be 111 pavuieni of annuilies lo Lidy Camptell and her daughter; The former had (since died, and 1 (he present value of Ihe current, anliuilv pavablo lo the daughter is estimated n't .L'2li,oll. This left the sum of .t'l2,-100 iu Iho hands of trustees, out of which they were reouired lo pay duty. The balance would" therefore bo inlerest-lieariiiq until the determination of lite remaining iife tenant's interest, so should, at her death amount to a considerable ftuin. The total duly bad I*oll estimated by Ihe petitioners nt .£23,781, out of which they asked Hie SlAte to provide .CtS.IBS, in order that a certain .'eclioli of the communilv might, benefit, for Ihe charities thai might roocive ft id would, it liliglll be presumed, be pllrely loeal. "This," added Ihe Commissidlier of Stamps, "Is ih effect flskihg (ho Stale lo lake out of the general funds a large sum (if money for (lie direet benefit of a particular seelioti of the Coinniuililv. To grant the petition would invite appli* cation for similar treatment in respect of several large estates al present being dealt with. und-M' which cbnrilaWo hequels have been made, nud aim in inspect of all future charitable gifts of no mailer what nnton'.il. \< a revenue collecting officer, T may. 1 Jrust. be urrniilled lo point mil that in exciutiiimr the L'ift of Sir John l.ogan Campbell nf the Cornwall Park e-inie from gift duty by a special Act. of Parliament, Ih" Slnlc re- 1 lejsod prouertj valued at 41350.000 from

1, payment of duty. This surely is. cs faT at it can bo expected to show its favour." I The Principle of the Act. 1 In regard to the estalo of Iho 'lobe T. G. MncurUiy, he pointed out that Iho petition, as in tho other case, had b:on made on more or less sentimental grounds arising from tlio extreme generosity displayed by the respective testators, J'o grant relief ill the direction indicated would create to the country a most expen- 1 Hive precedent, and one that would bo I taken advantage of in respect of minor charitable bequests. He added:—"lhe principle of Ihe Act under which death duties arc imposed is tlint Iho Crown is entitled lo step in and (alio toll whenever property changes hands 011 the death of a person 'irrespective of its destinu- i tiOn.' This system of taxation is univer- ' sal, and in levying the tax tho State is only reaping a fair proportion of tho ' 1 i wealth gained by the individual, tho ac- ) quisition of which is indirectly duo to tho , Stale through the expenditure of public money. 'J'lns applies especially to (lie estate in question, and the other mentioned, | their real estates having been greatly onI lianced in value by unearned .increment. : : It is to be noted that the specific cliaril table bequests referred to in tho will are 1 made free from duty, which said duty is to bo paid out of (he residue of tlio es- ? late. One must therefore assume that the 1 - testator recognised that death duty was 3 lo be paid and that the surplus rcmain- , ing over was to bo dealt with- by the trustees in aid of such charitable aid as 5 they deemed fit." Another point he said J was that certain bequests had beeli made 1 to absolute strangers in blood. In this direction the petitioners could liaVe no ' 1 ) claim to consideration. i ) Mr. Massey added that lie appreciated - i f as much as any member who had 6pokeit . 1 tho generosity and philanthropy of those ! who made such liequests, and 110 felt that j s the Plato should act with generosity in ; >' regard to the matter. The matter Would s be dealt with within the next few days, " and 110 ivould then make a further slate- - J ment to the House on tlio subject. 3 Mr. 11. J. 11. Okey, in reply to what the t Prime Minister had raid, a Wit tlio re- 1 - port of the committee, remarked that the I Government would have tho same evi- - dcnCo before it as had been before the > committee. If the committee had made a ' I definite recommendation it would have 1 , been against Iho Government remitting F the duly. j 1 The reports of the Mto Z Committee upon the petition of tho Macarlhy trus- . tees and u|kih Hint from the trustees ol i v Sir John Logan Campbell's estate, were [ both referred to the Government. 1