SUPREME COURT.

Dominion, Volume 7, Issue 1904, 12 November 1913, Page 11

SUPREME COURT.

SUCCESSION DUTY: WHO PAYS? Tho Chief Justice (Sir Robert Stout) yesterday gave judgment in tho easo heard tho previous day with, regard to the administration of the estate of tho late William Fiulay, gentleman, Wellington, in which Mr. R. Young represented tho executors and Mr. M. Myofs appeared for Margaret Jeffoott, Leslie .Jeffcott and Jano Kilgour, His Honour remarked: The question in this petition by tho executors for l<save to distribute the assets of tho estate «f tho deceased, William Ivinlay, is: 'us succession duty payable by the legatees under tho will, or must the executors _ pay the succession duty out of the residue?" The will makes grants of six legacies, and then, proceeds as follows: ' "And I direct that all tho above legacies shall bo paid to those entitled thereto freo and clear of legacy, estate, or any other duty." If, instead of th© word "legacy" tho word "succession" had boon used, it could liardly be contended tliat tho lcgaoies would not bo exempt from duty. There is no "legacy" duty so called in tho statute, but there is a "succession" duty. Sub-section (2) of Section 80 of the Death Duties Act-, 1909, says: "Estate duty and succession duty shall bo payable in. accordance with the directions of tho will of the deceased so far as regards any property which' is subject to the dispositions of that will." Sub-section (8) of the same section says: "Subject to any such directions, succession duty sba-ll be payable out of tbc property in respect of which tho duty is assessed, whether that property is vested in tho administrator or not, or out of any money, investments, or other property i'or tho time being representing that property." By Seotjoii 15 of tho same statute a legatee is a successor, and has, therefore, to pay succession duty on his legacy. What is this but a legacy duty, though tho nam® duty is not used? The directions in this will appear to jne clear: "Tho legacies shall be paid . . . free and clear of legacy estate or any other duty." Eveii if the words <! or any other duty" did not appear in tlie will, I would have thought the direction sufficient to impose upou the executors tho burden of paying tho succession duty. But tho words added show that tho testator intended the legatees to .get tlieir legacies freo and clear of any duty in the nature of a legacy or estat(> duty. Tho Court of Appeal had treated our succession duty as a legacy duty. His Honour, therefore, directed that tho succession duty payable on tho legacies should be paid by the executors out of the residue, the costs of both parties to corns eut of the estate.