PAYMENT OF DEATH DUTIES

Hokitika Guardian, 22 July 1930, Page 5

PAYMENT OF DEATH DUTIES

PROVISIONS' OF THE ACT. HOW LARGE ESTATES HELP THE TREASURY. Millionaires are considerably less numerous in New Zealand in .proportion to our population than they are in most other countries of the world } but this Dominion nevertheless has many citizens whose personal wealth is well in excess of a value of £IOO,OOO. These fortunate individuals are called upon to pay large sums to the Treasury, each year by wav of direct taxation,, but. it is not until they die that the State succeeds in getting hold df a considerable slice of the capital represented in their estates. v Death duties in New Zealand are regarded as an important part' of the revenue on which the Minister of Finance has to'depend for maintaining the national services. In some years the revenue derived from this source is much better than* ih Others, but on the whole the duties that are annually do not vary a great deal. This year, owing to tire death of set', era 11 wenlthv persons, notably Sir ftoorcre Clifford, of Christchurch, and Mr, Robert. Hannah, of Wellington, both of whom loft property of a value of over £-500,000. the aggregate of death duties collected isbmild be high. In each of these cases the State will receive over £IOO,OOO as death duties. Dunn" the financial year ended on • I March si last, the Treasury deceived £.l .HIO.OOO fmm death duties, as na-ainst £1.944.000 in the previous year, and £1.899,000 in 1927-28. A GRADUATED SCALE. Under the Death Duties Act, 1921, ; estate and succession duties are payable according to a graduated scale according to the value of each estate. Estate duty is charged and assessed as-a percentage of the final balance of the estate of a deceased person, and succession duty is charged in respect of ! everv person as the successor of the deceased within the meaning of the Act. There is also provision for the payment of gift duty in respect of any disposition of property which is made otherwise than by will without fully consideration in money or money’s worth ,is deemed to be inadequate. The scale c)f rates of estate duty are set out in the first schedule of the Act, as follows: Final balance of estate exceeding £IOOO but not exceeding £2OOO, 1 per cent; £2OOO to £3OOO, 2 per cent; £3OOO to £4OOO, 3 per cent; £4OOO to £6OOO, 4 per cent; £6OOO to £BOOO, "o per cent; £BOOO to £IO,OOO, 6 per cent ;' £IO,OOO to £115,* 000, 7 per cent; £15,000 to £20,000,' 8 per cent; £20,000 to £25,000, 9 , per cent; £25,000 to £30,000, 10 per cent; £30.000 to £35,000, 11 per cent; £35,000 to £40,000, 12 per cent; £40,000 to £45,000, 13 -per cent; £45,000 to £50,000, 14 per cent; £50,000 to £60,000. 15 per cent: £60,000 to £70,000, 16 per cent; £70,000 to £BO.OOO, 17 per cent: £BO,OOO to £90,000, 18 per cent; £90.000 to £IOO.OOO. 19 per cent; exceeding £IOO,OOO, 20 per cent. DEGREES OF RELATIONSHIP. For the purpose of assessing the. amount of succession duty payable in respect of an estate-, the Act provides for varying degrees of relationship to the deceased. These degrees may be summarised as follows (a) wife of a testator; (b) husband; (c) child, grandchild, or other lineal descendant; (d) father, mother, stepfather or stepmother; (e) any other relative not more remote than a first cousin; (f) any other person. The scale of duties payable in respect of each degree of relationship is set out in the Act. The lowest rate is payable to succession where the successor is the wife of the testator, and the highest where the successor is a person more distant than a first cousin. For instance, the rate of succession duty payable where the successor is the wife of the deceased ranges up to a maximum of 3 per cent, os against a maximum of 20 per cent where the beneficiary is not a relative within the meaning of the Act. On most estates of a value of over £IOO,OOO, the succession and estate duties payable work out at 24 per cent of the total value. Ilf the amount of the duties is not paid to the Commissioner of Skamp Duties within three months from the date of death of the testator, interest at the rate of 6 per cent per annum is charged until it is paid. Recently a substantial cheque representing the bulk of the death duties payable in respect of the estate of the late Sir George Clifford. was lodged with the Deputy Commissioner of Stamp Duties in Christchurch. i A SPECIAL DUTY. In addition to the rates of succession duty ordinarily paid an amount equal to 10 per cent of all moneys exceeding £IOOO, payable to any person domiciled outside New Zealand, not being the wife or husband of the deceased, or a relative within Hie third degree or consanguinity, is charged. After probate of a will lias been granted bv the Supreme Court, the executors of the estate are required to appoint competent valuers to value the estate for the assessment of death duties. In the majority of cases, the amount at which the estate is finally assessed for death duties is much in

excess of the amount at which it is sworn for probate. Actually the final value of an estate is not available to the public except with the consent d. the trustees or beneficiaries. j All valuations submitted by the executors of an estate are subject to approval by the Commissioner, who has power, if he thinks any portion of the property lias been under-valued, to secure fresh ' valuations. This power, however, i>s infrequently exercised, as cases where valuations are understated are rare.