Attorney General, - Appellant; the Earl of Sefton, - Respondent
| Jurisdiction | England & Wales |
| Judgment Date | 03 March 1865 |
| Date | 03 March 1865 |
| Court | House of Lords |
English Reports Citation: 11 E.R. 1331
House of Lords
Mews' Dig. xii. 268. S.C. 12 L.T. 242; 5 N.R, 436; and, below, 8 L.T. 794; 32 L.J.Ex. 230; 9 Jur. N.S. 1296; 2 H. and C. 362. Considered and distinguished in Arden v. Wilson, 1872, L.R. 7 C.P. 544; and see R. v. Abney Park Cemetery Co., 1873, L.R. 8 Q.B. 519.
Succession Duty - Time when it attaches - 16 and 17 Vict. c. 51.
[257] The ATTORNEY-GENERAL- Appellant; the EARL of SEFTON,- Respondent [May 30, June 3, 1864; March 3, 1865]. [Mews' Dig. xii. 268. S.C. 12 L.T. 242; 5 N.R, 436; and, below, 8 L.T. 794; 32 L.J.Ex. 230; 9 Jur. N.S. 1296 ; 2 H. and C. 362. Considered and distinguished in Arden v. Wilson, 1872, L.R. 7 C.P. 544 ; and see B. v. Abney Park Cemetery Co., 1873, L.R. 8Q.B. 519.] Succession Duty-Time when it attaches-16 and 17 Viet. r. 51. The value of property for the purposes of the succession duty, under the 16 and 17 Viet. c. 51, is to be ascertained at the time when the interest of the successor accrues. If the property has then no saleable value, nor any actual or potential annual value, it is not capable of being assessed. Neither possible increase or diminution in the value of the property after the succession accrued was dealt with by the Legislature. No system of assessment or charge can be adopted which draws into the calculation of value a prospective or future benefit. When therefore A. succeeded to land which, as alleged by the successor, and admitted in the information, had not for some years before the predecessor's death produced any annual income, and did not produce any, annual or otherwise, to the successor, but of which he afterwards sold part, he was held not liable to duty under the provisions of the statute in respect of the part sold. Semble, per the Lord Chancellor (Lord Westbury).-That property (not specially exempted under the statute), which at the time of the accrues of the succession produces no annual income, but which is capable of being sold in the market, and would fetch a price there, can be assessed as upon an ;'nnual value, equal to interest at three per cent, on the price that might then be obtained for it. Per Lord Wensleydale.-" The beneficial enjoyment " mentioned in section 21 means no more than the enjoyment of the possessor in his own right, and for his own benefit, not as trustee for another. Per Lord Chelmsford.-The 39th section applies only " when the value of a succession shall not be ascertainable under any of the preceding sections." Per Lord Chelmsford.-The word " first," in the 45th section, applies only to-such cases as those mentioned in the 23d, 24th and 25th sections, with respect to timber, advowsons, and leases. Upon the death of the third Earl of Sefton, on the 2d August 1855, his son, the present Earl, became entitled in possession to certain land called the Toxteth Park [258] Estate, near Liverpool. The land in question then was and had been for ten years previously, unoccupied and unproductive, nor was it then in demand or marketable as building' land. It did not form part of the return made to the Inland Revenue Office for the purpose of settling the amount of succession duty piyable 1331 XI H.L.C., 259 A.-G. V. SEFTON (EARL of) [1864-65] by the present Earl. Some correspondence took place between Mr. Trevor, the solicitor for the Inland Revenue, and the Respondent, on the subject of ihis property, and the Earl, on the 2d April 1857, sent to Mr. Trevor the follown-g- paper : -" I hereby give you notice that the several plots of land specified in tho Schedule E. hereto annexed, forming part of the Toxteth Park Estate, devised to me by the will of the late Charles William Earl of Sefton', are not comprised in the leturn this day made by me, pursuant to the Succession Duty Act, 1853, inasmuch as the same plots of land, being wholly unoccupied and unproductive, and not capable of yielding income, fluctuating or otherwise, I am advised that no succession duty is, or will be payable thereon." The Schedule E. comprised plots of land, containing altogether 48,272 square yards. Mr. Trevor wrote an answer on the 6th April 1857, acknowledging the receipt of the notice, and adding, " This land not at present yielding any income, has not been noticed in the assessment made on the 3d instant, of the amount of succession duty payable by your Lordship. But if, after any interval from the late Earl'.'; death, you should derive income or profit from this land, I beg to observe that your Lordship will be expected to deliver a farther account, in order that succession duty may then be calculated according to such value thereof." Xo reply was sent to this letter. On the 22d April 1862, Messrs. Eden, of Liverpool, the [259] solicitors for the Earl, wrote to Mr. Trevor a letter in which, after reciting fully the two previous letters, they said, " Under these circumstances, Lord Sefton considers it right to inform you that he has recently sold a portion of the land specified in the Schedulc-E. to his notice, containing about 1561 square yards, at the rate of about 16s. the square yard. Lord Sefton having been advised by counsel that no succession duty attached upon any of the land comprised in that schedule, cannot now be advised to render any formal account of the land recently sold, or to pay any succession duty in respect thereof. We may add, however, that should the Commissioners still think that succession duty is payable, Lord Sefton will be glad to concur in a special case for the opinion of the Court, or in any other course by which the point can be expeditiously and satisfactorily decided." About 1000 square yards were subsequently sold at 6s. per square yard. In January 1863, the Attorney-General (Sir W. Atherton) filed his information in the Court of Exchequer against the Earl, setting forth the above facts. The information contained the following statement:-"It is alleged by the Defendant, and not disputed by the Attorney-General, that at the time of the death of the De fendant's father, and of his becoming entitled as aforesaid to the land in respect whereof he so declined to pay succession duty, the same was not in demand or marketable as building land, nor was it capable of being sold or let profitably us such . . . and that the said land was not, at the time of the Defendant's becoming entitled thereto, capable of being used productively for agricultural or other purposes, and that such land was then, and had been for ten years previously, and (except that portion thereof which "has been sold, as before stated) has ever since been wholly unoccupied and unproductive, and [260] that during no part of that time has any income or annual profit been derived from it." And that from the part which had been sold, the Defendant had derived no profit up to the time of the sale. The information prayed (among other things), " that it may be declared that the Defendant is chargeable with duty after the rate of one per cent, in respect of his succession to the land mentioned in Schedule E. to his aforesaid notice, or at leapt so much of the said land as has already been, or may at any time hereafter be, sold or otherwise disposed of." The Defendant put in an answer, admitting the statements in the information to be true, but denying his liability to pay succession duty in respect of the said laud. The case was argued in the Exchequer before the Lord Chief Baron Pollock, Mr. Baron Martin, Mr. Baron Channell, and Mr. Baron Wilde; and on the 6th July 1863, the Court (Mr. Baron Martin, diss.) made a decree declaring that the Defendant was not chargeable with succession duty (2 Hurl, and Colt., 362). This was an appeal against that decree. 1332 a.-g. v. sefton (earl of) [1864-65] xi h.l.c., zsi The Attorney-General (Sir E. Palmer), the Solicitor-General (Sir R. P. Collier- Mr. J. Locke, and Mr. Hanson were with them), for the Crown.-It is not stated here that the land was of no value, but only argumentatively that it was not in demand; nor is it stated that the land could not be let at any rent. If it was of some value, or if it would fetch some rent, the duty attached upon it and could be ascertained. The statement merely amounts to this, that at the time of the succession accruing, it could not be made largely profitable, but that the largely profitable use of the land would arise when it could be leased or sold for building purposes to [261] meet the increasing wants of Liverpool. Under these circumstances the burden of proof that he is exempt from liability to the duty, lies on the Respondent, for otherwise the duty is fixed on the land by statute. And for that purpose, the worth of it must be ascertained, according to its real value, not according to the profitless abandonment of it, an abandonment of only a temporary nature...
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