Walker's Trustees v Lord Advocate
| Jurisdiction | Scotland |
| Judgment Date | 23 October 1953 |
| Date | 23 October 1953 |
| Docket Number | No. 23. |
| Court | Court of Session (Inner House - Second Division) |
2ND DIVISION.
Revenue—Estate duty—Aggregation of property passing on death—Property in which deceased "never had an interest"—"Estate by itself"—Life assurance policies effected by deceased for benefit of children—Ultimate destination to last survivor of children—Ultimate destination to estate of last survivor of children—Whether deceased had any interest in policies so destined—Married Women's Policies of Assurance (Scotland) Act, 1880 (43 and 44 Vict. cap. 26), sec. 2—Finance Act, 1894 (57 and 58 Vict. cap. 30), sec. 4.
The Finance Act, 1894, enacts:—Sec. 4. "For determining the rate of estate duty to be paid on any property passing on the death of the deceased, all property so passing in respect of which estate duty is leviable shall be aggregated so as to form one estate, and the duty shall be levied at the proper graduated rate on the principal value thereof: Provided that any property so passing, in which the deceased never had an interest … shall not be aggregated with any other property but shall be an estate by itself, and the estate duty shall be levied at the proper graduated rate on the principal value thereof; …"
The Married Women's Policies of Assurance (Scotland) Act, 1880, enacts:—Sec. 2. "A policy of assurance effected by any married man on his own life, and expressed upon the face of it to be for the benefit … of his children, … shall, together with all benefit hereof, be deemed a trust … for the benefit of his children …; and such policy, immediately on its being so effected, shall vest in him and his legal representatives in trust for the purpose or purposes so expressed … and shall not otherwise be subject to his control, or form part of his estate, or be liable to the diligence of his creditors …"
The father of three children took out a number of assurance policies on his own life, three of which bore to be effected under the 1880 Act for the benefit of one of his children, should that child be living on the date when the sum assured became payable (i.e., the assured's death), but, if that child were not then living, then for the benefit of such of his other two children as should then be alive, "provided always that if on the said date [none of the three children] be living the whole benefit of the policy shall vest absolutely in the last of such children to die …"
Another father of three children took out a number of assurance policies on his own life, each of which bore to be effected under the 1880 Act for the benefit of one of his children, should that child be alive on the happening of the event assured against (i.e., the assured's death), but, if that child were not then alive, then for the benefit of such of his other two children as should then be alive, "and if the … said three children shall all predecease the happening of the event assured against then for the benefit of the estate of the last to die of the said three children."
The two assured having died, and the question having arisen whether the value of the policies they had effected should be aggregated with the remainder of their respective estates for the purpose of determining the rate of estate duty payable,—
Held (1) that, under the first form of destination, the assured had never had an interest in the policies, the value of which consequently did not fall to be aggregated with the remainder of his estate, in respect that, being effected under the 1880 Act, they were held for the benefit of his children under a trust which he could not revoke, and that, even in the event of all his children predeceasing him, the policies must on the death of the second of the children to die vest absolutely in the last surviving child and the statutory trust must endure until the assured's death in order to protect the right of the representatives of the last surviving child; but (2) (diss.Lord Mackay) that, under the second form of destination, the assured had a contingent interest in the policies, the value of which consequently fell to be aggregated with the remainder of his estate, in respect that, in the event of his being predeceased by all his children, the last surviving child would take no vested right under the destination; that, if that child died intestate, the benefit of the policies would pass to his heirs in mobilibus ab intestato; and that, these heirs not being protected by the 1880 Act, the trust under which the policies were held and the destination would thereupon become revocable at the will of the assured.
Haldane's Trustees v. Lord Advocate.
Thomas Graeme Nelson Haldane And Others, the trustees nominated and appointed by the late Sir William Stowell Haldane, in certain policies of assurance, appealed to the Court of Session under section 10 of the Finance Act, 1894, against an assessment to estate duty made by the Commissioners of Inland Revenue. The appeal set forth the following narrative of the circumstances, which, was admitted by the respondent:—"(1) That Sir William Stowell Haldane, Writer to the Signet, Edinburgh (hereinafter referred to as “the deceased”), died on 7th November 1951. The appellants are the whole surviving children of the deceased. (2) That on 22nd October 1951 the deceased effected a policy on his own life, number 988131, with the Scottish Widows' Fund and Life Assurance Society. The said policy was effected under the provisions of the Married Women's Policies of Assurance (Scotland) Act, 1880. The said policy, the value of which at the date of the deceased's death was £2620, 4s., was expressed to be payable to:—“Thomas Graeme Nelson Haldane, Mrs Mary Elizabeth Campbell Haldane or Fraser (sic) and Archibald Richard Burdon Haldane, children of the grantee who and the survivors and survivor of whom and the executors of the last survivor are hereby appointed trustees of this policy.” The said policy also contained the following special condition:—“This policy is effected under the provisions of the Married Women's Policies of Assurance (Scotland) Act, 1880, for the benefit in equal shares of such of the grantee's said children as shall survive the event assured against and if only one of the said children shall survive the event assured against then wholly for the benefit of such survivor and if none of the said children shall survive the event assured against then for the benefit of the estate of the last survivor of the said children.”(3) That on 18th August 1951 the deceased effected three policies on his own life, numbers 383824-6 inclusive, with the Legal and General Assurance Society, each for the amount of £3333, 6s. 8d. The said policies were expressed to be in favour respectively of the said Thomas Graeme Nelson Haldane, the said Mrs Mary Elizabeth Haldane or Campbell Fraser, and the said Archibald Richard Burdon Haldane, and in each policy the appellants were appointed trustees for the monies payable under it. Each policy contained a provision, all of which were in similar terms, mutatis mutandis, as follows:—“This policy is effected under the Married Women's Policies of Assurance (Scotland) Act, 1880, and is hereby expressed to be for the benefit of Thomas Graeme Nelson Haldane son of the grantee should he be living on the date on which the sum assured here-under becomes payable but if he be not living on such date then for the benefit in equal shares of such of the grantee's other two children Mary Elizabeth Campbell Fraser and Archibald Richard Burdon Haldane as shall be living on such date provided always that if on the said date neither the said Thomas Graeme Nelson Haldane nor either of the said Mary Elizabeth Campbell Fraser and Archibald Richard Burdon Haldane be living the whole benefit of the policy shall vest absolutely in the last of such children to die and by memorandum deposited with the Society the grantee has appointed the said Thomas Graeme Nelson Haldane, Mary Elizabeth Campbell Fraser and Archibald Richard Burdon Haldane as trustees of the monies payable under this policy …”"
The appeal further narrated that the Commissioners of Inland Revenue maintained that the deceased had an interest in the policies, and that accordingly the value of the policies fell to be aggregated with his other estate for the purpose of determining the rate of duty on the proceeds of the policies; that the Commissioners had assessed the estate duty payable by the trustees on that basis; that after an appeal by the trustees against that assessment the Commissioners had determined to maintain it in its entirety; and that the trustees were accordingly under the walker's necessity of appealing to the Court of Session.
The grounds of appeal were set forth as follows:—"(8) The appellants admit that estate duty falls to be assessed on the proceeds of the said policies, but they contend that the said assessment is erroneous. They maintain that the proceeds of each of the said policies should not be aggregated with the deceased's other estate, but that each of the policies falls to be assessed as an estate by itself, as being property in which the deceased never had an interest in terms of the proviso to section 4 of the Finance Act, 1894. The rate of duty exigible on the proceeds of the said policy of value £2620, 4s., on the basis of assessing the said proceeds as an estate by itself, is 1 per cent. The rate of duty exigible on each of the said policies of value £3333, 6s. 8d., on the basis that each should be assessed as an estate by itself, is 2 per cent. For these reasons the appellants maintain that the estate duty exigible in respect of the said policies should be assessed at the rate of 1 per cent on the value of the said policy of value £2620, 4s., and at the rate of 2 per cent on the value of each of the said three policies for £3333, 6s. 8d."
The respondent answered the grounds of appeal as follows:—(Ans. 8) "Admitted that estate duty falls to be assessed upon the proceeds of...
To continue reading
Request your trial
-
Barclay's Trustee v Commissioners of Inland Revenue
...deliberately not used in relation to the wife. 58 In Scotland there are two revelant authorities. In Haldane's Trustees v. Lord Advocate 1954 S.C. 156 policies were effected by a father for the benefit of three children. Each policy was for the benefit of one child if living at the date of ......
-
Allan's Trustees v Lord Advocate
...11,580; Walker's Executor v. WalkerUNK, (1878) 5 R. 965. 10 Mackenzie Stuart on Trusts, p. 12. 11 Haldane's Trustees v. Lord AdvocateSC, 1954 S.C. 156, Lord Justice-Clerk Thomson at p. 169, Lord Patrick at p. 182;Walker's Trustees v. Lord AdvocateSC, 1955 S.C. (H.L.) 74, Lord Reid at p. 81.......
-
Walker's Trustees v Lord Advocate
...of sec. 2 of the Act of 1880, and were held by him under a trust which he could not revoke. (In the Court of Session 23rd October 1953—1954 S. C. 156.) This was an appeal by William Giles Newsom Walker and others, the trustees and executors acting under the trust-disposition and settlement ......
-
Hicks' Trustees v Lord Advocate
...v. RossUNK, (1897) 25 R. 65; Liberton and Craigmiller Estates v. Lord AdvocateSC, 1942 S.C. 402; Haldane's Trustees v. Lord AdvocateSC, 1954 S.C. 156. 1 57 and 58 Vict. cap. 30. 1 1949 S.L.T. 359. 2 2 F. 679 3 25 R. 65. 4 25 R. at p. 74. 5 1919 S.C. 570 1 1970 S.C. 10. 2 1971 S.C. (H.L.) 45......