Perhaps I might explain the purport of this section. Prior to the Finance Act, 1935, a not unusual method of evading death duties was to put money on deposit in the name of more than one depositor. On the death of one of the depositors, the amount automatically passed to the survivor, in the absence of any provision to the contrary. In 1935, it was decided to try to close this loophole and, accordingly, Section 33 of the Finance Act of that year provided that, where a sum exceeding £100 was deposited with a bank in the joint names of two or more persons and one of the depositors died, the bank might not pay any of the money to the survivor or survivors, or to any other person, until the bank had received a certificate from the Revenue Commissioners certifying that there was no outstanding claim for duty in connection with the death of the deceased in respect of such money. This was subsequently amended to allow payment to be made ad interim and we are now proposing to amend the existing law by raising the limit of the deposits which may be cleared from £100 to £500.
Committee on Finance. - Finance Bill, 1952—Committee Stage (Resumed).
With the provision of the 1935 Act by which that restriction was imposed which the Minister has mentioned, we would, I think, all be in agreement. The 1935 Act provided that the limit was to be £100 at a time when every estate over £100 was liable for estate duty. We have now arrived at the position at which estates up to £2,000 are free of estate duty and it seems to me, therefore, that the Minister in providing a limit of £500 is being unnecessarily cautious. It is going to mean unnecessary administrative trouble for the survivor of the joint deposit, for the Revenue Commissioners and for the banks, and I think he could quite safely and without any danger of avoidance of the duty for which people are liable increase the limit beyond £500. Will the Minister tell us why the principle in operation previously, which was to have the same limit in the 1935 Act as was free of duty is being departed from and we are now to have a substantially smaller limit in this section than in the duty section?
The fact that there were two figures of £100 limit in each case was purely concidental. A person may have considerably more assets than he has on deposit, as the Deputy is aware, and the one had no relation to the other. That is precisely the principle upon which we are proceeding now—the one things may not have any relation to the other. It does not necessarily follow that because a person has less than £500 on deposit, his estate, when he dies, may not exceed £2,000 and may not come over the limit.
Is the Minister going to give us some explanation of this section? I think this is the only section on which I can compliment the Minister.
I think there is another section, but the purpose of this section is to take two classes of Irish bodies corporate out of the ambit of the 25 per cent. rate of duty on conveyances or transfers of lands, tenements and hereditaments and make the necessary consequential changes in the existing statutory provisions. One of the provisions of the 1947 Supplementary Budget which the Deputy's Party retained when they got into office was the imposition of a stamp duty at the rate of 25 per cent., unless there was a certificate that the person becoming entitled to the entire beneficial interest in the property was an Irish citizen or came within one or other of a number of classes specified. These classes, however, did not include a body corporate without a share capital and neither did they include a body corporate incorporated in the State after 15th October, 1947, whose issued shares were held by any body corporate incorporated in the State after the same date, where the issued shares of the parent corporate body, to put it that way, were wholly or mainly held by Irish citizens. The purpose of the section is to provide for these two classes.
Paragraph (h) is the paragraph the Minister introduced following the suggestion I made to him on 31st October last, because up to this the exemption was operative only in respect of a manufacturing concern and was not operative in respect of a holding concern, such as an insurance company, which was not, in fact, carrying a manufacturing business. That is the way I read the paragraph.
The Deputy is correct. He can claim paternity in respect of the paragraph.
It is the only section on which I can congratulate the Minister, but I am glad to give him that small consolation.
To pursue that matter a little further, as the Deputy has made the remark, I understand that the Deputy, therefore, does not think it is a matter for congratulation that we have been able to increase the earned income relief from one-fifth to one-fourth and that the fact is not worthy of commendation that the first £100 of chargeable income will be assessed at two-fifths of the normal rate, that is, at 3/- instead of 3/6 as heretofore and that the second £100 will be assessed at 6/- instead of 7/6? I should have thought these were two concessions which would appeal to the Deputy.
When the Minister opened his remarks on the previous sections, I said to my colleagues that papa must have smacked him and told him to be a good boy and to give good explanations. If he would remember the smacking and keep to the spirit in which he started his remarks, we might get along much better.
Would it be relevant to inquire on this section if the Minister could indicate the amounts which have been received since 1947 in respect of this 25 per cent. duty?
That is a matter of which I should require notice.
I want to know, first, if it is relevant to raise it here. I do not know whether the Minister has the information available.
I have not.
The purpose of this section is to grant a virtual exemption from the stamp duty in the case of simple transfers of property from parent companies to their subsidiaries, where the relationship between the companies remains the same after the transfer as it was before the transfer. It has been represented that it is inequitable that transfers from parent companies to subsidiary companies in these circumstances should attract ad valorem duty.
With the principle we would be in agreement, but I must confess to some difficulty in understanding how it would operate. I cannot see how, once the instrument has been stamped, there can be any check or control at all as to the continued retainer by the parent company afterwards of the shares of the subsidiary.
This just merely leaves the situation as before. In fact, there is no real change of ownership, but a change could take place which would facilitate the administration of the law of this State in the interests of the State.
It is a thing to be left to work itself out in practice.
I am glad the Minister has introduced this section—I wronged him when I said that Section 18 was the only section. If the Minister goes back to the introduction of the Finance (No. 2) Act, 1947, he will see that it was urged vigorously upon his predecessor at that time that the spouse should be included as the other spouse is being included in this section. Deputy Aiken, as Minister for Finance at that time, resisted furiously in the other Chamber an amendment I advocated at the time to include the other spouse. I confess candidly that it slipped my mind when I was in a position to urge it on Deputy McGilligan. I am glad to see that the Minister is now making up for my lapse.
I cannot for a moment accept that. I suppose I must do the Deputy the ill-compliment of saying that nothing ever slipped his memory, no good idea he once thought of, and I prefer to think he found Deputy McGilligan just as obdurate in this matter but with much less reason than Deputy Aiken.
What does this section mean? It is a very difficult one.
It is virtually the same. When the stamp duty rates on transfer of land and houses were increased in 1947, as the Deputy reminded the House, provisions were made for relief in certain cases. The relief was restricted to cases where persons transferred property by way of gifts to their children or other younger relatives or brothers or sisters. It has been represented that hardship may be caused by restricting the relief to transfer between persons related in this way. This point has been met generally by the section which we have just passed.
It has been represented further, however, that hardship may arise from the fact that the existing relief in relation to gifts or voluntary dispositions does not extend to sales. That is the vital difference. It does not cover the case, for instance, where brothers or sisters may want to sell their interest in the family holding to a member of the family who is remaining on to work the land. Accordingly, this section is designed to cover that case.
That seems satisfactory. Might I mention one thing arising on sub-section (3), which provides that the adjudication procedure must be carried out in this case? That is very right and proper. I might mention that—though the position has improved in recent times—there has been a great amount of delay in the adjudication office due, I think, to the extreme pressure of work. The Minister might appreciate that each new section that we bring in which says that there must be adjudication— which is the ordinary practitioner's way of describing the opinion of the Revenue Commissioners under Section 12 of the 1891 Act—will throw more work on that branch of the Revenue Commissioners. If there is delay there, it causes the public very considerable inconvenience and I hope the Minister, therefore, will bear that in mind.
Am I correct in saying that there is no provision for the transfer of property by children to a widowed mother? I recognise that there is a concession given to a parent who wants to transfer property to a child or children, but is there no similar concession in respect of children who may want to transfer property to a widowed mother?
There is. It is precisely the same.
This section is more or less complementary to Section 18. Effect is being given to the same principle in the case of leasehold property.
When is it proposed to take the Report Stage?
Would it be possible to give the Report Stage now, since there have been no amendments and no debate can take place on it?
The Tánaiste said earlier to-day that only the Committee Stage would be taken.
On the other hand, we could get the Fifth Stage—for which I am sure the Deputy is waiting impatiently—on the next sitting day, if the Report Stage were taken now.
There will be no difficulty in taking the Fifth Stage immediately following the Report Stage.
Is there any reason why we should not take it now?
There is.
It was arranged by the House to-day that only the Committee Stage would be taken. I asked the Tánaiste about that.
The Report Stage to be taken on the next sitting day?
On the understanding that we get the Fifth Stage that day, too.
There will be no difficulty about that.
Provided that the Minister is reasonable and not like he was last night.