Up to now we have had no legal rights system here. We have had no provision for application to the court in the case of children. Therefore, up to now the question of the incidence of estate duty and succession duty on (a) a legal right share or (b) property which a child might secure out of an estate by reason of a court application could not have arisen. Consequently, we have, in this Bill, to make the legal right in the case of the surviving spouse and whatever a child gets by way of court application subject to the ordinary finance law in regard to estate duty, succession duty and legacy duty.
In regard to estate duty, all we are providing for is that the legal right share of a spouse and the amount allocated by the court to a child shall bear their due proportion of estate duty. That is clear enough.
In regard to succession duty, what we are in effect providing is that any legal right share in excess of £15,000 will bear succession duty in the same way as if it were a bequest of the same size. Likewise, if the amount awarded by the court to a child were in excess of £15,000, it would be treated in the same way as a bequest to the child under a will.
Therefore, we are merely transposing the existing duty provisions in regard to estate duty, legacy duty and succession duty to the legal right share of the spouse and to the amount that the child may secure by way of court application.
This is precisely the situation that has always existed, for instance, in regard to the nearest equivalent that we have at the moment to the legal right share, namely the share on intestacy which the widow is entitled to. At the present time, under the law as it stands, the widow is entitled to a one-third share on intestacy. That one-third, on intestacy, at the moment, has to bear its proportion of estate duty, and it is subject to succession duty where it exceeds £15,000. In the present instance, we are merely making the legal right share which will arise in the case of a will bear the same rate of duty as the legal right share on intestacy now bears and has always borne. We are making the exact same scale of duties apply to the new statutory legal right share being created under the Bill that has applied to the legal right share on intestacy over a number of years.
If that is not clear enough, I cannot make it any clearer. There is no new financial exaction in this particular measure; we are merely applying the existing scheme of duties to the legal right share and to whatever property may be secured by the child on a court application.