This debate has ranged over the question of the redistribution of wealth which was regarded as desirable by Senator Sheehy Skeffington and, I think, Senator Murphy, but Senator Donegan was opposed to it as being anti-Christian. I shall not go into the morals of the matter, but I am told that every Christian country all over the world has something of the kind.
I shall go on to the proposition about the £5,000. I think Senator Murphy is right when he says he is not in favour of the abolition of death duties but raising it to £5,000 is advisable because it allows in people who are not really wealthy. On the agricultural side, a farm of 30 or 40 acres, fairly well stocked, would probably be valued at about £5,000. As Senator Murphy says, even a working man today who has bought his house, and leaves it and a life policy would probably be leaving about £2,000 worth of an estate, which was the exemption limit up to now. So I do not think it can be argued that we are going into the realm of wealth when we make the exemption £5,000. It must be remembered—Senators may not beaware of this—that if the estate is more than £5,000, death duties will be paid on the lot.
If we take an estate of £25,000— where there can be no dispute about the amount being near the limit—they will pay on £25,000, not on £25,000 less £5,000. Another argument which was not used so much today is the argument that the abolition of death duties would attract wealthy people to the country. That matter was not raised today and, therefore, I shall not deal with it.
So far as revenue is concerned, the effect of this provision will be that, if we take the year as a normal one, of the number of estates which would be liable for death duties, more than half will be relieved from that tax. It must be apparent to Senators that, comparatively speaking, the administrative expenses of collecting this duty on the smaller estates is much higher than it is on the big estates. We have, in recent budgets, been moving in the direction of removing charges where the cost of collection was abnormally high. In this Finance Bill, we have abolished the duties on licences for tobacco because it hardly paid to collect them. We are also simplifying the liquor licences in order to make the collection very much easier. We shall collect less, of course, but proportionately at least it will pay us better. There will be a net loss, of course, but, as I say, proportionately it will be better. In the same way here, there will be an administrative saving by getting rid of these smaller estates.
I was asked what the cost would be. The cost is estimated this year at £50,000. The full cost of a provision of this kind does not fall upon the Exchequer for about four years because as Senators are aware, estates are rather slow in being cleared up. In about the fourth year, this provision will cost about £200,000. On the other hand, the yield is moving up because estates are becoming more valuable. To go back to the exemption on a 50 acre farm, 25 or 30 years ago, a 50 acre farm, fairly well stocked, would be valued at a lower figure than it would be valued at the present time. That applies to estates and every other type of property as well.
I was asked a question by Senator O'Donovan as to whether in a case where a husband dies and leaves his estate to his wife and she dies soon afterwards, she has to pay the full amount. There is some relief, if the death takes place within five years. I must confess I am not able to answer precisely what the relief is, but some consideration is given in such a position. I would be able to give more information on another occasion, if I were asked.
With regard to the question asked by Senator Murphy, it is possible to get relief on more than £5,000. I must say I was not very clear on this until the Bill was going through the Dáil or, indeed, I might have tried to deal with it before bringing in this relief, but that can be done at another time. This is a very intricate business and one would want to be a lawyer or an auditor to explain it fully. There is, first of all, a difference between settled and unsettled estates. If a man settles a certain amount on himself for his own lifetime and then it goes to his wife, that is treated separately from what he leaves in his will, and will come under the £5,000 duty exemption. There are different categories under which a person might be exempted.
The settlement might not be made by the man himself but might be settled on him by his father, and he passes it on after his time. Theoretically, one could have three amounts each under £5,000 and all would be exempted, but that would be very unusual and, of course, it is not within a person's own power to do that. He would have to be in the position first of all of having had money settled on him and then it is within his power, it is true, to manipulate his estate in such a way that he could get exemption on the two amounts of less than £5,000.
As I say, I was not as familiar as I could be with the matter. It was said in the Dáil that that could go on ad infinitum but that is not true. There is a limit. I believe there is one other case which I was told about but it was so remote a possibility that I did not take notice of it. As I say, I was not as au fait with all that business until it was being discussed in the Dáil or I might have tried to deal with the question, but there will be another opportunity.