Succession Bill, 1965: Financial Resolution.

I move:

That estate duty, legacy duty and succession duty shall be payable having regard to the provisions in relation to the distribution of property contained in any Act of the present session to reform the law relating to succession to the property of deceased persons and, in particular, the devolution, administration, testamentary disposition and distribution on intestacy of such property, and to provide for related matters.

I should be obliged if the Minister would explain this Resolution.

It is necessary because of the effect certain provisions of the Succession Bill will have on succession duty, legacy duty and estate duty. The provisions which will affect these duties are section 9 (2), section 108 (2) and section 118. This is separate from the Money Resolution.

This is a taxing resolution.

Is it not the purpose of this Resolution to raise money by means of estate duty and succession duty?

This Resolution means that what we have been saying all along is correct and that what Fianna Fáil, through the previous Minister for Justice and this Minister, have been saying is incorrect. Part of the provision here is for the purpose of raising further death duties.

The Minister is doing away with the powers contained in section 14 of the 1914 Finance Act. This, in fact, is another little Budget, another Financial Resolution imposing taxation, and it is because it does that the Minister has to introduce it.

Nonsense. It changes the basis of assessment.

The Minister should take the example of the Minister for Finance and stand up when he is speaking.

I have spoken.

They have run out of arguments against the Succession Bill.

And the Minister has run out of Succession Bills.

Are we now in the astonishing position that the Minister introduces to the House a Resolution which nobody knows the meaning of and which the Minister declines to explain to the House? The Minister thinks it is not necessary to give any explanation to the House. If that is so, we have reached the nadir——

Deputy Dillon may not have been in the House when I explained the matter.

I have been in the House during the past hour.

I shall go into greater detail, if the Deputy wishes. No extra taxation arises out of the Resolution.

Is it clear that the Minister is not concluding?

I am only explaining that the Resolution becomes necessary because of the effects of certain provisions in the Succession Bill—section 9 (2), section 108 (2) and section 118. The combined effect of the proviso to section 9 (2) and of Part VI of the Bill is to provide that succession duty on pure realty shall be payable by the new statutory next-of-kin designated in Part VI instead of, as at present, by the heir-at-law. In referring to statutory next-of-kin, I, of course, include a spouse and children.

The effect of section 108 (2) and section 118 (2) is twofold. Firstly, the legal right share of a spouse and any provision for a child under section 117 will be payable out of the estate remaining after the payment of expenses, debts and liabilities other than estate duty. Secondly, the legal right share of a spouse and any property given to a child under section 117 will each bear its own due proportion of the estate duty payable on the full estate of the deceased, that is to say, the estate remaining after payment of all expenses, debts and liabilities other than estate duty.

Under section 118 (1), legacy and succession duty will be payable on the legal right share of a spouse as well as on property given to a child under section 117. A legal right share and the share of a child under section 117 represent new succession rights which will be treated as if they arose under and by virtue of the will of the deceased. For clarity, I might perhaps explain that in general succession duty is payable on immovable property, whereas legacy duty is payable on movables.

The reason that section 118 (2) provides that the legal right share of a spouse and the property given to a child under section 117 shall each bear its own due proportion of estate duty is that otherwise complications would arise where a bequest of property was made for public purposes. Such property is exempt from estate duty to the extent that it becomes available for public purposes. However, one cannot calculate the amount so becoming available until the amount of the legal right share and the value of the property (if any) awarded by the court under section 117 have been determined. In fixing the size of the estate out of which the legal right share or the property under section 117 is to be paid, estate duty is not deducted. This is, as I have indicated, because of the provision in subsection (2) of section 108.

Under section 14 of the 1914 Finance Act, if a testator settles his property on trust for his wife for life and, after her death, on his children, there is no estate duty payable on her, the second, death. Under this Bill, that is not a discharge of the obligation in respect of legal right. In consequence, when the wife dies, there must be estate duty payable in respect of the second death under this Resolution. Neither the Minister in the Bill nor the Minister for Finance in the Finance Bill has protected that exemption and it is because that exemption is not protected and is done away with, amongst other reasons the Minister for Justice has given, that the Financial Resolution is necessary. It has the effect of creating additional estate duty payable in respect of the death of the second spouse and the effect of this Resolution is that such duty must be payable.

No, what the Deputy has referred to is referable to a Finance Bill or an amendment to a Finance Bill, but it has no reference whatever to any of the sections referred to in this particular measure. Indeed, the Revenue Commissioners advise me that there is no additional taxation in relation to estate duty, legacy duty or succession duty, involved in this measure. The basis of assessing these duties is changed by virtue of the spouse's legal right share and of the children's right to appeal to the courts, but there is no further amendment or change.

That is a trick answer. The fact is that this Bill means that there is not a discharge of the legal obligation created here to provide that a wife, for example, would have the life interest. If the wife has the life interest alone, then on her death there is no duty payable in respect of property that has already borne duty and it is because of that that this Bill does create additional duty.

I am afraid the Deputy is under a misapprehension. There is nothing in this measure to prevent a testator from doing what Deputy Sweetman has stated, if he wishes to adopt that method of avoiding a certain proportion of duty, and the spouse may take the life interest, with further provision after the death of the spouse. There is nothing to prohibit a testator from doing that.

I am not at all clear what the purpose of this Resolution is, if it is not for the purpose of having estate duty paid that is not payable under the law as it stands at the moment. Surely that is putting it in very simple terms. Perhaps the Minister will tell me whether or not I am correct. If this Resolution is not passed by the House, what is the effect? Is it not the purpose of moving the Resolution to ensure that succession duty, or estate duty, or whatever you like to call it, is going to be payable on the passing of this and presumably on the passing of the Bill, which would not be pavable if the Resolution were not passed?

We need this particular Resolution because the basis of descent is being changed by incorporating a legal right for the spouse and the right of children to apply to the courts. By reason of that change, it is necessary also that we have a Financial Resolution to provide that succession duty, legacy duty and estate duty can be paid. The Deputy's presumption is correct. No additional taxation under these duty headings is involved in the measure. It is merely to provide for the continuance of these particular duties under the new scheme of descent which will obtain under this measure.

Is it not the effect of section 110 that the spouse must take, if there are no children, one-half of the estate absolutely and if there are children, one-third absolutely?

Not that "she must take". This is a misapprehension I have sought to remove in the course of the discussions we have had on the Bill at all stages. There is no compulsion in regard to legal rights, either under the Bill as it was originally framed or as it is now amended. A widow, for example, if she wishes, may take her legal right share of one-third where there are children or one-half where there are no children, but there is no compulsion so to take and, in the event of her not taking within 12 months, then the right is forfeited. That is why she may take a life estate if she thinks that is more suitable. If she does not want to take anything out of the estate, she need not. The only right she will have is a legal right which she may elect to take within 12 months—not a mandatory share.

In the Minister's explanation the option she must take is an option as to whether she is going to take the one-half or the one-third as the case may be and put the estate her deceased husband has left to a second lot of duty after her death. That is what it means.

Yes, the law is perfectly clear that if one spouse leaves property to another spouse for life, then estate duty is payable on the death of the first spouse and not on the death of the second, but if a spouse leaves property to the other spouse absolutely and the other spouse succeeds to it absolutely by intestacy or by taking it under this Bill, then on the death of the second spouse, estate duty will be paid for a second time. Therefore this scheme of the Minister's does mean that in relation to what I may call the family fortunes if the spouse exercises her legal right under section 110, the State gets a double crack of duty. I admit that she is not bound so to exercise, but if she does, the State gets a double crack of duty and therefore the position is that this legal right, in so far as the legal right is concerned, does away with the spouse's exemption, and it should not.

What I have already suggested to the House is that this discussion is more relevant to a discussion on a Finance Bill in that there is no change in any section under this measure in regard to——

Section 110 is the change.

No, because in section 110 there is no compulsion on the surviving spouse to accept a particular share and insist on it. If the spouse acts as the Deputy suggests, the estate duty which exists at present, whatever that may be, will come into operation, but there is nothing in this measure to change that level of estate duty. If the spouse chooses to act in so far as his or her legal right is concerned, then the existing provisions of whatever Finance Act is law will come into effect. This, however, is not as a result of this measure; it is as a result of whatever Finance Acts have been enacted. There is no compulsion under this measure to make a surviving spouse proceed in that manner if it is to her advantage to take a life estate. In many cases a procedure which a widow might adopt would be to accept an annuity from a life estate. Estate duty can be avoided in that way, as is the position at the moment. The widow can enjoy the fruits of the life estate, and the remainder of the estate after her death will go as the testator wishes. That can be done under the will, as at the present time, and it may be of advantage to the widow to adopt that procedure.

Is it not an utter fraud to pretend that you are giving this legal right to the widow as something of benefit to her when in fact it may mean a substantial detriment to the family fortunes? In not disclosing that, the Minister was misleading the House.

Hear, hear. He did not know it.

And if the Minister will look around, he will see from the faces behind him that they, too, were misled by the Minister regarding his fraudulent presentation.

The Deputy should not be so pretentious.

I rather think Deputy Sweetman was drawing a wrong inference from my remarks. I do not see any sign of fraud at all but I should like to have some information from the Minister because I think we still have not got the point quite clear.

In other words Deputy Booth sees nothing.

I think I see more than Deputies on the other side of the House. As I see it, the Resolution we are discussing at the moment is simply to enable the Revenue Commissioners to assess duty on property which is passing by way of legal right. The situation at the moment, as I believe it to be, is that succession duty is payable on property passing under a will or passing on intestacy but if passed under a legal right it is not subject to tax at all.

Hear, hear. In other words, this is a tax proposal.

Of course it is.

The tax is already there. Whether the surviving spouse absolutely gets the property by way of legal right or absolutely by specific reference under the will, there is no difference. If the husband leaves half the estate to his wife absolutely, then that half of the estate will be subject to estate duty on her death——

There is no trouble about estate duty.

If she has a legal right, without this Resolution, no estate duty will be payable on her death. It just simply means that we are putting property passing under a legal right into exactly the same position as property passing specifically under a will. That is not additional taxation but it is something I had not seriously considered. I do not see why a person should expect to avoid estate duty on his own estate simply by reason of the fact that he had succeeded to the property by way of legal right rather than by way of benefit under a will or intestacy.

I should like to put one specific question to the Minister and I hope that I shall not add to the confusion by so doing. I should like to preface my remarks by saying that nobody knows less about succession and estate duty than I but I have been informed by the people who know about succession duty and who are experts on it and I have been asked to raise this point. It is for that reason I am raising it. It appeared to them that where the legal right is granted to a person, the widow in this case, under the will, and the husband dies, property will pass on death—that is where Deputy Booth is wrong; he spoke about property on intestacy and under a will but what refers to succession duty is what passes on death—and what I want to ask the Minister is this: is it clear that succession duty may be exacted by the Revenue Commissioners on this? Is it clear that when a legal right is granted in estates coming under this will and the husband or the wife, as the case may be, dies, there is a passing of that legal right under the statute on the death and on that itself succession duty may be charged? On top of that, what she gets under the will or eventually whatever she accepts will be charged succession duty.

I am merely confirming what Deputy Costello said. We can see the position in relation to estate duty. Estate duty is chargeable on the property passing on death but so far as the recipient is concerned, succession duty attaches to any property real or personal which passes gratuitously as a result of death or on death.

Here is a situation where a new estate or enforceable right, a legal right, a statutory right, comes into operation on death and on death it seems clear, under the provisions of the Succession Act, that now succession duty attaches to the surviving spouse who gets the legal right as a succession which becomes liable for duty. That is our concern. It is perfectly clear now: this motion here is a tax proposal. That is why it is on the Order Paper. It is a proposal which provides that estate duty and succession duty become payable having regard to the provisions in the Act relating this succession duty to the property of deceased persons. As Deputy Sweetman said, it would have been far better if the Minister had disclosed this fact to the House at an earlier stage.

If the Minister disclosed it earlier, he certainly must have forgotten what he said.

I disclosed it fully to the House and I shall repeat it, if the Deputy wishes.

So far as one can see at this stage, here is a new provision which is attaching or attracting new succession duty. I do not know if it has happened before but it certainly appears strange to me that a motion of this kind should be in the name of the Minister for Justice. I should have thought it would have been tabled by the Minister for Finance: I do not know why it was not tabled by him. It certainly cannot be considered as anything but a taxation resolution. It is intended to tax every widow who under the Succession Bill gets a legal right——

You are switching your feet now.

I am not. It is intended to tax her as the recipient, as the person entitled to succession. Under the Succession Duty Act, she is now going to be taxed. Apart altogether from other death duties, estate duty will attach in any case following death. That is Deputy Booth's point and I can understand that but the problem I see is that by reason of the creation of a legal right, there is going to be new attraction of succession duty. Because of death the legal statutory right comes into operation.

There seem to be two entirely different points here. One deals with estate duty in respect of death and it arises only on death. To that extent I agree with Deputy Booth. The other is succession duty. They are two entirely separate matters. I disagree with Deputy Booth in relation to that. What was intended and what the Minister was claiming for the Bill was that it gave the surviving spouse in addition a legal right and he did not say, and it was never said, that he gave the widow a legal right but in so doing he was providing that when she took that legal right, the family fortunes would pay more to the Revenue Commissioners. If we were going to give a legal right, the family fortunes should have been protected to the same degree as far as succession duty is concerned. That is an entirely different point.

This discussion began when I asked the Minister for Justice to explain his Resolution to the House. I venture to say that at that stage of the proceedings no Deputy — and I include the Minister for Justice—had the faintest notion of what this Resolution meant. The Minister for Justice then moved over beside the seat which he now occupies and borrowed a brief which he then read to the House. I believe it was the first time the Minister for Justice himself had any inkling of the significance of this Resolution.

Has the Deputy any basis for that or is this just speculation?

Shrewd observation from this side of the House.

I had the brief with me over there.

This is pure speculation.

At this stage of the proceedings, his interpretation of his own brief is called in question in the House and I very much doubt now if many members of the House fully understand the significance of this Resolution. But, if the purpose of this Resolution is to make certain persons who take an estate under section 110 of the Succession Bill liable to duty who but for this Resolution would not be liable to duty, I want to know why was that provision not incorporated in the Finance Bill where we could discuss it in its appropriate context.

What is the purpose of trotting in here with a Resolution which I am now going to read for the House as an object lesson in obscurity? Remember, the purpose of our deliberations here is to understand what the Government are doing. Here is the Resolution we are asked to pass:

That estate duty, legacy duty and succession duty shall be payable having regard to the provisions in relation to the distribution of properties contained in any Act of the present session to reform the law relating to succession to the property of deceased persons and, in particular, the devolution, administration, testamentary disposition and distribution on intestacy of such property, and to provide for related matters.

How many Deputies understand what that means?

It is quite simple

Simple as falling off a log. We have already had four separate views expressed as to its significance.

I will give one view when the Deputy is finished.

The Minister has read to us the departmental brief and I must say, having listened to it, I am not very much wiser than I was before he read it. We have Deputy Sweetman's opinion as to the effects of the Resolution; we have the point raised by Deputy John A. Costello, which I do not think the Minister has so far attempted to reply to; and we have the matters raised by Deputy T.F. O'Higgins. Having listened closely to all these proceedings, I do not know and I do not believe there is a single Deputy in the Fianna Fáil benches who knows what is the ultimate significance of this Resolution.

But there is one thing that is perfectly clear to me and I derive this information, not from anything the Minister has said, but from my knowledge of procedure in this House: this Resolution would not be necessary unless it proposed to legalise a tax that otherwise would not be legal. There is the nub of this matter. This Resolution would never have appeared on the Order Paper unless it was designed to serve some purpose. One thing is certain, this Resolution does not exempt from tax anything that would otherwise be taxable. If it does not exempt something from tax, if it would not be necessary if it left thestatus quo as it was, surely it is a legitimate assumption to say that it is taxing something that would not be taxed if that Resolution were not passed?

Would the Minister tell us what is going to be taxed as a result of that Resolution if passed by Dáil Éireann because the Dáil ought not to pass a Resolution designed to tax something which is not at present liable to tax unless we know precisely the nature of the burden which we are asked to impose, whether it be upon widows or the remainder men under will or under statute as provided in any particular settlement that may be made?

I do not believe that at this moment the Minister himself knows what is liable to be taxed by this and I think the Minister is in this dilemma, that he is sustained by the officers of the Department of Justice and that he has not at his disposal at this moment the advice and counsel of the Revenue Commissioners.

I have indeed. I have had the very fullest advice.

You have had.

I have had.

And you do not understand it and you are now not in a position to refer to them because they are not beside you.

I understand it fully.

You have not the faintest notion yourself of what the impact of this Resolution is. You have your brief which has been prepared, which you read out very rapidly and which a great many of us do not ourselves understand. I do not believe anybody understands what this is going to tax.

Let me isolate this one point: this Resolution does not exempt anything from taxation. Avowedly, it does not leave things as they were. Therefore, it is a legitimate presumption that it imposes tax on something that would not be taxed unless this Resolution were passed. Will the Minister tell us now what it is that he proposes to tax?

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.

Will the Minister explain this to me because I cannot yet grasp the machinery apart from its effect: we are passing a Resolution which appears to me to correspond to the ordinary Money Resolution passed by the House in reference to a Bill.

No. That is the next one—No. 6.

This is a Financial Resolution?

That is right.

Which is a different thing from the next one?

Therefore, it is something within the ambit of the Finance authorities?

Assuming that this Resolution is passed and that it does what the Minister says it is intended to do, namely, bring all the existing duties to bear upon the new legal rights created under the Succession Bill, how will that be proved in court? If there is an objection to it, will this Resolution be produced or will it be covered in some Act of Parliament?

The relevant provisions are sections 9 (2), 108 (2) and 118 of the Succession Bill. They will implement the financial implications of the motion.

That is what I want to get at.

It is only because of these sections the Minister brings in this Resolution?

That is right.

Is it subsection (2) of section 9?

Surely subsection (2) of section 9 is a saving section, not an imposing section?

It is the proviso to section 9 (2) which affects the position.

I am still not satisfied in regard to this motion.

Without endeavouring to add to the confusion, may I make this point: as the law now stands, apart from any changes that may take place, a surviving spouse, a widow or widower, who derives a succession under the Succession Duty Act from his or her spouse, becomes liable to succession duty?

If it is over a certain amount.

Because it is property which the spouse derived gratuitously as a result of the death. Here is a Bill which gives a statutory legal right operative on death relating to the property of the deceased and which confers a property right on the surviving spouse. That is, in effect, succession in relation to the law as it stands now. Is it not clear that if the law continues as it is that there is a succession created and that it attracts succession duty, apart altogether from what Deputy Sweetman has been saying about estate duty? Is that not the position?

Yes. I would ask the House to consider the alternative. If there is succession duty in the case of an intestate share and in the case of a bequest, we surely could not have the situation where there would not be succession duty in the case of a statutory legal right share or where a court decides that a child shall receive a share. What we are seeking to do is to have existing succession duty and estate duty applied "across the board", so that the person who gets a share by way of legal right or from the courts will not be exempt while the person who gets it by way of bequest is caught.

I expressed some surprise that this motion was not in the name of the Minister for Finance, but I am now more surprised that it is not. There is a proposal in the Finance Bill which has been circulated and it seems to be relevant to this discussion.

The Minister knows nothing about it. He does not appear to be aware of section 27 of the Finance Bill.

I am, indeed.

Section 27 of the Finance Bill, depending on what way one reads it, would appear to be relevant to this discussion here in so far as it relates to succession duty, because section 27 appears to abolish succession duty in so far as it applies to a surviving spouse.

And the Minister says he is extending it.

I would like to know what is happening in this Government. Were there any discussions between the Department of Justice and the Department of Finance? Is the House being asked to agree to the application of a succession duty in relation to spouses when tomorrow we shall be asked to abolish it?

Or is there some catch between the two? The Minister mentioned section 108 (2) as being the charging section for duty. Section 108 (2) reads:

(2) In this Part, references to the estate of the testator are to all estate to which he was entitled for an estate or interest not ceasing on his death and remaining after payment of all expenses, debts, and liabilities (other than estate duty) properly payable thereout.

Where is the death duty charging provision section there?

It must be read with section 118.

No. Sections 9 and 118.

Yes. Sections 9 and 118 are tied. The Minister knows so little about the effects of this resolution and so little about the Finance Bill that his colleague, the Minister for Finance, is introducing, that he ought to adjourn this discussion and take a little tuition from his colleague, the Minister for Finance.

This matter is of importance because under section 27 of the Finance Bill, which the Minister must have been aware of at some stage, there is reference to the abolition of this duty: subsection (1) reads:

The legacy and succession duty payable at the rate of one per cent and the additional succession duty at the rate of ten shillings per cent shall not be chargeable on a legacy derived from a testator or intestate dying after the passing of this Act or on a succession conferred after such passing.

That would mean that if we were to pass the Succession Bill before the passage of the Finance Bill, this becomes a succession before the passing of the Finance Bill, and if we pass this Resolution, the succession duty shall apply. I would very humbly suggest to the Minister that he should confer with the Minister for Finance and find out exactly what is the effect of these provisions.

I have no intention of conferring with anyone.

If we pass this after the Finance Bill, this Bill will repeal the Finance Bill.

Of course it will.

No. I have tried to state this clearly. All this Bill will do will be to put into effect in relation to legal right shares and amounts allocated by the courts the current finance provisions, whether they be provided under the Finance Bill of 1965, 1966 or 1967. The current provisions at the time will be the relevant provisions. I do not propose, therefore, to go into details of the Finance Bill, 1965. Whatever provisions emerge after that Bill becomes law——

Then it is relevant.

——will be the current law in regard to duties. Whatever provisions represent the current law in regard to the three forms of duty I mention—estate duty, legacy duty and succession duty—are applied by the section, at whatever the current rate may be, to (a) all legal right shares and (b) amounts allocated to children by the courts. There it is. A complete mountain is being made out of a molehill. There is nothing very subtle, nothing devious, nothing involved, in all this.

I had hoped that it might be worthwhile at some stage to ask the Minister to endeavour to explain the motion. The Minister endeavoured to have the motion accepted by the House simply by bobbing his head at the Chair and saying "I move". Were it not for the fact that we dragged some information out of him the motion would have been accepted. I cannot see now that it is worthwhile trying to drag anything out of the Minister because he has not made anyone any wiser. He says there is no relevancy in considering this in the context of the Finance Bill circulated by his colleague, the Minister for Finance, but, if he reads that Bill, he will see that the passing of these two measures may have vital repercussions on the question of whether succession duty is or is not payable on a legal right share, assuming the Succession Bill goes through. As things stand, I think the House is being put in a very dicey position in being asked to accept the Financial Resolution at this stage.

I cannot follow this argument in the very slightest degree. It seems to me the position is that, if we do not pass this Resolution, we would, by passing the Succession Bill, be creating a class of persons who might avoid what would normally be their liability to succession and legacy duty. To that extent the Succession Bill is interfering in strictly financial matters and the passing of the Bill, without this Resolution, would open a very wide loophole. All the Minister is doing here is putting the matter right so that whatever the Minister for Finance may do in his Finance Bill will affect all transfers of property whether under legal rights, bequests or intestacy. If we do not do this we will be creating a special privileged class of persons who will succeed to property without paying succession duty. That is not what we intend to do.

I see no difficulty in understanding why the Minister for Justice has to do this. If he did not do it he would be infringing on the territory of the Minister for Finance. In order to keep himself right, if you like, with the Minister for Finance he has got to make it perfectly clear that legal rights will be subject to exactly the same liability to succession duty and legacy duty. I feel the Opposition may have been taken slightly unawares because of their not having gone into the matter in detail in advance, but no useful purpose is being served by trying to stir up a scandal about it. There is no scandal to be stirred up. It is just a question that, if the Resolution were not passed, we would be giving the recipients of legal rights a quite unwarranted preference over those succeeding in the normal way. I am absolutely satisfied, I must say, about this. Normally, I am prejudiced against the Revenue Commissioners and against all taxation provisions, but I cannot see any objection to this.

May I say one final word? Deputy Booth says in a very plausible way that all that is supposed to be done is to provide a bridge into the ordinary law in relation to succession and other death duties. That is very plausible and it would be quite relevant if one were considering this by itself. The fact is that we have had circulated—Deputy Booth has also received a copy—the Finance Bill and section 27 of that Bill provides as follows:

The legacy and succession duty payable at the rate of one per cent and the additional succession duty at the rate of ten shillings per cent shall not be chargeable on a legacy derived from a testator or intestate dying after the passing of this Act or on a succession conferred after such passing.

The right referred to there is the right attributable to a surviving spouse and that is a provision which says, in effect, that in respect of a legacy derived from a testator dying after the passing of the Act, or in relation to a succession conferred after the passing of this Act, where the recipient is a surviving spouse, legacy and succession duty shall not be chargeable. That is what the proposal is.

Under the Succession Bill the only need for the Finance Resolution the Minister has moved is to deal with such new duties as may become payable under existing law, relating to the succession conferred as a result of a legal right. In those circumstances it would appear to me to be the prudent thing for this House not to pass this Resolution. If this Resolution is not passed this matter falls to be dealt with, as it should be dealt with, under the Finance Bill and to be considered under section 27. If the Dáil passes section 27 there will be no problem at all because then the legal provisions that would attract the duty go. If the Dáil does not pass section 27, then the matter may have to be dealt with separately. Surely we ought not to be asked here on a Tuesday to pass a Resolution which, in effect, applies a tax to widows or surviving spouses who get this legal right when, tomorrow or next week, we may be asked to abolish this duty completely in that relationship. That appears to me to be quite absurd.


In my view, therefore, the prudent thing to do would be not to pass this Resolution.

The position is even more absurd than Deputy T.F. O'Higgins has demonstrated.


What we are seeking to do under this Resolution is to double the rate of duty and, next week, we will be asked to abolish it.


We cannot gloss over this situation as easily as Deputy Booth does. Lawyers who would endeavour to implement the law after the fashion of Deputy Booth today would be liable to charges of negligence.

Lawyers are not showing up too well in the House today.

The common objective on the part of those who seek to amend the law of succession is to provide a proper share in a deceased person's estate for the widow and the family. The effect of the Resolution will be that a family which seeks to avail of the better opportunities that are being given by Oireachtas Éireann in 1965 will, by doing so, penalise themselves by having to pay double the rate of duty.

That is absolute nonsense.

How does the Deputy make that out?

At present there is a simple clause which can be put into any will to avoid the imposition of death duties twice on the one family estate, succession duties and legacy duties. The effect of this amendment is to allow the Revenue Commissioners to charge the same estate twice. It is no answer for the Minister to say that this legal right is simply a permissive right, that one need not exercise it. At present a prudentpater familiae can protect his family against the hunger of the Revenue Commissioners by a simple clause providing for a life estate. Now the prudent head of a family who seeks to use the family fortunes to the best advantage and to save them from the avaricious grasp of the State is having that weapon taken out of his hands so that the Revenue Commissioners can come in twice and do what they are now able to do only once. We shall have the Minister for Finance next week proposing not to allow them to do it at all.

This is a crazy and unfair Resolution. It may operate for only a short while if this Bill happens to reach the Statute Book before the Finance Bill, which I doubt. It is a classic example of the kind of thing that happens in this House, where the administration and the Executive on the one hand either understand something and try to mislead people, or else do not understand it and create an appalling social injustice. I would plead with the Minister not to press this Resolution. There is no need to do so at this stage. We can proceed with the discussion on the remainder of the Bill.

I have every intention of pressing it. Up to now we have had a reasonably sensible discussion on this Bill. I have been seeking to explain this in very simple terms. Irrespective of what the Finance Bill of 1965 contains or what the Finance Bill of 1966 will contain, they will not be affected by the provisions here, which merely apply the existing scales of succession duty, legacy duty and estate duty to legal right shares and amounts allocated by the courts. If there is no succession duty, legacy duty or estate duty, that is the end of the matter. These provisions are merely designed to ensure that whatever legacy duty, succession duty or estate duty is subsisting at that time shall apply to a legal right share or an amount allocated by the court. As Deputy Booth stated, there would obviously be a complete gap in the revenue situation if I, as Minister for Justice, could come in here with a measure which introduced a new category of succession rights exempt from the current rate of duty—if I could come in here and exempt from the operation of the current Finance Act legal right shares or amounts allocated by the courts. That would be an outrageous situation which I could not stand over. I am simply making provision that whatever duties are current, whether under this year's financial measures or next year's, will apply to the legal right share and the amount allocated by the court. The situation is quite clear. I fail to understand why the essence of it has not percolated to some of the legal minds opposite.

Would the Minister explain one thing? Why in the Resolution are there the words "relating to succession to the property of deceased persons"?

What is wrong with that?

Is it the fact that it is succession relating to succession to property which attracts the duty?

"Succession" is here used in the broad, general sense.

The only duty it attracts is succession duty?

Estate duty as well.

Not if it is succession.

This is the law relating to succession to property.

The Resolution states:

That estate duty, legacy duty and succession duty shall be payable having regard to the provisions in relation to the distribution of property contained in any Act of the present session to reform the law relating to succession to the property of deceased persons and, in particular, the devolution, administration, testamentary disposition and distribution on intestacy of such property, and to provide for related matters.

This is a taxing Resolution the Minister is moving. I direct the attention of the House to the fact that it is duty arising from the provisions contained in the bill relating to the distribution of property as they relate to succession to property. That is succession duty. It is the duty which attaches to property passing on death. Legacy duty we know. Succession duty is where succession is claimed.

Succession in that case is not related to the duty. I am merely quoting the Long Title of the Bill. This is a Bill to reform the law relating to succession. I am speaking of succession in the broad sense rather than the narrow meaning relating to succession duty.

If that is so, why is it necessary?

I am merely quoting the Long Title of the Bill. This is much ado about nothing.

Resolution put.
The Dáil divided:— Tá, 65; Níl, 44.


  • Aiken, Frank.
  • Allen, Lorcan.
  • Andrews, David.
  • Blaney, Neil T.
  • Boland, Kevin.
  • Booth, Lionel.
  • Boylan, Terence.
  • Brady, Philip.
  • Brennan, Joseph.
  • Brennan, Paudge.
  • Breslin, Cormac.
  • Briscoe, Ben.
  • Burke, Patrick J.
  • Calleary, Phelim A.
  • Carter, Frank.
  • Carty, Michael.
  • Childers, Erskine.
  • Clohessy, Patrick.
  • Colley, George.
  • Collins, James J.
  • Corry, Martin J.
  • Cotter, Edward.
  • Crinion, Brendan.
  • Cronin, Jerry.
  • Crowley, Flor.
  • Crowley, Honor M.
  • Cunningham, Liam.
  • Davern, Don.
  • de Valera, Vivion.
  • Dowling, Joe.
  • Egan, Nicholas.
  • Fanning, John.
  • Faulkner, Pádraig.
  • Fitzpatrick, Thomas J.
  • (Dublin South-Central).
  • Foley, Desmond.
  • Gallagher, James.
  • Geoghegan, John.
  • Gibbons, Hugh.
  • Gibbons, James M.
  • Gilbride, Eugene.
  • Gogan, Richard P.
  • Haughey, Charles.
  • Healy, Augustine A.
  • Hilliard, Michael.
  • Kenneally, William.
  • Kennedy, James J.
  • Kitt, Michael, F.
  • Lemass, Noel T.
  • Lemass, Seán.
  • Lenihan, Brian.
  • Lenihan, Patrick.
  • Lynch, Jack.
  • McEllistrim, Thomas.
  • Meaney, Tom.
  • Millar, Anthony G.
  • Molloy, Robert.
  • Mooney, Patrick.
  • Moore, Seán.
  • Nolan, Thomas.
  • Ó Briain, Donnchadh.
  • Ó Ceallaigh, Seán.
  • O'Connor, Timothy.
  • O'Malley, Donogh.
  • Smith, Patrick.
  • Wyse, Pearse.


  • Barrett, Stephen D.
  • Barry, Richard.
  • Belton, Luke.
  • Belton, Paddy.
  • Burke, Joan T.
  • Burton, Philip.
  • Byrne, Patrick.
  • Clinton, Mark A.
  • Collins, Seán.
  • Coogan, Fintan.
  • Cosgrave, Liam.
  • Costello, Declan.
  • Costello, John A.
  • Creed, Donal.
  • Crotty, Patrick J.
  • Dillon, James M.
  • Dockrell, Henry, P.
  • Dockrell, Maurice E.
  • Donegan, Patrick S.
  • Donnellan, John.
  • Dunne, Thomas.
  • Farrelly, Denis.
  • Fitzpatrick, Thomas J. (Cavan).
  • Flanagan, Oliver J.
  • Gilhawley, Eugene.
  • Governey, Desmond.
  • Harte, Patrick D.
  • Hogan, Patrick.
  • (South Tipperary).
  • Hogan O'Higgins, Brigid.
  • Jones, Denis F.
  • Kenny, Henry.
  • L'Estrange, Gerald.
  • Lindsay, Patrick J.
  • Lynch, Thaddeus.
  • Lyons, Michael D.
  • Murphy, William.
  • O'Donnell, Patrick.
  • O'Donnell, Tom.
  • O'Hara, Thomas.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F.K.
  • Reynolds, Patrick J.
  • Ryan, Richie.
  • Sweetman, Gerard.
Tellers: Tá: Deputies Carty and Geoghegan; Níl: Deputies L'Estrange and Clinton.
Question declared carried.
Resolution reported and agreed to.