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Encyclopedia Britannica - Main :: STE-SUS |
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SUCCESSION DUTY , in the English fiscal system, " a tax placed on the gratuitous acquisition of property which passes on the death of any person, by means of a transfer from one person (called the predecessor) to another person (called the successor)." In order properly to understand the present state of the English law it is necessary to describe shortly the state of affairs prior to the Finance Act 1894an act which effected a considerable change in the duties payable and in themode of assessment of those duties.The principal act which first imposed a succession duty in England was the Succession Duty Act 1853. By that act a duty varying from r to to % according to the degree of con-sanguinity between the predecessor and successor was imposed upon every succession which was defined as " every past or future disposition of property by reason whereof any person has or shall become beneficially entitled to any property, or the income thereof, upon the death of any person dying after the time appointed for the commencement of this act, either immediately or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation and every devolution by law of any beneficial interest
any other person in possession or expectancy." The property which is liable to pay the duty is in realty or leasehold estate in the United Kingdom and personaltynot subject to legacy dutywhich the beneficiary claims by virtue of English, Scottish or Irish law. Personalty in England bequeathed by a person domiciled abroad is not subject to succession duty. Successions of a husband or a wife, successions where the principal value is under ioo, and individual successions under 20, are exempt from duty. Leasehold property and personalty directed to be converted into real estate are liable to succession, not to legacy duty. Special
assessment . The duty is by this act directed to be assessed as follows: on personal property, if the successor takes a limited estate, the duty is assessed on the principal value of the annuity
annuity
interest
capital value of an annuity equal to the annual value of the property. Various minor changes were made. By the Customs and Inland Revenue Act 1881, personal estates under 300 were exempted. By the Customs and Inland Revenue Act 1888 an additional 1% was charged on successions already paying 1% and an additional 11% on successions paying more than 1%. By the Customs and Inland Revenue Act 1889 an additional duty of 1% called estate duty was payable on successions over to,000.The Finance Acts 1894 and 1909 effected large changes in the duties payable on death (for which see ESTATE DUTY; LEGACY). As regards the succession duties they enacted that payment of the estate duties thereby created should include payment of the additional duties mentioned above. Estates under l000 (2000 in the case of widow or child of deceased) are exempted from payment of any succession duties. The succession duty payable under the Succession Duty Act 1853 was in all cases to be calculated according to the principal value of the property, i.e. its selling value, and though still payable by instalments interest at 3% is chargeable. The additional succession duties are still payable in cases where the estate duty is not charged, but such cases are of small importance and in practice are not as a rule charged. United States.The United States imposed a succession duty by the War Revenue Act of 1898 on all legacies or distributive shares of personal property exceeding $ro,000. It is a tax on the privilege of succession. Devises or distributions of land are not affected by it. The rate of duty runs from 75 cents on the Poo to $5 on the $loo, if the legacy or share in question does not exceed $25,000. On those of over that value the rate is multiplied 11 times on estates up to $ioo,000, twofold on those from $ioo,000 to $ 00,000, 21 times on those from $500,000 to a million, and threefold for those exceeding a million. This statute has been supported as constitutional by the Supreme Court. Many of the states also impose succession duties, or transfer taxes; generally, however, on collateral and remote successions; sometimes progressive, according to the amount of the succession. The state duties generally touch real estate successions as well as those to personal property. If a citizen of state A owns registered bonds of a corporation chartered by state B, which he has put for safe keeping in a deposit vault in state C, his estate may thus have to pay four succession taxes, one to state A, to which he belongs and which, by legal fiction, is the seat of all his personal property; one to state B, for permitting the transfer of the bonds to the legatees on the books of the corporation ; one to state C, for allowing them to be removed from the deposit vault for that purpose; and one to the United States.End of Article: SUCCESSION DUTY If you wish, you can link directly to this article.
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