The Customs and Inland Revenue Act, 1881, provides that in respect of any legacy, residue, or share of residue, payable out of or consisting of any estate or effects, where duty has been paid on the affidavit or inventory, or account, the one per cent. legacy or succession duty shall not be payable (44 Vict. c. 12, s. 41). The effect of this is that personal estate passing to children of the deceased and their descendants, or to or for the benefit of the father or mother or any lineal ancestor of the deceased, is exempt from legacy or succession duty, if probate or administration duty has already been paid under the Act of 1881, but not otherwise. The liability of legacies to duty has been made the subject. of consideration in several recent cases. Legacies of " a clear annuity" (1), and of "clear sums" were held to be free of legacy duty (2), but legacies of full salaries to clerks and workmen were held not to be free (3). It was held that a nomination by will for the benefit of the customs and annuity fund was not a legacy, and accordingly not liable to legacy duty, but was held liable to succession duty (4). A legacy for masses for the repose of the testator's soul was held not to be exempt from legacy duty (5). It was formerly not unusual to avoid payment of legacy duty by leaving legacies of nineteen guineas. Sect. 42 of the Act of 1881, however, now provides that "every pecuniary legacy or residue, or share, of residue, under the will, or the intestacy of a person dying on or after the 1st of June, 1881, although not of an amount or value of £20, shall be chargeable with duty." The Succession Duty Act, 1853, for the first time imposed a death duty on succession to real estate. This duty varies according to the degree of relationship in which the person succeeding to the property stands to the person to whom he succeeds. The Act provides the following definitions of the terms "succession," ," "successor," and "predecessor." Every past or future disposition of property whereby any person becomes entitled to property on the death of any person dying after the commencement of the Act, and every devolution by law of any beneficial interest in property or income upon the death of a person dying after that time, is to be deemed to () Nelson v. Robins, 58 L. T. 282. (2) Re Currie, W. N. (1888) 154. (3) Marcus v. Marcus, 57 L. T. 407. (4) See Attorney-General v Abdy, 1 H. & C. 266 (3) Perry v. 480. Turney, 21 L. R. Ir. Succession duty. Estate duty. confer on the person entitled, by reason of such disposition or The Act also provides (inter alia) that the beneficial interest accruing to a joint-tenant by survivorship is to be deemed a "succession." Any person exercising a general power of appointment, is to be deemed to be entitled to the property appointed as a succession, derived from the donor of the power; and any person taking by exercise of a limited power of appointment, to be deemed to take the same as a succession, derived from the person creating the power (see, as to Powers, post, p. 176). The increase of benefit accruing to any person upon the extinction of an annual charge, by death of the life tenant of the charge, is to be deemed a succession. The rate of succession duty payable under the Act of 1853 was increased by the Customs and Inland Revenue Act of 1888, which also introduced changes as to the mode in which the duty was payable, and in some other respects (1). By the Customs and Inland Revenue Act, 1889 (2), purchasers for value and mortgagees are exempted from liability after the time specified by its 12th section. The "estate duty," an additional duty payable in respect of personal estate and succession to real and personal property exceeding £10,000, was introduced by the Act of 1889 (3). Before taking leave of the subject of wills the attention of the reader may be directed to the essential distinction between a deed and a will. "The distinction between a deed and a will," said ViceChancellor Bacon, "is a very palpable one. A deed is a contract by which the owner of property gives a certain destination to it then and thenceforth for ever, and he parts with all his power over it. A will is an instrument which is not to take effect till the death of the testator" (4). (1) See the Customs and Inland Revenue Act, 1888 (51 Vict. c. 8), 88. 21, 22. (2) The Customs and Inland Revenue Act, 1889 (52 Vict. c. 7), s. 10, et seq. (3) 52 Vict. c. 7, s. 5. The reader who desires further information on the subject of the death duties is referred to Mr. Hanson's works on these subjects; Mr. Gosset's Practical Guide, &c., and a valuable synoptical table on the English death duties by Mr. E. Harris, of the Legacy and Succession Duty Department, Somerset House. () Per Vice-Chancellor Bacon: Olivant v. Wright, 9 Ch. D. 646, 650. (175) CHAPTER XIV. POWERS. Powers may be described generally as authorities to dispose Definition of powers. of or deal with property real or personal, or to nominate others so to do, such authorities being either reserved by the owners of property to themselves or given to others, with or without an estate or interest in the subject-matter on which the power is to operate (). A power of appointment is a power of disposition given to a person over property not his own, by some one who directs the mode in which that power shall be exercised by a particular instrument (2). A kinds of powers. Powers when considered with reference to their origin are Different either (1) Common Law Powers; (2) Equitable Powers; or (3), such as derive their efficacy from the Statute of Uses. common law power, for example, a devise by a testator that his executors should sell his land, enables the donees of the power, who themselves take no estate, to pass the legal estate to the purchaser. Again, Lord St. Leonards tells us: "A power given by a will or by an Act of Parliament to sell an estate is a common law authority. The estate passes by force of the will, or Act of Parliament, and the person who executes the power merely nominates the person to take the estate" (3). Equitable powers arise where the legal interest is properly vested in one or more, but a power of disposing of the beneficial interest is in some other person. Powers operating under the Statute of Uses are powers of revoking existing, or declaring future uses vested in some person named for that purpose in the deed by which the uses to be affected by the operation of the power are created (4). An instance of this would be if an estate were conveyed by a deed dated 1860 to A. B. and his heirs to the use of C. D. for life, with remainder to such uses as E. F. should appoint, and in (1) Watson's Compendium Equity, 843. of 3) Per Jessel, M.R., in Freme v. Clement, 18 Ch. D. 499. (3) Sugden on Powers, p. 196, 8th edition. (*) Farwell on Powers, pp. 1-3. Different classes of powers. default of appointment to the use of C. D. and his heirs. Suppose now that E. F. should by deed in 1880 appoint the estate to G. H. In that case the appointment effected by the deed of 1880 would take effect just as if the grant to G. H. had been inserted in the deed of 1860. Powers when considered with reference to the persons by whom they are to be exercised, are of three classes. These are: 1. A power simply collateral, i.e. a power given to a person who has no interest whatever in the property over which the power is given, e.g. where executors have a power to sell land. 2. A power in gross, i.e. a power given to a person who has an interest in the property over which the power extends, but such an interest as cannot be affected by the exercise of the power. The most familiar instance is that of a tenant for life with a power of appointment after his death. 3. A power appendant or appurtenant, i.e. a power exercisable by a person who has an interest in the property, which interest is capable of being affected, diminished, or disposed of to some extent by the exercise of the power, e.g. power of a tenant for life to grant leases (1). Powers are also divided into "general" and "special"; or, as they are sometimes called, "invested" or "particular" powers. A power is general (2) when there is no restriction as to the persons in favour of whom, or the purposes for which, the power may be exercised. It is special or particular where it is exercisable only in favour of some particular person or persons, or for some specified purpose. Thus a power to appoint to whom the donee pleases is a general power. A power to appoint among the children of a particular person is a special power (3). When a person possesses a general power he is regarded as in the position of an absolute owner, and with reference to the rule against perpetuities time is reckoned from the date of the instrument executing the powers. In the case of a special power on the other hand, the rule against perpetuities applies (') Tudor's Real Property, p. 377, 3rd ed., following the classification given by Chief Baron Hale, in Edwards v. Slater. The division of power is sometimes made as follows, viz. : Powers are either 1, Powers simply collateral; or 2, Powers not simply collateral; and powers not simply collateral are sub-divided into, first, powers appendant and annexed to the estate; secondly, powers in gross: Tudor's Real Property Cases, ubi supra. (2) A general devise or bequest operates as an execution of a general power, unless "contrary" intention appears: 1 Vict. c. 26. s. 27; see as to effect of codicil, Re Blackburn, 43 Ch. D. 75. (3) Sugden on Powers, p. 394; Farwell on Powers, p. 7. from the date of the instrument creating the powers, and the time is reckoned as commencing from the date of the instrument creating it if a deed, or the death of the testator in the case of a will. It should also be borne in mind that if the power assume to enable the donee to transgress the rule against perpetuities, and he exercises the power within due limits, the exercise is valid (1). 1883. The Bankruptcy Act, 1883 (2) (sect. 44), comprises in the Bankproperty divisible among the bankrupt's creditors, the capacity ruptcy Act, to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the bankrupt for his own benefit at the commencement of his bankruptcy, or before his discharge, except the right of nomination to a vacant ecclesiastical benefice. Where a general power of appointment is exercised by will, the property is rendered assets for payment of debts (3). for creation There are three requisites to the valid creation of a power: Requisites namely, (1) sufficient words to denote the intention; (2) an apt instrument; and (3), a proper object (4). But no technical or express words are necessary, either in a deed or in a will, to create a power, if the intention be clear (5). A power may be exercised excessively. (1) With regard to the objects, i.e. when persons are included who were not contemplated in the creation of the power. For instance, in the leading case of Alexander v. Alexander (6), it was decided that under a power to appoint among children an appointment to grandchildren was invalid. It was decided, however, in the same case that such an exercise of the power would be valid, if made with concurrence of the true object of the power, e.g. if upon marriage of a child, a parent with power to appoint amongst children, only appointed, with the consent of the child, to the intended husband and issue of the marriage, such an arrangement being regarded as first an appointment, and then a resettlement by the object of the power. (2) With regard to the amount of the subject appointed. (3) Where conditions (1) See Whitby v. Mitchell, 42 Ch. D. 494; affirmed 44 Ch. D. 85. (2) 46 & 47 Vict. c. 52, and see Nichols to Nixey, 29 Ch. D. 1005, where it was held that a trustee could not exercise the power after the debtor's death. (3) Fleming v. Buchanan, 3 De G. M. & G. 976, and see as to married women : Re Harvey, 13 Ch. D. 216; Hodges v. Hodges, 20 (4) Sugden on Powers, p. 102. Excessive exercise of power. VOL. I. N |