LEGACY DUTY AND SUCCESSION DUTY. In the British fiscal system, gratuitous acquisitions of property tak ing place by reason of the death of an individual are charged to legacy duty or succession duty. These two duties, which are in reality complementary to one another—a fact which arises out of the history of their imposition (see ESTATE DUTIES)—to gether form that class of British death duties which is in the nature rather of an acquisition duty on a beneficiary than (as in the case of the estate duty) of a transfer duty on property.
All moveable property, wheresoever situate, devolving under the will or intestacy of an individual dying domiciled in some part of Great Britain is liable to legacy duty. The moveable property, wheresoever situate, of a testator or intestate dying domiciled out of Great Britain is not liable to that duty.
All settled moveable property, wheresoever situate, not liable to legacy duty, of which property the forum of administration is in some part of Great Britain, is liable to succession duty. Settled moveable property which is the subject of a non-British trust is not liable to that duty.
All immoveable property which is situate in Great Britain is liable to succession duty, regardless either of the domicile of the testator, intestate or settlor, or of the beneficiary. But immove able property situate out of Great Britain, devolving as such, is not liable to succession duty in any circumstances.
Rates of Duty.—The current scale of rates of legacy duty and succession duty is as follows:— The rates both of legacy duty and succession duty are thus regulated according to the degree of relationship, or the absence of relationship, between the beneficiary and the deceased. Both duties are, speaking generally, payable when the beneficiary be comes entitled to the enjoyment of the benefit, or when the sub ject matter of the gift is appropriated to him, but in certain cir cumstances both duties may be paid by instalments extending, in the case of real property, to a maximum period of eight years. The precise manner in which the value of the benefit is to be determined is specified by the various acts imposing and governing the duties, these acts containing provisions for determining the value of annuities, of legacies to be enjoyed in succession, of interests for life, and of other benefits of a peculiar nature.
Certain exemptions and reliefs common to both legacy duty and succession duty are provided, of which the most important are as follow :— (a) No legacy duty is chargeable when the gross value of the per sonal estate is under hoc ; and no succession duty is chargeable when the principal value of all the successions derived from the same prede cessor and passing on any death is under Lioo.
(b) Neither duty is chargeable on benefits arising under the will or intestacy of an individual on whose death the net value of the property passing in respect of which estate duty is payable (exclusive of property settled otherwise than by that individual's will) does not exceed ii,000.
(c) Individuals chargeable at the I% rate of duty (see table) are exempted from both duties when: (i.) The principal value of the property passing on the death of the deceased in respect of which estate duty is payable (exclusive of property in which the deceased never had an interest, or of property of which he was never competent to dispose and which on his death passed to individuals other than the spouse, or lineal ancestor or descendant, of the deceased) does not exceed £55,000: or (ii.) The value of the benefit together with that of any other benefits derived by the same individual from the testator, intestate, or predecessor, does not exceed Li,000, whatever may be the prin cipal value of the property passing on the death of the deceased ; or (iii.) The beneficiary is the widow or child under the age of 21 years of the testator, intestate, or predecessor, and the value of the benefit, together with that of any other benefits derived by the same individual from the same testator, intestate, or predecessor, does not exceed i2,000, whatever may be the principal value of the property passing on the death of the deceased.
(d) When the net value of the property in respect of which estate duty is payable (exclusive of property settled otherwise than by the will of the deceased) exceeds ii,000, the amount of legacy duty and succession duty payable in respect of the property is not to exceed the amount by which the net value of the property as estimated for the purpose of estate duty exceeds .1 z,000.
(e) Neither duty is chargeable in respect of objects not yielding any income (e.g., furniture, jewellery, etc.) given so as to be enjoyed by different persons in succession, whilst the same are so enjoyed. Duty becomes payable, however, if and when the same are disposed of.
(f) The duties are only chargeable in the case of objects which are deemed to be of national, scientific, historic, or artistic interest when the objects are sold, and then only in connection with the last death on which they passed. But complete exemption is afforded when the sale is to a national institution.