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Annuities

stock, land, bank, annuity, charged, cent, dividends, consols and security

ANNUITIES Charged on Land.—An annuity charged on land is a right to share to a defined extent in the profits of land belonging to another. Such an annuity is technically called an incorporeal hereditament, and is held under the same tenure and in the same way as land itself. It must be created by deed, which should be registered at the Land Registry, in order to bind the land upon which the annuity is charged. But an annui ty created by a will or by a marriage settlement need not be registered. If an annuity created by deed is unregistered, and the land upon which it was charged is sold to a purchaser who has no notice thereof, the purchaser would be entitled to the land free from the annuity. In case of non-payment, the annuitant may either sue the person who in the deed covenants for its payment, or distrain upon the land. A properly drawn deed should contain full powers and directions for their execution in case of need. If the annuity is perpetual, a power to distrain would under certain circumstances be invalid as offending against the rule against PERPETUITIES (q.v.). Purchasers of such annuities should be careful as to this, especially in the case of that form of perpetual annuities known as fee-farm rents ; and very common in Lancashire and Manchester and Bristol and Bath, and in the West of England generally. The main difference between an ordinary personal annuity and one charged on land, is that the latter affords the land as security for payment, in much the same way as land is available by distress as security for payment of rent.

The chief forms of annuities not charged on land are consols, or to give them their full title, consolidated bank annuities ; and annuities granted by insurance offices. We will deal with the latter first. They are simply personal annuities with no security other than that afforded by the insurance companies granting the annuity. In most cases, however, that security is all that any reasonable man may wish. Before investing in such an annuity, the intending annuitant may easily decide upon an office, which after investi gation will show a more than sufficient security. In the same way, consols a"e personal, but perpetual, annuities. They are granted by the Crown as interest for money borrowed for national purposes, redeemable upon repay ment; and payment of the interest is charged upon the consolidated fund. The interest is payable half-yearly and is known as a dividend. The right to the dividends is called stock, or stock in the funds, and the legal incidents relating thereto are contained in certain Acts now consolidated by the National Debt Act, 1870. Some practical points in relation to stock may be here set out. Dividends are paid at and all transfers made in the books of the Bank of England or of Ireland. The bank may demand evidence of title before allowing a transfer. A deceased stockholder's interest is transferable by his

executors or administrators, after the bank has seen and registered the pro bate of the will or the letters of administration. It makes no difference w hat trusts or bequests there may be in a will relating to the stock, the executors and administrators alone may transfer. So the bank itself has no regard to any trusts upon which the persons registered may holil the stock. Stock so held is known as inscribed stock, and may be ponverted into bonds payable to bearer, and transferable by delivery. Persons wishing to prevent the transfer of stock must do so by the process of DISTRINGAS (q.v.); and if they wish to take stock in execution of a judgment, it must be by way of a charging order. See EXECUTION.

In the case of inscribed stock, the holder has his whole title thereto in the inscription of his name upon the books of the bank. It may be dealt with in any amounts ; such as LI 00 worth, or £10, or i'33, 5s. 1(1. worth. A person who is already a holder of stock may, instead of taking up his dividends, have them, even though of small amount, inscribed as a further holding of stock. Cheques for dividends are sent by post to the holder, or to his banker, as he may direct. A transfer of inscribed stock is by means of inscription on the books of the banks of the signatures of the transferer and the transferee. A broker may, however, do this if he has a power of attorney from his client. Bonds to bearer are very different. Ths bank does not regard who the holder may be. Attached to the bonds are dividend coupons; it is in exchange for these that the dividends are paid ; and they may be sent to a banker or broker for collection. The net effect of the form of a bond to bearer is to make it a negotiable instrument. It is, in fact, as available for negotiation and trans fer as a bank note. Like a bank note, the consequences of its being stolen or lost may be serious. Its number should therefore be kept. And like a bank note, it can only be dealt in as a whole ; if it is a £100 bond, it cannot, for example, be broken up into and dealt with as two securities for £50 each. Generally, consols have had their interest reduced from per cent. to 21 per cent, after April 1903, the stock not being redeemable until 1923. In addi tion to consols there is also a considerable amount of 21 per cent. annuities, and minor loans such as the Local Loans Stock, the War Loan, and Ex chequer Bonds. The Local Loans Stock is at 3 per cent. ; and the War Loan is a temporary 21 per cent. stock redeemable in 1910. These latter minor securities, it need hardly be added, are as valuable as consols strictly so-called. See further hereon : MONEY ARTICLE ; STOCK EXCHANGE.