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Wednesday, 20 May 1942

Mr BECK - Will life assurance companies, under this amendment, be obliged to withhold payment until probate is obtained ?

Mr HOLT - I do not know how the Treasurer proposes to arrange for that. An estate of £100,000 might include a life assurance policy for £20,000. The total duty payable on the estate will be nearly £40,000. If the wife were paid the £20,000 under the life assurance policy, she might be able to dispose of it, or invest it unwisely. Any one of a number of things could happen to the money in the period during which the duty was being calculated and collected by the

Taxation Department. For that reason, I assume that the same restriction would be placed upon dealing with that money as that which would normally apply to any other asset of the estate. If the money were withheld, the object that th<* husband had in making provision for his wife to have ready cash immediately after his demise would be defeated. I ask the Treasurer to enlighten the House upon this matter. In the absence of any advice from him to date, I suggest that he should examine the possibility of exempting a portion of the proceeds of a life assurance policy in order to provide for the immediate needs of the widow. I understand that some formula has been evolved so that premiums which were paid prior to the enactment of this legislation will not be taken into account when the Taxation Department calculates the value of the estate for taxable purposes. But that does not deal with the point to which I have directed attention.

Mr Prowse - -Does the honorable member mean that the legislation will not have a retrospective effect?

Mr HOLT - That appears to be the intention of the Treasurer; all future premiums paid by the husband upon a life assurance policy drawn in favour of his wife will be regarded as being a part of his estate.

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