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Wednesday, 27 May 1942

Senator KEANE ("Victoria) (Minister for Trade and Customs) .- I move -

That the hill lie now read a second time.

When the bill to amend the rates of estate duty was before the Parliament last year, the Government undertook to give consideration to the question of amending the principal act by giving an exemption from estate duty in respect of the estates of members of the forces killed on active service where the value of the estate was less than £5,000. As the result of that consideration, the Government has decided that the provision should be made more liberal. Its proposals have been considered by the special committee of members of all parties which, after recommending an increase of the period mentioned in the provision from one year to three years, agreed that the proposals of the Government were reasonable in the circumstances. The amendment provides that, instead of the present exemption of estates not exceeding £5,000 in value, there shall be inserted into the act a provision giving a deduction of £5,000 in respect of the estates of members of the forces killed on active service, irrespective of the total value of the estate. In addition, if the property of a member so killed again becomes subject to duty due to a second death on active service, the whole of the estate duty otherwise payable on that property upon the second death will be remitted. As the question of whether a person who dies subsequent to the termination of the war and within three years thereafter has died as a result of injuries received, or disease contracted, on active service, may be one of considerable difficulty, a provision has been inserted that that question, when in doubt, shall be settled upon a certificate given by the authority under the Australian Soldiers' Repatriation Act which is to consider and settle the question for the purposes of that act.

The opportunity afforded by the necessity to amend the principal act for the purpose already discussed, has been taken to make the act a more efficient machine for the collection of revenue than it has been in the past. Some of the resultant amendments are more or less machinery provisions to simplify the administration of the act. Most of these extend to executors, benefits in regard to rights of objection and appeal that do not exist under the principal act as it is now framed. Other provisions are for the direct purpose of closing up loopboles which exist in the present legislation. Amongst the last mentioned is a provision ensuring that the proceeds of policies on the life of the deceased, payable to the members of his family and not previously liable to estate duty under the principal act, shall now form part of his estate and be so liable. However, it is not proposed to make this provision retrospective by making it apply unreservedly to all policies now in existence. It will, of course, apply unreservedly to all policies taken out after the commencement of this act; but in regard to policies already in existence it will apply only to the portion of the proceeds which may be said to accrue as from this date onwards. This is done by providing for a deduction, from the proceeds of such a policy, of the present value of the policy as at the commencement of this provision. The result will be to make only the excess of the total proceeds over the present value liable to duty. The present value is to be ascertained by ascertaining what amount would, if invested at the commencement of the act, equal the total proceeds of the policy as at the date of death. This will mean that the present surrender value of the policy will not be liable to duty.

It is proposed to insert in the principal act a provision giving the Commissioner power to value the shares of private companies without regard to the artificial restrictions sometimes contained in the articles of association of such companies regarding the transfer of shares or the ascertainment of the value of the shares. This provision has been taken from the Stamp Duties Act of New South "Wales, where it has been in force for some time in connexion with the valuation of such shares for probate duty purposes and has, I am advised, been working with satisfaction to "all parties. In the New South "Wales act, the provision is mandatory, but the committee which considered the clauses of this bill believed that it should be made discretionary so that it will be used only in those cases in which its use is justified by the circumstances.

The bill amends the principal act by including a provision extending the present rights of the Commissioner to amend assessments and the present rights of administrators to have assessments amended. The principal act at present provides that amendments shall be made only within twelve months of the date of payment of duty on the original assessment with a proviso that under certain circumstances this period may be extended to eighteen months. It has been decided to bring this act into line with other taxation acts and give rights of amendment within three years of the date of payment of the duty or, if the Commissioner is of the opinion that duty has been avoided and that such avoidance is due to fraud or evasion, at any time.

Under the present act, an executor has no right of appeal from the decisions of the Commissioner other than to the Supreme Court of a State or the High Court of Australia, sometimes an expensive procedure. It has been decided, therefore, to provide for a right of reference to a valuation board on the question of the values of assets in the estate, and to a board of review on any other question with, of course, right of appeal to the courts from the decisions of the Commissioner or these boards if the executor desires to have the matter decided by a legal tribunal.

There is also a provision in the bill extending the time from one year to three years within which gifts, inter vivos, made by the deceased, form part of his estate. This also brings the principal act into line with the provisions of the New SouthWales Stamp Duties Act regarding probate duties.

Amongst the minor amendments being made is an amendment of section 18a of the principal act, which relates to the statutory exemption; to give more appropriate expression to the intention and to prevent an anomaly which arose under the present provision in regard to estates, the values for duty of which were between £1,000 and £2,000. There is another slight amendment of the present provision giving exemption to bequests to certain funds which might be collectively described as charitable funds, so that bequests which establish such funds shall also be exempt. Another amendment is concerned with section 35 of the principal act, which gives power as executors to apportion the duty between the beneficiaries and the estate. That provision excludes from such apportionment bequests which pass to institu tions or for purposes which render the bequests exempt from duty under the provisions of sub-section 5 of section 8 of the principal act. There was a discrepancy between the wording of the two sections which rendered section 35 somewhat difficult of interpretation. This discrepancy is being removed.

Debate (on motion bySenator A. J. McLachlan) adjourned.

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