Hamilton v Linaker

• Jurisdiction: Ireland
• Judgment Date: 27 March 1923
• Date: 27 March 1923
• Court: Chancery Division (Irish Free State)

Ch. Div. (I. F. S.)

Hamilton v. Linaker

In the MATTER of ELLIS JONES, Deceased. EDWARD HAMILTON and Others

Plaintiffs

and

ELLIS EDWARD LINAKER and MARY BEATRICE HUGHES, Defendants. And by Order to Proceed, EDWARD HAMILTON and WALTER WILLIAM HUGHES, Plaintiffs, v. THE PUBLIC TRUSTEE in England and ELLIS EDWARD LINAKER and MARY BEATRICE HUGHES, Defendants (1)

Practice - Administration - Interest on legacies - Deduction of income tax from interest.

Action for the administration of the estate of Ellis Jones, deceased.

The subject-matter of this report arose on the motion for allocation of the funds in Court. The funds in Court amounted to £32,527 11s. 1d. cash, £4,210 9s. 8d. Five per cent. War Loan, and £10,392 18s. 4d. Four per cent. War Loan. In part 3 of the allocation account the various legacies payable were set out. These were ten in number, and on each interest for eighteen months at the current rate was payable. The Public Trustee and Walter William Hughes, executors of Mrs. Louisa Anne Jones, deceased, were entitled to the residue. No deduction was made by the Chief Clerk in respect of income tax from the interest on the legacies set out in part 3 of the allocation account, and the Chief Clerk stated that in not making such deduction he was following the practice of the Court. The interest on the legacies in part 3 of the allocation account amounted to £1,060, and at the current rate of 5s. in the pound the income tax on this sum would amount to £465. The Public Trustee, as entitled to the residue, contended that income tax at the current rate should be deducted from the interest on the legacies. The arguments of counsel and the authorities cited appear sufficiently in the judgment.

Executors are entitled to deduct out of interest payable to legatees income-tax assessed on such interest at the current rate.

Pim J. :—

This is an administration action, and the estate to be administered is almost wholly composed of stocks and shares in various companies. The testator bequeathed varying and large sums to several legatees, and he nominated a residuary legatee.

Owing to the exigencies of the administration, it was impossible to pay the legacies at the end of a year from the testator's death, and at the end of that year the various legatees became entitled under Order 55, rule 68, to receive 4 per cent. per annum on their several legacies. The executors have from time to time received the interest on the testator's stocks and shares, less by income tax, which was deducted at the source. As a result, the share coming to the residuary legatee will be cut down by a large sum, the amount of the said tax.

The rule under which the 4 per cent. is paid runs as follows:"Where a judgment or order is...