Re Finance Act of 1894 and Deane

• Jurisdiction: Ireland
• Judgment Date: 01 April 1936
• Date: 01 April 1936
• Docket Number: (1933. No. 82. (Revenue).)
• Court: High Court (Irish Free State)

In re Finance Act, 1894, and Deane.

In the Matter of the FINANCE ACT, 1894, and in the Matter of a POLICY OF ASSURANCEeffected by JOHN BARRY DEANE, Deceased, on his own life with the Scottish Amicable Life Assurance Society (1)

(1933. No. 82. (Revenue).)

High Court.

Revenue - Estate duty - Policy of life assurance effected with a Scottish company - Insured domiciled in the Irish Free State - British estate duty paid on the proceeds of the policy - Irish Free State estate duty paid under protest - Whether estate duty payable in Great Britain or in the Irish Free State - Situs of a debt due on a specialty - Double Taxatiou (Relief) Act,1923 (No. 8 of 1923) - Double Taxation (Relief) Order (No. 1), 1923,Part II (c) - Finance Act, 1894 (57 & 58 Vict. c. 30) sects. 1, 6, 8,sub-sects. 16 and 17 - Customs and Inland Revenue Act, 1862 (25 & 26Vict. c. 22), sect. 39.

J. B. D. was domiciled in the Irish Free State and held a policy of assurance on his life with the Scottish Amicable Life Assurance Society, a society incorporated by statute and having its registered office at Glasgow. J. B. D. died on the 2nd April, 1931, at which date the said policy was situate in the Irish Free State. On the death of J. B. D. the Commissioners of Inland Revenue in Great Britain claimed, and were paid, estate duty on the proceeds of the policy. The Irish Free State Revenue Commissioners also claimed estate duty which was paid under protest, the Irish Commissioners having refused to make any allowance under the Double Taxation (Relief) Order (No. 1), 1923, in respect of the duty so paid in Great Britain. The Irish Commissioners based their refusal on the ground (inter alia) that the said policy was a specialty, physically located in the Irish Free State at the date of the death of J. B. D. within the meaning of the Double Taxation (Relief) Order (No. 1), 1923, Part II (c), and accordingly that estate duty was payable in the Irish Free State and not in Great Britain.

Held that the debt due on the said policy was a debt due on a specialty situate in the Irish Free State according to the laws in force in England and Ireland on the 6th December, 1922 (the date upon which any question as to whether any property is to be treated for the purpose of double taxation relief as situated in Great Britain or in the Irish Free State is to be determined under the Double Taxation (Relief) Order (No. 1), 1923); that no duty was payable thereon in Great Britain and that the Revenue Commissioners of the Irish Free State were right in refusing to make an allowance in respect of the estate duty paid to the Commissioners of Inland Revenue in Great Britain.

Petition.

This petition, dated the 21st day of August, 1933, was brought by Althea Paul Deane and Marjorie Wingad, the executors of the will of John Barry Deane, who died on the 2nd April, 1931, and probate of whose will was granted to the petitioners on the 16th June, 1931, forth of the Principal Probate Registry of the High Court of Justice, Saorstát Éireann éireann. The petition was as follows:—

"1. Your petitioners are the legal personal representatives of the above-named John Barry Deane, late of Bandon

in the County of Cork, solicitor, who died on the 2nd day of April, 1931.

2. The said John Barry Deane on the 10th day of February, 1910, effected a policy of assurance on his own life for the sum of £500 with profits with the Scottish Amicable Life Assurance Society (hereinafter referred to as 'the Insurance Society') subject to the annual premium of nineteen pounds ten shillings during the life of the said John Barry Deane up to the thirty-first day of January One thousand nine hundred and thirty-four inclusive.

3. The said policy was executed on behalf of the insurance society at Glasgow, and it was thereby provided that the executors, administrators or assigns of the said John Barry Deane should be entitled to receive out of the stock and funds of the insurance society after his death the sum of Five hundred pounds with additions as therein provided.

4. The Insurance Society is incorporated by 12 & 13 Vict. c. XXII and sect. 4 of the said Act provides that the business of the society should be carried on in a place of business within the City of Glasgow, which should be the principal office of the Society. The society has its registered head office at 35 St. Vincent Place, Glasgow, Scotland. The premiums payable under the said policy and the moneys payable thereunder were properly payable and recoverable at the said office in Glasgow.

5. The said John Barry Deane paid the premiums on the said policy up to the date of his death on the 2nd day of April, 1931, at St. Mary's, Bandon, in the County of Cork. Probate of the last will of the said John Barry Deane was, on the 16th day of June, 1931, granted forth of the Principal Probate Registry, Saorstát Éireann éireann, to your petitioners, the executors named in the said will. The said John Barry Deane was at the time of his death and at all material times domiciled in Saorstát Éireann éireann.

6. Subsequent to the death of the said John Barry Deane the proceeds of the said policy of assurance, amounting to the sum of £539 15s. 6d., were paid by the Insurance Society to your petitioners.

7. The British Inland Revenue Commissioners claimed estate duty in respect of the said proceeds, and British estate duty, amounting to the sum of £21 11s. 9d., was assessed and paid in respect of same by your petitioners. The effect of the inclusion of the said proceeds as British assets was to bring the British assets over the sum of £5,000, and to raise the rate of British estate duty from 3 per cent. to 4 per cent.

8. Your petitioners originally accounted for the said proceeds by including them in Account Number 2 in the Saorstát Éireann éireann Revenue affidavit as personal property outside Saorstát Éireann éireann but the Saorstát Éireann éireann Revenue Commissioners insisted that the said proceeds should be included in Account Number 1 as personal property situate in Saorstát Éireann éireann and the said affidavit was amended accordingly and estate duty amounting to £21 11s. 9d. has been paid on the said proceeds by your petitioners under protest to the Saorstát Éireann éireann Revenue Commissioners. The Saorstát Éireann éireann Revenue Commissioners refused to make an allowance for British estate duty paid in respect of the said proceeds and confined the allowance in respect of the other British assets to 3 per cent. instead of 4 per cent. The difference between the amount so allowed and the amount of allowance claimed by your petitioners is £68 4s. 0d.

9. Your petitioners submit that the decision of the Saorstát Éireann éireann Revenue Commissioners is erroneous and that they are entitled to the said allowance on the following grounds:—

(a) That the locality of the said assets is determined by the situation of the registered head office of the Insurance Society at the time of the death of the said John Barry Deane, viz., Glasgow, Scotland;

(b) That the proceeds of the said policy of assurance were payable by the Insurance Society at their head office in Glasgow and not in Saorstát Éireann; éireann;

(c) That the said proceeds were properly recoverable in Glasgow and not in Saorstát Éireann; éireann;

(d) That the said proceeds were payable under the terms of the said policy of assurance out of the stock and funds of the Insurance Society in Glasgow;

(e) That the said proceeds were under the terms of the said policy of assurance payable at the date of the death of the said John Barry Deane in sterling (British currency) and not in the currency of Saorstát Éireann éireann.

Your petitioners humbly pray that:

(1) It be declared that the proceeds of the said policy of assurance are not chargeable with estate duty in Saorstát Éireann éireann as assets in Saorstát Éireann éireann of the said John Barry Deane deceased;

(2) It be declared that your petitioners are entitled to repayment of the said sum of £68 4s. 0d., or such other sum as represents the difference between the amount paid by your petitioners to the Saorstát Éireann éireann Revenue Commissioners for estate duty and the amount of such estate duty for which they were legally liable;

(3) The Revenue Commissioners be ordered to pay to your petitioners their costs of and incidental to this petition, the order thereon and proceedings thereunder when taxed and ascertained;

(4) Your petitioners may have such further or other relief in the premises as the Court shall think proper."

The answer of the Revenue Commissioners, dated the 12th December, 1933, was as follows:—

"1. The Revenue Commissioners (hereinafter called the Commissioners) do not admit that it was on the 10th of February, 1910, that the said policy was effected, or the contract of assurance made and concluded. Save as aforesaid they are prepared to accept as correct the statements contained in paragraphs 1, 2, 3, 5, 6, 7 and 8 of the petition, but for greater certainty as to purport and contents of the several documents in the said paragraphs respectively mentioned they refer to the same when produced.

2. As regards paragraph 4 of the petition the Commissioners admit that the Scottish Amicable Life Assurance Society (hereinafter referred to as the 'said Society') was incorporated by the 12 & 13 Vict. c. XXII and that the said Society has its registered office at 35 St. Vincent Street, Glasgow. The Commissioners refer to the statute 12 & 13 Vict. c. XXII, and to the statute, 9 & 10 Geo. 5, c. cx, and to the regulations of the Society, and say that the general directors of the said Society were thereby empowered to appoint local boards and to delegate to them all or any of their powers. The Commissioners do not admit that the premiums payable under the said policy, or the moneys payable thereunder were properly payable or receivable at the said office in Glasgow.

3. As regards paragraph 9 of the petition, the...