Lord Advocate v. Henderson's Trustees [1905] ScotLR 42_720 (15 July 1905)

Lord Advocate v. Henderson's Trustees [1905] ScotLR 42_720 (15 July 1905)

The value of the benefit arising from the cesser of the annuity is to be calculated as the annuity capitalised at the same years' purchase as the property (fourteen years), without deduction for bonds or burdens, unless such encumbrances affect the security of the annuity. This method aligns with the statutory language and the nature of the property and annuity.

Citation
[1905] ScotLR 42_720
Parties
Pursuer: Lord Advocate; Defenders: Henderson's Trustees (William Boyd Anderson and others)
Jurisdiction
Scotland
Judgment Date
15 July 1905
Procedural Posture
Revenue Action (estate Duty Valuation) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, First Division
Outcome
Appeal allowed; Lord Ordinary's interlocutor recalled; value to be calculated at fourteen years' purchase of the annuity.
Legal Topics
Estate Duty, Valuation of Annuity Cesser, Finance Act 1894 S.2(1)(b) and S.7(7), Property Passing on Death
Revenue Law Trusts and Estates Estate Duty Valuation of Annuity Cesser Finance Act 1894 S.2(1)(b) and S.7(7) Property Passing on Death

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Parties

Lord Advocate

Pursuer

Henderson's Trustees (William Boyd Anderson and others)

Defenders

Procedural Posture

Revenue Action (estate Duty Valuation) / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, First Division

Legal Issues

  1. 1 How should the value of the benefit arising from the cesser of an annuity on death be calculated for estate duty under the Finance Act 1894, s.7(7)(b)?
  2. 2 Should the value be calculated by capitalising the annuity at the same years' purchase as the property, or by a proportion of the trust capital?

Ratio Decidendi

The value of the benefit arising from the cesser of the annuity is to be calculated as the annuity capitalised at the same years' purchase as the property (fourteen years), without deduction for bonds or burdens, unless such encumbrances affect the security of the annuity. This method aligns with the statutory language and the nature of the property and annuity.

Court Disposition

Appeal allowed; Lord Ordinary's interlocutor recalled; value to be calculated at fourteen years' purchase of the annuity.

Orders

  • Recall the Lord Ordinary's interlocutor.
  • Find that the value of the benefit arising from the cesser of the annuity is to be calculated at fourteen years' purchase of £750.