Inland Revenue v. Scott's Trustees [1918] ScotLR 654 (18 June 1918)

Inland Revenue v. Scott's Trustees [1918] ScotLR 654 (18 June 1918)

The proceeds of the life insurance policies and the portion of the trust estate previously used to pay premiums both constitute interests provided by the deceased, arising on his death, and are property passing on death within the meaning of the Finance Act 1894 s.2(1)(d), and are therefore subject to estate duty.

Citation
[1918] ScotLR 654
Parties
Pursuer: Commissioners of Inland Revenue; Defenders: Alexander Scott and others, Trustees of Alexander Whitson Scott
Jurisdiction
Scotland
Judgment Date
18 June 1918
Procedural Posture
Exchequer Cause (civil, Revenue) / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
Appeal dismissed; Lord Ordinary's judgment affirmed.
Legal Topics
Estate Duty, Property Passing on Death, Life Insurance Policies in Trust, Finance Act 1894 S.1, S.2(1)(d)
Revenue Law Trusts and Estates Estate Duty Property Passing on Death Life Insurance Policies in Trust Finance Act 1894 S.1, S.2(1)(d)

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Parties

Commissioners of Inland Revenue

Pursuer

Alexander Scott and others, Trustees of Alexander Whitson Scott

Defenders

Procedural Posture

Exchequer Cause (civil, Revenue) / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether proceeds of life insurance policies assigned to trustees by inter vivos deed are 'interests provided by the deceased' passing on death under Finance Act 1894 s.2(1)(d) and subject to estate duty.
  2. 2 Whether the portion of the trust estate previously used to pay premiums, which becomes available to beneficiaries on death, is also an 'interest provided by the deceased' and dutiable.

Ratio Decidendi

The proceeds of the life insurance policies and the portion of the trust estate previously used to pay premiums both constitute interests provided by the deceased, arising on his death, and are property passing on death within the meaning of the Finance Act 1894 s.2(1)(d), and are therefore subject to estate duty.

Court Disposition

Appeal dismissed; Lord Ordinary's judgment affirmed.

Orders

  • Defenders to deliver full and true account of all sums recovered as trustees on the death of Alexander Whitson Scott under the insurance policies, including all profits, bonuses, and additions.
  • Defenders to deliver account of the portion of the trust estate required to produce annual income equal to the premiums payable on the policies.