Inland Revenue v. Dick's Trustees [1907] ScotLR 567 (20 March 1907)

Inland Revenue v. Dick's Trustees [1907] ScotLR 567 (20 March 1907)

The 10% of profits paid to employees under the testator's deed of arrangement is a gift by will, not remuneration, and is therefore a legacy within the meaning of the Legacy Duty Act 1796 and Revenue Act 1845. The payment is made by virtue of the testator's testamentary directions, not a contract of employment, and is subject to legacy duty.

Citation
[1907] ScotLR 567
Parties
Pursuer/respondent: Inland Revenue; Defenders/reclaimers: Dick's Trustees (Sir W. C. Copland, C.E., and others)
Jurisdiction
Scotland
Judgment Date
20 March 1907
Procedural Posture
Exchequer Cause (revenue/legacy Duty) / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
Appeal dismissed; Lord Ordinary's interlocutor adhered to.
Legal Topics
Legacy Duty, Testamentary Gifts, Employee Profit Sharing, Remuneration Vs. Gift, Trustee Powers
Revenue Law Trusts and Estates Legacy Duty Testamentary Gifts Employee Profit Sharing Remuneration Vs. Gift Trustee Powers

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Parties

Inland Revenue

Pursuer/respondent

Dick's Trustees (Sir W. C. Copland, C.E., and others)

Defenders/reclaimers

Procedural Posture

Exchequer Cause (revenue/legacy Duty) / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether the 10% of business profits paid to employees under the testator's deed of arrangement constitutes a legacy subject to legacy duty or remuneration for services.

Ratio Decidendi

The 10% of profits paid to employees under the testator's deed of arrangement is a gift by will, not remuneration, and is therefore a legacy within the meaning of the Legacy Duty Act 1796 and Revenue Act 1845. The payment is made by virtue of the testator's testamentary directions, not a contract of employment, and is subject to legacy duty.

Court Disposition

Appeal dismissed; Lord Ordinary's interlocutor adhered to.

Orders

  • Account of moneys paid or payable under the 10% profit provision to be delivered by the trustees.
  • Trustees found liable for legacy duty on the sums paid to employees.