(Exchequer Cause.) Inland Revenue v. Paterson's Executors [1909] ScotLR 930 (22 June 1909)

(Exchequer Cause.) Inland Revenue v. Paterson's Executors [1909] ScotLR 930 (22 June 1909)

The codicil executed by Mr Paterson in 1877, and its language regarding the administration and division of the estate, demonstrated that his intention was for all investments, including those with special destinations, to fall under the mutual settlement. This intention rebutted the presumption that special destinations would prevail, and thus Mrs Paterson took only a liferent, not a fee, in the investments. Accordingly, estate duty was not payable on her death as the property had already been subject to duty on Mr Paterson's death.

Citation
[1909] ScotLR 930
Parties
Pursuer: Commissioners of Inland Revenue; Defenders: William Alexander Paterson and others, Executors of Mrs Elizabeth Finlay or Paterson
Jurisdiction
Scotland
Judgment Date
22 June 1909
Procedural Posture
Exchequer Cause (civil) / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
Appeal dismissed; interlocutor of Lord Ordinary adhered to; defenders assoilzied (absolved) with expenses.
Legal Topics
Testamentary Succession, Special Destinations, Estate Duty, Mutual Settlements, Construction of Wills
Succession Revenue Law Testamentary Succession Special Destinations Estate Duty Mutual Settlements Construction of Wills

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Parties

Commissioners of Inland Revenue

Pursuer

William Alexander Paterson and others, Executors of Mrs Elizabeth Finlay or Paterson

Defenders

Procedural Posture

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

Legal Issues

  1. 1 Whether investments with special destinations made by the testator after a mutual settlement fell under the general settlement or passed to the surviving spouse in fee
  2. 2 Whether estate duty was payable on such investments on the death of the surviving spouse

Ratio Decidendi

The codicil executed by Mr Paterson in 1877, and its language regarding the administration and division of the estate, demonstrated that his intention was for all investments, including those with special destinations, to fall under the mutual settlement. This intention rebutted the presumption that special destinations would prevail, and thus Mrs Paterson took only a liferent, not a fee, in the investments. Accordingly, estate duty was not payable on her death as the property had already been subject to duty on Mr Paterson's death.

Court Disposition

Appeal dismissed; interlocutor of Lord Ordinary adhered to; defenders assoilzied (absolved) with expenses.

Orders

  • Defenders assoilzied from the conclusions of the summons
  • Expenses awarded to defenders