Vested beneficial interests in policy proceeds did not create a fresh estate duty charge on death

Policies of assurance settled by a deceased person were capable of constituting an "other interest" under section 2(1)(d) of the Finance Act 1894, and the proceeds represented property provided by the settlor. Estate duty was nevertheless not chargeable because the relevant beneficiaries already held vested beneficial interests under the settlements from the date of settlement. The settlor's death and the maturity of the policies merely brought those existing rights into enjoyment; they did not create any new or additional beneficial interest accruing on death.

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Issues: Whether policies of assurance settled by the deceased, and the proceeds payable under them, were an "annuity or other interest" provided by the deceased within section 2(1)(d) of the Finance Act, 1894, and whether any beneficial interest in that property accrued or arose on the death of the deceased so as to attract estate duty.

Analysis: The House held that a policy of assurance is capable of being an "other interest" within section 2(1)(d), and that the settlor, by settling the policies, also provided the moneys and investments representing their proceeds. However, estate duty under the provision depends further on whether a new beneficial interest accrues or arises on death. On a proper construction of the settlements, the relevant life tenants already had vested beneficial interests under the trusts from the date of settlement, even though enjoyment of the policy moneys was postponed until the policies matured or the settlor died. The death merely brought the existing rights into fruition and did not create a new or additional beneficial interest.

Conclusion: No estate duty was chargeable under section 2(1)(d), because no beneficial interest accrued or arose on the deaths of the settlers.

Ratio Decidendi: Where a settlement gives a beneficiary an existing vested beneficial right in policy property, the mere maturity of the policy on the settlor's death does not create a fresh beneficial interest for estate duty purposes under section 2(1)(d) of the Finance Act, 1894.

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