Partnership goodwill remains part of a deceased partner's estate unless the deed clearly excludes that right.

Goodwill is an asset of a partnership, and a deed providing for continuation of the firm after a partner's death does not, by itself, extinguish the deceased partner's proprietary interest in that goodwill. Unless the partnership deed expressly or by necessary implication excludes the deceased partner or the legal representative from goodwill, the representative remains entitled to the deceased partner's share in the firm's assets, including goodwill. On that basis, the deceased partner's share in goodwill was included in the principal value of the estate and attracted estate duty.

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Issues: Whether the deceased partner's share in the goodwill of the firm formed part of the principal value of the estate chargeable to estate duty where the partnership deed provided for continuance of the firm after death but contained no express clause excluding the deceased partner or his legal representative from the goodwill.

Analysis: Goodwill is an asset of the partnership under the Partnership Act. The rule governing its treatment on dissolution does not mean that goodwill can be taken into account only on a general dissolution of the firm. Where a partnership deed provides for continuance of the business after death, the legal representative of the deceased partner is still entitled to the deceased partner's share in the firm's assets, including goodwill, unless there is an express or clearly implied stipulation extinguishing that right. In the absence of any clause denying such entitlement, the continuation of the firm does not destroy the deceased partner's proprietary interest in goodwill.

Conclusion: The deceased partner's share in the goodwill was rightly included in the principal value of the estate and was liable to estate duty; the answer was against the accountable person.

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