Estate duty exemption failed where retained properties were subject to a widow's pre-existing maintenance rights under the will.

The widow's maintenance and residence rights arose under the testator's will, and the 1935 arrangement merely enhanced those rights by allowing certain properties to be retained to produce the agreed monthly amount. Because the retained properties were not taken under a fresh disposition by the adopted son, they did not fall within the exemption under section 24 of the Estate Duty Act. The accountable person could not treat the properties as freely disposable free from the widow's pre-existing rights, and the exemption therefore failed. The properties were instead to be considered under the charging provisions governing property passing on death and cesser of interest.

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Issues: Whether the six properties retained by the widow under the agreement dated 25 November 1935 were exempt from estate duty under section 24 of the Estate Duty Act.

Analysis: The widow's right of residence and maintenance originated in the will of the deceased testator, and the later arrangement only enhanced the maintenance and provided that certain properties would be retained so as to yield the agreed monthly amount. The retained properties were therefore not held under a fresh disposition by the adopted son within the meaning of section 24. On the facts, the accountable person could not transfer or dispose of the properties free from the widow's pre-existing rights, and the statutory exemption did not apply. The properties were instead liable to be considered under the charging provisions relating to property passing on death and cesser of interest.

Conclusion: The six properties were not governed by the exemption under section 24 of the Estate Duty Act and the answer was against the accountable person.

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