Estate duty on life interest property turns on cessation at death and open-market valuation after death.

A deceased's life interest in settled property ceased on death, and the resulting beneficial interest passed to the remainderman, bringing the property within the estate duty charge. Where the life interest extended to the whole income of the property, valuation had to be made on the property's principal value. That principal value was to be assessed by reference to the open-market price immediately after death, and any subsisting subordinate life interest, including the son's interest, had to be taken into account because it depressed market value.

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Issues: Whether the deceased's life interest in settled properties ceased on her death so as to attract estate duty, and how the beneficial interest passing on death was to be valued for assessment purposes.

Analysis: Under the settlement deed, the deceased held only a life interest, with the next life estate going to the son. On the deceased's death, the life interest ceased and the resulting benefit passed to the son, bringing the interest within the charging provision for property passing on death. For valuation, where the interest extended to the whole income of the property, the statutory rule required the principal value of the property to be taken. The principal value had to be estimated on the basis of the price it would fetch in the open market at the time of death, understood as a moment after death, and the subsisting life interest of the son had to be taken into account as depressing market value.

Conclusion: The deceased's beneficial interest was chargeable to estate duty, but the valuation had to be revised by assessing the property's principal value after allowing for the son's life interest.

Ratio Decidendi: Where a deceased held only a life interest extending to the whole income of the property, the cessation of that interest on death attracts estate duty, and the property must be valued at its open-market principal value as at a moment after death, with any subsisting subordinate life interest reflected in the valuation.

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