Estate duty charge cannot arise on trust property transferred before death; exemption provisions cannot create a tax charge.

Property transferred by a deceased person to a public charitable trust more than six months before death was treated as outside the estate duty charging scheme, because it was not deemed by law to pass on death under the relevant charging provisions. The distinction between property not exigible to duty at all and property that is exigible but exempt was material: section 22, being an exemption provision, could not be used to create a charge where none arose under the charging sections. The deceased was also only a trustee and not a beneficiary, so the provision dealing with cessation of interest was inapplicable.

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Issues: Whether property transferred by the deceased to a public charitable trust more than six months before death was exigible to estate duty, and whether section 22 of the estate duty law could be invoked to bring such property to charge.

Analysis: The property did not fall within the charging scheme because it had been transferred to a public charitable trust more than six months prior to the death of the deceased and was therefore not deemed by law to pass on death under the relevant charging provisions. The distinction between property that is not exigible to duty at all and property that is exigible but exempt was treated as material. On that footing, section 22, being an exemption provision, could not be used to create charge where none existed under the charging sections. The deceased was also only a trustee and not a beneficiary, so the provision dealing with cessor of interest was held inapplicable.

Conclusion: The property was not liable to estate duty and section 22 could not be invoked to fasten duty; the issue was decided in favour of the assessee.

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