Separate life insurance policy proceeds are treated as distinct estates for estate duty, with no inter se aggregation.

Amounts payable under separate life insurance policies taken under the Married Women's Property Act, where the deceased had no interest in the policies, are treated as separate estates for estate duty purposes. Section 34(3) of the Estate Duty Act, 1953 provides that property in which the deceased never had an interest is not to be aggregated with other property and must be assessed as an estate by itself at the rate applicable to its principal value. On that construction, there is no basis for combining multiple such policy amounts merely because they are payable to the same beneficiary. The interpretation is also said to accord with the rule that, where two constructions are possible, the one favourable to the accountable person should prevail.

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Issues: Whether amounts payable under separate life insurance policies taken under the Married Women's Property Act, where the deceased had no interest in the policies, are liable to be aggregated inter se for estate duty purposes or must be treated as separate estates.

Analysis: Section 34(3) of the Estate Duty Act, 1953 provides that property in which the deceased never had an interest shall not be aggregated with any property and shall be treated as an estate by itself, with duty levied at the rate applicable to its principal value. On that language, each policy amount falling within the provision is to be treated separately. The provision contains no basis for combining multiple such separate estates merely because they are payable to the same beneficiary. The interpretation adopted is also consistent with the view that, where two constructions are possible, the one favourable to the accountable person should prevail.

Conclusion: The amounts payable under each insurance policy were required to be treated as separate estates without inter se aggregation, and the departmental appeal failed.

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